Income taxes to Encourage Investment
Primary Principle – Taxes should be used primarily to fund government operations and not for economic incentives. Too often tax credits have unintended consequences and fail to stimulate the economy.
Personal Income Tax
Eliminate AMT and all tax credits. Tax credits because those for race horses benefit the few in the expense on the many.
Eliminate deductions of charitable contributions. So here is one tax payer subsidize another’s favorite charity?
Reduce the youngster deduction to be able to max of three the children. The country is full, encouraging large families is carry.
Keep the deduction of home mortgage interest. Owning a home strengthens and adds resilience to the economy. If the mortgage deduction is eliminated, as the President’s council suggests, the country will see another round of foreclosures and interrupt the recovery of market industry.
Allow deductions for education costs and interest on so to speak .. It is effective for brand new to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the price producing goods. The cost of employment is partially the repair of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior on the 1980s the income tax code was investment oriented. Today it is consumption driven. A consumption oriented economy degrades domestic economic health while subsidizing US trading collaborators. The stagnating economy and the ballooning trade deficit are symptoms of consumption tax policies.
Eliminate 401K and IRA programs. All investment in stocks and bonds in order to be deductable only taxed when money is withdrawn over investment areas. The stock and bond markets have no equivalent into the real estate’s 1031 flow. The 1031 industry exemption adds stability into the real estate market allowing accumulated equity to use for further investment.
(Notes)
GDP and Taxes. Taxes can essentially levied being a percentage of GDP. Quicker GDP grows the more government’s chance to tax. Given the stagnate economy and the exporting of jobs coupled with the massive increase in the red there isn’t really way us states will survive economically without a massive increase in tax revenues. The only way you can to increase taxes end up being encourage a massive increase in GDP.
Encouraging Domestic Investment. Within 1950-60s income tax rates approached 90% to your advantage income earners. The tax code literally forced great living earners to “Invest in America”. Such policies of deductions for pre paid interest, funding limited partnerships and other investments against earned income had the twin impact of skyrocketing GDP while providing jobs for the growing middle-class. As jobs were developed the tax revenue from the very center class far offset the deductions by high income earners.
Today much of the freed income around the upper income earner leaves the country for investments in China and the EU in the expense for the US method. Consumption tax polices beginning inside the 1980s produced a massive increase inside of the demand for brand name items. Unfortunately those high luxury goods were excessively manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector Online GST Pune Maharashtra among the US and reducing the tax base at a time full when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income tax. Except for accounting for investment profits which are taxed at capital gains rate which reduces annually based upon the length of time capital is invested amount of forms can be reduced together with a couple of pages.
