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 attributes. Tax credits with regard to example those for race horses benefit the few at the expense on the many.

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

Reduce a kid deduction to a max of three of their own kids. The country is full, encouraging large families is successfully pass.

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

Allow deductions for expenses and interest on student loan. It pays to for federal government to encourage education.

Allow 100% deduction of medical costs and insurance coverage. In business one deducts the price producing everything. The cost of employment is simply the repair off ones health.

Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments online gst registration in pune maharashtra America”. Prior into the 1980s earnings tax code was investment oriented. Today it is consumption oriented. 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 All investment in stocks and bonds always be deductable and only taxed when money is withdrawn out from the investment market. The stock and bond markets have no equivalent to the real estate’s 1031 give eachother. The 1031 property exemption adds stability on the real estate market allowing accumulated equity to use for further investment.

(Notes)

GDP and Taxes. Taxes can be levied as the percentage of GDP. The faster GDP grows the more government’s option to tax. Because of stagnate economy and the exporting of jobs coupled with the massive increase in debt there is very little way the us will survive economically without a massive take up tax gains. The only way you can to increase taxes would be to encourage a massive increase in GDP.

Encouraging Domestic Investment. Within 1950-60s tax rates approached 90% to your advantage income earners. The tax code literally forced high income earners to “Invest in America”. Such policies of deductions for pre paid interest, funding limited partnerships and other investments against earned income had the dual impact of skyrocketing GDP while providing jobs for the growing middle-class. As jobs were come up with the tax revenue from the guts class far offset the deductions by high income earners.

Today almost all of the freed income around the upper income earner has left the country for investments in China and the EU at the expense of this US current economic crisis. Consumption tax polices beginning inside the 1980s produced a massive increase a 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 among the US and reducing the tax base at a time full when debt and an ageing population requires greater tax revenues.

The changes above significantly simplify personal income place a burden on. Except for accounting for investment profits which are taxed at capital gains rate which reduces annually based with a length of capital is invested amount of forms can be reduced along with couple of pages.