Tax

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The fifth reform is taxes. First, set dividend tax rates equal to ordinary income tax rates. Reform the individual alternative minimum tax or AMT by either outright elimination plus the inclusion of some elements of the AMT in the regular tax code or by indexing the exemption for inflation. Second, create tax equity by eliminating state and local tax deductions; eliminating the mortgage interest deduction on owner-occupied homes; eliminating the standard deduction and personal, senior and blind exemptions; reducing tax rates; strengthening charitable giving by allowing a deduction exceeding 1% of adjusted gross income; allowing a cumulative, lifetime capital gains exclusion on the primary residence; allowing an above-the-line deduction of investment interest expense; better integrating corporate and individual income taxes so that dividends are only taxed once; increasing or eliminating the carryforward and carryback limitations; reforming the corporate AMT; eliminating most deductions and credits; taxing futures and other financial instruments as short-term capital gains regardless of the holding period; collecting taxes owed by pursuing unreported income from offshore tax havens and complex business and partnership returns; coordinating a national tax amnesty; stopping improper payments for the EITC and child tax credit or the SIF; ending the estate tax and modifying the gift tax; periodically taxing unrealized capital gains at the long-term capital gains rate exempting the first $500,000 per person of capital gains. Finally, provide tax simplification by setting the long-term capital gains tax rates equal to ordinary income tax rates.

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