More Welfare for the Rich
Working on income tax reminds one of all the welfare that the US government gives to the rich. The biggest is probably the home mortgage deduction. It’s nice for average people, but the average person probably gets only a few thousand dollars. On a mortgage in the $300,000 to $350,000 range, not too cheap, interest will be about $1,000 per month, or about $12,000 per year. On a $1 million mortgage, monthly interest is about $3,300 per month or about $40,000 per year. In addition the smaller homeowner will probably be paying taxes in something like the 20% range, which means that his deduction will be about $2,600. The richer homeowner will probably be paying taxes at a higher rate, say 35%, so that his deduction will be around $13,800. So, the government gives the richer person $11,000 more for living in his house than it gives the poorer person. And of course, renters, who tend to be poorer than homeowners get no help from the government to keep a roof over their heads.
Another less obvious giveaway to rich people is the lower tax rate for capital gains and qualified dividends. In this case the government basically rewards people for playing the stock market. Arguably, the provisions discourage just playing the stock market like gambling in Las Vegas, because they make you hold stock for at least a year. But if you do hold the stock for a year, the savings are enormous, cutting your taxes in half on stock market income, whether for trading stock or just collecting dividends. The richer you are, the more the government gives you. The government gives people like Mitt Romney millions and millions of dollars just because they are rich. No wonder Mitt Romney despises poor people who get hundreds of dollars a month from the government, when he gets millions. If poor people had any ambition, they would soak the government for millions, like he does. Like most rich people, Mitt hates paying soldiers in Afghanistan or widows on Social Security.