Income taxes to Encourage Investment

Primary Principle – Taxes should be used primarily to fund government operations and not for economic incentives. Too often breaks have unintended consequences and fail to stimulate the economy.

Personal Income Tax

Eliminate AMT and all tax snack bars. Tax credits with regard to example those for race horses benefit the few in the expense of the many.

Eliminate deductions of charitable contributions. So here is one tax payer subsidize another’s favorite charity?

Reduce a child deduction in order to some max of three the children. The country is full, encouraging large families is pass.

Keep the deduction of home mortgage interest. Buying a home strengthens and adds resilience to the economy. In case the mortgage deduction is eliminated, as the President’s council suggests, the world will see another round of foreclosures and interrupt the recovery of layout industry.

Allow deductions for educational costs and interest on figuratively speaking. It is effective for federal government to encourage education.

Allow 100% deduction of medical costs and health insurance. In business one deducts the price producing materials. The cost of labor is simply the upkeep of ones health.

Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 1980s earnings tax code was investment oriented. Today it is consumption driven. 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 All investment in stocks and bonds always be deductable and only taxed when money is withdrawn from the investment advertises. The stock and bond markets have no equivalent to the real estate’s 1031 trading. The 1031 industry exemption adds stability on the real estate market allowing accumulated equity to be used for further investment.

(Notes)

GDP and Taxes. Taxes can be levied as the percentage of GDP. Quicker GDP grows the more government’s ability to tax. More efficient stagnate economy and the exporting of jobs along with the massive increase in difficulty there does not way the usa will survive economically with no massive take up tax proceeds. The only way you can to increase taxes would be to encourage a tremendous increase in GDP.

Encouraging Domestic Investment. Through the 1950-60s taxes rates approached 90% for top income earners. The tax code literally forced financial security 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 growing GDP while providing jobs for the growing middle class. As jobs were came up with tax revenue from the guts class far offset the deductions by high income earners.

Today via a tunnel the freed online income Tax filing in india from the upper income earner has left the country for investments in China and the EU in the expense for the US economy. Consumption tax polices beginning regarding 1980s produced a massive increase planet demand for brand name items. Unfortunately those high luxury goods were frequently manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector of the US and reducing the tax base at an occasion when debt and a maturing population requires greater tax revenues.

The changes above significantly simplify personal income tax. Except for making up investment profits which are taxed from a capital gains rate which reduces annually based with a length of energy capital is invested the amount of forms can be reduced to a couple of pages.