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 attributes. Tax credits pertaining to instance 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 be able to max of three children. 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. If the mortgage deduction is eliminated, as the President’s council suggests, the will see another round of foreclosures and interrupt the recovery of the construction industry.
Allow deductions for educational costs and interest on student education loans. It is advantageous for federal government to encourage education.
Allow 100% deduction of medical costs and insurance policy. In business one deducts the price producing materials. The cost on the job is simply the maintenance of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior on the 1980s earnings tax code was investment oriented. Today it is consumption concentrated. A consumption oriented economy degrades domestic economic health while subsidizing US trading young 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 All investment in stocks and bonds in order to be deductable only taxed when money is withdrawn from the investment advertises. The stock and bond markets have no equivalent towards the real estate’s 1031 give eachother. The 1031 industry exemption adds stability to the real estate market allowing accumulated equity to be utilized for further investment.
(Notes)
GDP and Taxes. Taxes can only be levied being a percentage of GDP. Quicker GDP grows the greater the government’s capability to tax. Because of stagnate economy and the exporting of jobs coupled with the massive increase with debt there is limited way the us will survive economically any massive take up tax earnings. The only possible way to increase taxes is encourage a tremendous increase in GDP.
Encouraging Domestic Investment. Within 1950-60s tax rates approached 90% for top income earners. The tax code literally forced comfortable 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 accelerating GDP while providing jobs for the growing middle class. As jobs were created the tax revenue from the very center class far offset the deductions by high income earners.
Today via a tunnel the freed income contrary to the upper income earner has left the country for investments in China and the EU at the expense for the US economic state. Consumption tax polices beginning regarding 1980s produced a massive increase in the demand for brand name items. Unfortunately those high luxury goods were constantly manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector of the US and reducing the efilie tax return India base at a period when debt and an aging 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 on the capital gains rate which reduces annually based using a length of capital is invested variety of forms can be reduced using a couple of pages.
