IRS Loopholes

I love it when the democrats talk about all of the tax loopholes given to the rich. It is hilarious since 99% of all the loopholes are for lower income filers. These loopholes are phased out as your income rises. About the only loophole for the ‘rich’ (it is actually is for everybody but the rich are more likely to have it) is capital gains for investment income is only taxed at 15% as opposed to your income bracket rate. As your income increases, losses on rental property will not lower your adjust gross income, student loan interest is phased out, mortgage interest is phased out…these are just a few examples of the ‘biggies’. The media hype about loopholes for the rich is so incorrect. Ask your CPA about it - he/she will tell you the same.

Don’t get me started.

Please unload.

Capital gains at 15% is a biggie, especially since the only people who’s total income is based on cap gains is the rich. Also, mortgage income hits “the rich” at a higher bracket so it doesn’t necessarily phase out. Plus, it phases out at 1 million – do we really need to give someone a tax break on a million dollar mortgage?

What about equality?

Well Deebo since you ask…

Phase outs are not loopholes. “99% of loopholse are for the lower income filers” Can’t believe you just said that. stick with what you know please. ie your sh*t Juice

I did just say it. Rest assured we’re all thinking it. Maybe I’d respect you a lil if you’d comment being you’re the almighty CPA who somehow broke your way on to AF. Otherwise keep chuggin the hatorade.

@CFAvsMBA Actually you said “99% of the loopholes” not “99% of the loopholse”…

@stormyhotel I’m not sure I’ve ever seen a generally accepted definition of tax loophole. One person’s tax break is another’s loophole. If all tax breaks are loopholes, then CFAvsMBA is likely correct.

“(it is actually is for everybody but the rich are more likely to have it)”… Name one loophole “for the poor” which is not "( actually for everybody but the _ Poor _ are more likely to have it)…

And I suppose the poor have tons of lobbyist creating these special loopholes just for the poor. Generally, the Dems are more concerned with corporations( Say GE, Exxon) exploiting the tax rules than wealthy individuals who make $2000 grand a day such as your self.

Bow out lil hommie.

… politicians would never give lower income people breaks or benefits to get votes…

jmh530…thank you for the valuable contribution to this dialogue…I am sure you can also find a generally accepted definition of valuable contribution.

EITC and Child Tax Credit. Many single moms (which is a whole nother can of worms) not only get child support (tax free of course), but many also pay zero in federal/state taxes when the aforementioned credits are factored in.

well it depends on how you view a loophole. If you view a tax loophole as a means by which on party avoids complying with the tax law (e.g. paying the statutory rate) by taking advantge of some abiguious portion of the law, then none of the things mentioned are tax loopholes.

Most of what people call tax loopholes are benifits provided by Congress to buy votes. The so called loopholes were placed into the code by Congress with the intent that they be used and as a way for them to say “see what I did for you”

So, why now is everyone crying that people take advantage of very goodies that Congress handed out?

I think what CFAvsMBA is saying that the vast majority of those breaks, in terms of thier reduction to tax as a percent of income, are provided to lower income filers. This can be seen simply by looking at the fact that something like 47% of filers paid NO income tax.

As for real estate interest deduction, you need to realize that in many areas of the country a millon dollar mortgage is not a mansion. If could in fact be a 980 sf house in Palo Alto, CA

I would like to make $2000 grand a day. That’s like, over a million.

Deebo stop…Men can get those same credits!! I guess the war on women keeps raging on.

Those damn lazy single moms keep getting 99% of the loopholes

Stormy. What’s your response to the EITC that CvM also mentioned? Directly from the IRS website:

“EITC, the earned income tax credit is a benefit for certain people who work and have low to moderate wages. A tax credit means more money in your pocket. It reduces the amount of tax you owe and may also give you a refund.”

A) Untill the “poor” are paying any taxes at all, why would you even arguing about “loopholes” its a moot point. You don’t need exemptions/credits/loopholes if you aren’t paying taxes.

B) That “sh*t juice” thread is much more valueble than this argument…

C) Find the thread here or google “barstool economics”

“In releasing his 2010 and estimated-2011 tax returns, the Romney campaign acknowledged that Mitt Romney made nearly $13 million in “carried interest” — “money that’s paid out to fund managers in return for their labor.” Rather than treating this money as regular income, it’s comes out of a company’s profits and is taxed at the 15% capital gains tax rate — hence, it’s a ‘loophole.’

So, how much did this loophole save Romney? According to experts at the Center for American Progress, around $2.6 million or 20%

According to IRS

Tax Year 2011 maximum credit:

  • $5,751 with three or more qualifying children
  • $5,112 with two qualifying children
  • $3,094 with one qualifying child
  • $464 with no qualifying children

Lets say a lazy single mom with 2 kids gets $5112

Romney gets $2.6Million

$2.6/5112 = 509

Romney = 509 lazy single moms…there goes your 99% theory

My work here is done…

Federal income taxes paid by Romney in 2011 (estimated by him): $3.2 million

Federal income taxes paid by Mitt in 2010 (actual): $3.0 million

Mitt’s charitable contributions in 2010 and 2011 combined: $7.1 million

I can’t stand the guy, but hard to argue that he’s not paying his fair share.