Rand Paul Tax Plan

[*michaelsean*]

Looks like about 58% or so of the people making $50,000-$100,000 itemize. They aren't doing that without the mortgage interest deduction.

http://www.freeby50.com/2012/12/what-percent-of-tax-filers-itemize.html

[Belsnickel]

(06-22-2015, 01:21 PM)michaelsean Wrote: Looks like about 58% or so of the people making $50,000-$100,000 itemize.  They aren't doing that without the mortgage interest deduction.

http://www.freeby50.com/2012/12/what-percent-of-tax-filers-itemize.html

While not the majority situation, I know, there are those in that range itemizing without mortgage interest. My parents being among them.

[*michaelsean*]

(06-22-2015, 01:59 PM)Belsnickel Wrote: While not the majority situation, I know, there are those in that range itemizing without mortgage interest. My parents being among them.

Yeah I suppose there would be some.  Sole proprietor type deductions?

Do you think the mortgage interest deduction is pandering to the wealthy?

[Belsnickel]

(06-22-2015, 02:06 PM)michaelsean Wrote: Yeah I suppose there would be some.  Sole proprietor type deductions?

Do you think the mortgage interest deduction is pandering to the wealthy?

Nah, medical expenses. Cancer will do that.

I think keeping the mortgage and charitable donations deductions alone is pandering to the wealthy because they are the ones that do benefit the most from those two deductions. The middle class is currently benefiting from the mortgage interest deduction, though we will be seeing that decrease as the middle class continues to shrink and the Millennials fill in what is left of the middle class since we are not buying homes like the generations before us.

So those deductions in and of themselves are not pandering, but getting rid of all the others and keeping only those two? That's pandering to the wealthy.

[*michaelsean*]

(06-22-2015, 03:08 PM)Belsnickel Wrote: Nah, medical expenses. Cancer will do that.

I think keeping the mortgage and charitable donations deductions alone is pandering to the wealthy because they are the ones that do benefit the most from those two deductions. The middle class is currently benefiting from the mortgage interest deduction, though we will be seeing that decrease as the middle class continues to shrink and the Millennials fill in what is left of the middle class since we are not buying homes like the generations before us.

So those deductions in and of themselves are not pandering, but getting rid of all the others and keeping only those two? That's pandering to the wealthy.

You see I think I've benefited more than the wealthy.  The few thousand dollars I save is more valuable to me than what the wealthy save, plus it's phased out for them.  If close to 60% of people in the $50,000-$100,000 range itemize, then taking it away and charitable donations hurts them. 

I'm not saying this to preserve it for myself.  I'm guessing within a few years the interest portion of my mortgage will go below the point where it combined with local, state, property taxes and charity beat out the standard deduction.

[Belsnickel]

(06-22-2015, 03:19 PM)michaelsean Wrote: You see I think I've benefited more than the wealthy.  The few thousand dollars I save is more valuable to me than what the wealthy save, plus it's phased out for them.  If close to 60% of people in the $50,000-$100,000 range itemize, then taking it away and charitable donations hurts them. 

I'm not saying this to preserve it for myself.  I'm guessing within a few years the interest portion of my mortgage will go below the point where it combined with local, state, property taxes and charity beat out the standard deduction.

I get what you're saying, but keep this in mind. If all the other deductions go away, and we're not just talking the ones for itemized either, we are talking student loan interest, tuition expenses, educational materials, and a whole host of others I can't think of right now because I've spent too much time in higher ed and away from taxes, that is a lot going away for the lower-middle class homes (and I say this because oftentimes the upper income folks make too much to benefit). What is left is the charitable donations and the mortgages, two of the ones the wealthy can benefit from, and that lower income folks don't so much.

So the strategy being employed here is a smart one by Paul. He is giving the shaft to the lower-lower middle class households, and truly middle class households as well, but by maintaining those two that there are middle class families benefiting from he gets to keep the wealthy happy and hide behind the shield of "but these help the middle class, too!" This is why I consider this move to be pandering to the wealthy.

[StLucieBengal]

Millennials are buying homes. Rental rates are rising and pushing them to purchase homes.

I have sold quite a few flips recently to those young people.

[*michaelsean*]

(06-22-2015, 03:48 PM)Belsnickel Wrote: I get what you're saying, but keep this in mind. If all the other deductions go away, and we're not just talking the ones for itemized either, we are talking student loan interest, tuition expenses, educational materials, and a whole host of others I can't think of right now because I've spent too much time in higher ed and away from taxes, that is a lot going away for the lower-middle class homes (and I say this because oftentimes the upper income folks make too much to benefit). What is left is the charitable donations and the mortgages, two of the ones the wealthy can benefit from, and that lower income folks don't so much.

So the strategy being employed here is a smart one by Paul. He is giving the shaft to the lower-lower middle class households, and truly middle class households as well, but by maintaining those two that there are middle class families benefiting from he gets to keep the wealthy happy and hide behind the shield of "but these help the middle class, too!" This is why I consider this move to be pandering to the wealthy.

In that context I can see it, but they do still have the diminishing deduction based on income.  I can see it being more important to the upper middle class or whatever you might call the guys making middle six figures than the truly wealthy.

[fredtoast]

(06-22-2015, 01:21 PM)michaelsean Wrote: Looks like about 58% or so of the people making $50,000-$100,000 itemize.  They aren't doing that without the mortgage interest deduction.

http://www.freeby50.com/2012/12/what-percent-of-tax-filers-itemize.html

And almost 90% of people who make over $100K do, while less than 20% of people who make less than $20K

Thanks for proving my point.  

I never said that some middle class people did not benefit.  I just pointed out that it helped the wealthy much more than the middle and lower classes.

[fredtoast]

(06-22-2015, 03:19 PM)michaelsean Wrote:   If close to 60% of people in the $50,000-$100,000 range itemize, then taking it away and charitable donations hurts them. 

If we close loopholes like these for the wealthy then we can lower the tax rates for the middle class and they ALL will benefit instead of just 58%.

[*michaelsean*]

(06-22-2015, 05:11 PM)fredtoast Wrote: And almost 90% of people who make over $100K do, while less than 20% of people who make less than $20K

Thanks for proving my point.  

I never said that some middle class people did not benefit.  I just pointed out that it helped the wealthy much more than the middle and lower classes.

People making less than $20,000 don't pay income tax .  Sorry we can't help them get it lower.

It may help them more as in total dollars, but a middle class family saving a couple of thousand dollars is probably a bigger benefit to them.

[*michaelsean*]

(06-22-2015, 05:14 PM)fredtoast Wrote: If we close loopholes like these for the wealthy then we can lower the tax rates for the middle class and they ALL will benefit instead of just 58%.

You'd have to find out how much money that actually is.  And it does diminish as the income increases.  As do charitable donations.

[fredtoast]

(06-22-2015, 05:40 PM)michaelsean Wrote: People making less than $20,000 don't pay taxes.  Sorry we can't help them get it lower.

Doesn't change the fact that you posted an article that supports my position instead of yours.

Thanks again. 

[*michaelsean*]

(06-22-2015, 05:44 PM)fredtoast Wrote: Doesn't change the fact that you posted an article that supports my position instead of yours.

Thanks again. 

No it didn't.  Read your initial comment.  

[fredtoast]

(06-22-2015, 05:42 PM)michaelsean Wrote: And it does diminish as the income increases. 

It is limited to $1 million.

Do you realize how large of a mortgage you would have if you paid $1 million in interest?

[*michaelsean*]

(06-22-2015, 05:48 PM)fredtoast Wrote: It is limited to $1 million.

Do you realize how large of a mortgage you would have if you paid $1 million in interest?

It is also gradually phased out as your income increases.

[fredtoast]

(06-22-2015, 05:46 PM)michaelsean Wrote: No it didn't.  Read your initial comment.  

Every comment I have made about it claims it benefits the wealthy much more than the middle and lower classes.

the article you posted supports this claim.

[*michaelsean*]

(06-22-2015, 05:53 PM)fredtoast Wrote: Every comment I have made about it claims it benefits the wealthy much more than the middle and lower classes.

the article you posted supports this claim.

You said the mortgage interest deduction is pandering to the wealthy when it helps millions of people.  

[fredtoast]

(06-22-2015, 05:56 PM)michaelsean Wrote: You said the mortgage interest deduction is pandering to the wealthy when it helps millions of people.  

It is pandering to the wealthy because it benefits them much more than the middle and lower classes.

Not only do the wealthy have larger mortgages, but the deduction is worth more because they are in higher tax brackets.  A $10K deduction is worth $2500 to a person in the middle class but worth almost $4000 to a person in the top bracket.

[*michaelsean*]

(06-22-2015, 06:01 PM)fredtoast Wrote: It is pandering to the wealthy because it benefits them much more than the middle and lower classes.

Not only do the wealthy have larger mortgages, but the deduction is worth more because they are in higher tax brackets.  A $10K deduction is worth $2500 to a person in the middle class but worth almost $4000 to a person in the top bracket.

Again it is phased out up to 80% for the richest. The phase out begins at like $165,000. And the $2500 is much more important to the middle class guy than the $4000 to the rich guy.

Bottom line is if you take it away, you hurt millions of middle class families. How much do you think you could cut their taxes by eliminating the interest deduction? I have no idea how to figure that out.