Primary Principle - Taxes should be used primarily to fund government operations and GST Application Mumbai Maharashtra not for economic incentives. Too often breaks 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 for this many.
Eliminate deductions of charitable contributions. Is included in a one tax payer subsidize another's favorite charity?
Reduce the child deduction the 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 a home 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 layout industry.
Allow deductions for educational costs and interest on student loan. It pays to for brand new to encourage education.
Allow 100% deduction of medical costs and insurance plan. 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 All investment in stocks and bonds always be deductable and only taxed when money is withdrawn using the investment markets. The stock and bond markets have no equivalent towards the real estate's 1031 flow. The 1031 real estate exemption adds stability into the real estate market allowing accumulated equity to be taken for further investment.
GDP and Taxes. Taxes can only be levied as the percentage of GDP. Quicker GDP grows the greater the government's ability to tax. Within the stagnate economy and the exporting of jobs along with the massive increase in difficulty there is limited way the usa will survive economically with no massive trend of tax earnings. The only way you can to increase taxes would be to encourage huge increase in GDP.
Encouraging Domestic Investment. Within 1950-60s income tax rates approached 90% for top level 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 growing GDP while providing jobs for the growing middle class. As jobs were came up with tax revenue from the center class far offset the deductions by high income earners.
Today almost all of the freed income out of your upper income earner has left the country for investments in China and the EU at the expense for the US current economic crisis. Consumption tax polices beginning globe 1980s produced a massive increase a 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 period of time when debt and an ageing population requires greater tax revenues.
The changes above significantly simplify personal income duty. Except for comprising investment profits which are taxed on the capital gains rate which reduces annually based upon the length associated with your capital is invested the number of forms can be reduced using a couple of pages.