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 loans. Tax credits with regard to example those for race horses benefit the few at the expense of the many.
Eliminate deductions of charitable contributions. Need to one tax payer subsidize another's favorite charity?
Reduce a child deduction to a max of three the children. The country is full, encouraging large families is carry.
Keep the deduction of home mortgage interest. Buying a home strengthens and adds resilience to the economy. In the event the mortgage deduction is eliminated, as the President's council suggests, the uk will see another round of foreclosures and interrupt the recovery of market industry.
Allow deductions for education costs and interest on student education loans. It pays to for the government to encourage education.
Allow 100% deduction of medical costs and insurance coverage. In business one deducts the price producing wares. The cost of employment is simply the repair of ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for "investments in America". Prior into the 1980s earnings Online Tax Return Filing India 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 All investment in stocks and bonds in order to deductable in support taxed when money is withdrawn out from the investment niches. The stock and bond markets have no equivalent towards the real estate's 1031 pass on. The 1031 industry exemption adds stability for the real estate market allowing accumulated equity to be utilized for further investment.
GDP and Taxes. Taxes can simply be levied as a percentage of GDP. The faster GDP grows the greater the government's ability to tax. Because of stagnate economy and the exporting of jobs along with the massive increase in the red there does not way the usa will survive economically your massive take up tax proceeds. The only possible way to increase taxes would be to encourage a massive increase in GDP.
Encouraging Domestic Investment. During 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 developed the tax revenue from the middle class far offset the deductions by high income earners.
Today much of the freed income around the upper income earner leaves the country for investments in China and the EU at the expense of the US economy. Consumption tax polices beginning regarding 1980s produced a massive increase inside of 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 among the US and reducing the tax base at a period when debt and an ageing population requires greater tax revenues.
The changes above significantly simplify personal income place a burden on. Except for making up investment profits which are taxed from a capital gains rate which reduces annually based on the length of your capital is invested amount of forms can be reduced to a couple of pages.