<p>My numbers were just made up, no implicit meaning. Borrowing from notrichenough, top 17% pay 37% of all income tax, I figure top 1% paying 5% of all income tax may reasonable.</p>
<p>Got those numbers wrong, Igloo.</p>
<p>The top 1% pay 37% of all income tax (and earn 17% of the income). Which is why dstark said they’d be thrilled to only pay 5%.</p>
<p>The top 0.1% pay 17% of all income tax.</p>
<p>I think you misinterpreted my numbers. </p>
<p>The top 1% of earners are already paying 37% of all income tax.</p>
<p>The top 5% of earners are paying almost 60% of all income tax.</p>
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What is your secret?</p>
<p>Anyway, what I was wondering was how wealth distribution recharacterizes our society. We may be able to agree more if we understand it.</p>
<p>My father made over 150K last year and paid zero in federal income tax. No social security or medicare taxes either. Secret is everything he earned was either tax free interest, capital gains or qualified dividends. His grandson earned $30K last year and paid much, much more. I think the system is terrible.</p>
<p>This is a pointless discussion. It is not about fairness it is about power and the power has been again handed to those who will decide those who are successful in this society should pay society to the point where their perceived and experienced “success” is negligible. That is the question really and it is the one no one wants to confront.</p>
<p>How is it possible to really predict? Isn’t there a lot hanging on what they do with the AMT patch, the Bush tax cuts, etc? I think it all makes around $4000 difference to me depending upon what they do.</p>
<p>I just read an article on the mortgage deduction being on the Fiscal Cliff table with both side showing interest. The Real Estate lobby is heavily against it though. The article stated that a lot of other countries have phased it out.</p>
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<p>It’s all uncertain along with Greece, China, the Middle-East and probably a few other things. I focus on the things that I can control - making more money and keeping expenses down. I can’t do anything about the tax policy stuff.</p>
<p>Notrichenough, post #65. </p>
<p>My income is more important to society than yours. ;)</p>
<p>I agree with post #65. The tax system is terrible.</p>
<p>I think we’ll weather it like we have weathered most everything since we started figuring out how to prosper in this society. I’m just not really sure I want to remain in it and my older kid is also wondering. I figure my forebears left an old, lousy government and they were vigorous and wanted to be self reliant. If my society here is no longer that then maybe it really is time to move along somewhere else? Would CC permit a thread on that?</p>
<p>^ Just want to add that it isn’t so much me rejecting America but a sense that America dislikes me.</p>
<p>Igloo, you can google concentrated wealth and see the problems that are caused. Look at policies and think if these are the policies the majority wants.</p>
<p>“You can have wealth concentrated in the hands of a few, or democracy, but you cannot have both.” *** - Louis Brandeis"</p>
<p>[Mortgage</a> Interest Deduction, Once a Sacred Cow, Is Under Scrutiny - NYTimes.com](<a href=“Mortgage Interest Deduction, Once a Sacred Cow, Is Under Scrutiny - The New York Times”>Mortgage Interest Deduction, Once a Sacred Cow, Is Under Scrutiny - The New York Times)</p>
<p>So, if the mortgage deduction is a target, and decreasing the deduction hits the upper middle class not the wealthy, does this mean owners of rental homes can not deduct mortgage interest either?</p>
<p>Politically, the mortgage deduction is another third rail. I just don’t think they’ll touch it in any signficant way. It hurts people more in high housing cost states. It would hurt the limping housing market. Just today, talked to a couple who are waiting to buy a house until they see what happens with the mortgage deduction.</p>
<p>I don’t think that it’s as off the table as it used to be. Personally I’d be fine if it were gone - it distorts the value of housing and artificially increases costs to younger families looking to get a home. That’s a big problem in my state where young families are leaving because of high housing prices.</p>
<p>It’s something that’s been phased out in other countries too.</p>
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<p>Rental home interest would be a business expense just as interest on buying a computer or automobile would be. I have heard of considerations to get rid of mortgage deductions on second homes on the table but nothing on rental properties.</p>
<p>“So, if the mortgage deduction is a target, and decreasing the deduction hits the upper middle class not the wealthy, does this mean owners of rental homes can not deduct mortgage interest either?”</p>
<p>It is my understanding that if you have income over 150K, owners of rental homes can’t deduct any losses whatsoever, no mortgage interest, expenses, depreciation, anything. The only time you get the benefit is to keep track of it, and when you sell the home, you can deduct it from the profit. I would love to be wrong about this.</p>
<p>That is correct</p>
<p>That stinks. I have four rental condos. I was hoping to be wrong.</p>
<p>Schedule E…for incomes above $150,000… Aren’t you allowed to deduct mortgage interest and other expenses as long as rental income equal or exceeds expenses?</p>
<p>If your AGI is over $150k, any net rental losses are suspended, and carry forward to offset future income from passive activities. In the year of sale (technically, in the year the entire activity is disposed of in a fully-taxable transaction, but for most people, that means in the year of sale), all the losses free up. Should your AGI dip below $150k, up to $25k of losses are available in most circumstances.</p>