Taxation’s 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 attributes. Tax credits with regard to example those for race horses benefit the few at the expense for this many.

Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?

Reduce the youngster deduction together with a max of three younger children. The country is full, encouraging large families is overlook.

Keep the deduction of home mortgage interest. Owning 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 structure industry.

Allow deductions for education costs and interest on figuratively speaking. It pays to for brand new to encourage education.

Allow 100% deduction of medical costs and insurance plan. In business one deducts the cost of producing solutions. The cost of employment is partially the repair of ones health.

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 All investment in stocks and bonds ought to deductable just taxed when money is withdrawn among the investment markets.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

(Notes)

GDP and Taxes. Taxes can simply be levied as a percentage of GDP. Quicker GDP grows the more government’s ability to tax. Within the stagnate economy and the exporting of jobs coupled with the massive increase owing money there is no way us states will survive economically with massive trend of tax revenues. The only possible way to increase taxes would be to encourage huge increase in GDP.

Encouraging Domestic Investment. Through the 1950-60s taxes rates approached 90% to find 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 twin impact of accelerating GDP while providing jobs for the growing middle class. As jobs were come up with tax revenue from the center class far offset the deductions by high income earners.

Today via a tunnel the freed income from the upper income earner leaves the country for investments in China and the EU at the expense among the US method. Consumption tax polices beginning inside the 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 tax return online blighting the manufacturing sector of the US and reducing the tax base at a time full when debt and an aging 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 in a very capital gains rate which reduces annually based around the length of energy capital is invested variety of forms can be reduced any couple of pages.