Income tax 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 snack bars. Tax credits because those for race horses benefit the few in the expense on the many.
Eliminate deductions of charitable contributions. Is included in a one efile Tax Return India payer subsidize another’s favorite charity?
Reduce the child deduction in order to some max of three 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. In the event the mortgage deduction is eliminated, as the President’s council suggests, a rural area will see another round of foreclosures and interrupt the recovery of layout industry.
Allow deductions for expenses and interest on so to speak .. It is advantageous for the government to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the cost of producing goods. The cost of training is mainly the maintenance of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior to the 1980s the income tax code was investment oriented. Today it is consumption concentrated. A consumption oriented economy degrades domestic economic health while subsidizing US trading partners. 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 All investment in stocks and bonds in order to deductable in support taxed when money is withdrawn out from the investment advertises. The stock and bond markets have no equivalent towards the real estate’s 1031 pass on. The 1031 industry exemption adds stability to your real estate market allowing accumulated equity to use for further investment.
GDP and Taxes. Taxes can fundamentally be levied as a percentage of GDP. Quicker GDP grows the greater the government’s chance to tax. Within the stagnate economy and the exporting of jobs coupled with the massive increase in debt there is limited way us states will survive economically with no massive craze of tax earnings. The only way you can to increase taxes would be to encourage huge increase in GDP.
Encouraging Domestic Investment. Through the 1950-60s income tax rates approached 90% to your advantage income earners. The tax code literally forced huge salary 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 come up with the tax revenue from the very center class far offset the deductions by high income earners.
Today via a tunnel the freed income off the upper income earner has left 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 more often than not manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector belonging to the US and reducing the tax base at a time when debt and a maturing population requires greater tax revenues.
The changes above significantly simplify personal income tax bill. Except for accounting for investment profits which are taxed on the capital gains rate which reduces annually based with a length of energy capital is invested the number of forms can be reduced using a couple of pages.