Another priceless letter to the editor

[brimic]

People complain about tax cuts "for the rich", when we have one of the most progressive tax codes in the world (the bush tax cuts actually made it MORE progressive, not less), and the mortgage deduction is the least progressive of ALL of the deductions, as there is no phase-out--so someone in the highest tax bracket, spending the most on mortgage interest not only can deduct more, but is reducing their taxes at the high marginal rate, instead of the lower.

To add to the problem, the Left has been very successful in redefining the parameters of 'rich' and 'poor.'
They even came up with n ew categories such as the 'working poor' to gain sympathy from the masses.
As far as I can tell, the Left defines the 'middle class' as households with median income or less, and the 'rich' as those who are above median.

 

[wmenorr67]

According to how they want to tax people a single person making over $200K and a couple at $250K are rich.

[brimic]

According to how they want to tax people a single person making over $200K and a couple at $250K are rich.

Right now.
That 'idea' won't be indexed for inflation- can you say 'bracket creep?'
Once they find out that they cannot feed the leaches by bleeding the <$200K earners dry, the nex level of rich will be those who make $150K, and then so on down the line. There simply isn't enough money in the universe to pay for Obama's spending spree.

I don't consider a person who earns $200K as 'rich'- they are trading skills or brainpower for money. I consider those that live off a trust fund and never actually earn a dollar by the sweat of their brow as 'rich' or 'wealthy' but it still doesn't bother me if they aren't taxed punitively.

[Monkeyleg]

Except, because the cost of living in WI is higher than in AL, the buyer of the identical house that is $150K also has a higher income, but the same standard of living as the gentleman in AL with a lower income.

I make the same income that I did when I was in WI. Other people do, too.

[makattak]

I make the same income that I did when I was in WI. Other people do, too.

Then you have a higher standard of living, in comparison to that income in WI.

[Tallpine]

Then you have a higher standard of living, in comparison to that income in WI.

You should be taxed more, then 

 

[HankB]

Two guys with the same incomes and the same home, but one lives in AL and the other in WI. The house belonging to the guy in Alabama cost him $100,000 after his $20,000 down payment, and he owes $100,000. He pays $500 a year in property taxes.

The guy in Wisconsin paid $150,000 for the same house after his $30,000 down payment, and he still owes the $150,000. He pays $4000 a year in property taxes.

Both have mortgages at 5%. The guy in Wisconsin will be able to deduct 50% more in interest over the course of his 30 year loan, because his mortgage is 50% larger. He'll also be able to deduct $4000 in property taxes. The guy in Alabama will only be able to write off two-thirds as much in interest over the course of the 30 year loan, and he'll only be able to deduct $600 a year in taxes.

Everything else being equal, the guy in Alabama is paying more to bring in the necessary tax revenues than is the guy in Wisconsin.

Over 30 years, Wisconsin guy is paying around $140,000 in interest and $120,000 in taxes. Assuming he's in the 28% tax bracket, his "out of pocket" cost for interest & property tax is ~ $187,000 over 30 years.

Alabama guy will pay about $93,000 in interest and $15,000 in property taxes, a total of ~$108,000. Assuming he's in the same 28% bracket, he's "out of pocket" only $78,000, a net savings of $109,000 over Wisconsin guy. If he invests these savings – plus the lower down payment – for 30 years, he’ll end up WAY ahead of Wisconsin guy.
It’s Wisconsin guy who should be jealous.

As for only being able to write off less interest . . . well, boo hoo, Alabama guy is PAYING a lot less. Complaints like this remind me of the people who were already off the tax rolls complaining that the Bush tax cuts “. . . didn’t help them.”

[birdman]

Right now.
That 'idea' won't be indexed for inflation- can you say 'bracket creep?'
Once they find out that they cannot feed the leaches by bleeding the <$200K earners dry, the nex level of rich will be those who make $150K, and then so on down the line. There simply isn't enough money in the universe to pay for Obama's spending spree.

I don't consider a person who earns $200K as 'rich'- they are trading skills or brainpower for money. I consider those that live off a trust fund and never actually earn a dollar by the sweat of their brow as 'rich' or 'wealthy' but it still doesn't bother me if they aren't taxed punitively.

And there is one of the things that pisses me off, you hit the nail on the head...INCOME is not WEALTH.  Income can fluctuate, wealth (hopefully) builds.  One thing many people forget when attacking the (liberal definition) of "rich" whether through income or capital gains, is they too may be subject to them...sell a house? Cash out investments and retire?  Get a big bonus or signing bonus at work?  All these things cause income and taxes to fluctuate wildly.  One thing that Thomas sowell points out repeatedly, that few seem to remember, regards the supposed growing gap between rich and poor.  What he points out (correctly) is comparing different income deciles over time is a flawed measure of prosperity growth, as it doesn't track the actual people.  In general, those in the highest income brackets rarely stay there as those brackets are to a large fraction dominated by individuals who have transient earnings (investment or company sales, property sales, etc).  Additionally, those charts don't reflect the impact of age.  To a large majority, the lower brackets are populated by younger people, and the higher brackets by older people (duh, you may say, you earn more as you get more experience), so the average and median age increases as the brackets increase--but the normal bracket vs time comparison never reflects this.  One of the reasons why the upper-middle class (28-33%) brackets have grown so much is our population is growing older (boomers)--which distorts the normal demographics of the lower brackets.

Anyway, just a rant about income vs wealth with a digression.

[Monkeyleg]

As for only being able to write off less interest . . . well, boo hoo, Alabama guy is PAYING a lot less. Complaints like this remind me of the people who were already off the tax rolls complaining that the Bush tax cuts “. . . didn’t help them.”

I'm trying to point out the absurdity of our tax laws. They don't have deductions for "standard of living" or "quality of life" or "bubba".

Two guys in WI with the same incomes. One chooses a $100,000 house. The other guy chooses a $300,000 house. In WI, one pays about $2500 a year in property taxes, and $115,838 in interest. The guy with the $300,000 house pays $7500 a year in property taxes and $347,515 in interest.

So, the guy who spends more pays less in taxes, and the guy who spends less makes up for it.

Make sense to you? It only does if the government is encouraging people to buy as much house as possible.

[sanglant]

Dick, you got it. congratulations. that's what really got us here. remember frank bush etc. pushing to "fair" housing. powered by loans the buyers could never pay back. that was/is the biggest straw.