The wealthy class as well. Or a stimulus for the building industry
and it keeps the economy afloat. There has been lots of discussion
behind the scenes of doing away with the home mortgage deduction. No
real love for the middle class, but the shaky economy has saved the
deduction for now.
To add to the picture:
Capital gains or the profit of buying and selling is 15 percent, well
below the tax rate for the middle class income.
There is also enough of the word of mouth kind of story to indicate
that there is also a lot of wink wink nudge nudge that goes on in IRS
acceptance of underreporting of income that is considered capital
gain. For instance about ten years ago I was acquainted with someone
who had a girlfriend who was talented in the shopping arena and
turned it into a business. She would cultivated wealthy clients and
she travelled to New York City several times a year to buy very
expensive designer clothes for them. She was clearing well over a
$100K per year but reported and income of $10K. In her fourth year
she got an anonymous call who said they were the IRS and told her
enough for her to realize that they knew exactly how much she was
making. This anonymous voice told her to show at least $35K worth of
her income if she did not want problems. She happily complied. Sadly
people with wages or salaries are not given that slack. Different
rules for different people.
There is an Alternative Minimum Tax on income as well which was begun
because some very wealthy individuals and or corporations found
enough in the way of loop holes and exclusions in the code so as to
avoid taxation completely or at a laughably low rate. It was flawed
in not being indexed to inflation and is now being brought to bear on
the upper middle class. Most of the discussion about it has been an
argument between those who want to fix it to catch those who profit
the most from the commons and do not contribute to it, and those who
want to do away with it entirely.
Winsor
Long Beach, California, USA
On Apr 12, 2007, at 4:44 PM, Andrew Fildes wrote:
>
> Wow - now that's what I call a middle class welfare subsidy!
> Andrew Fildes
> afildes@xxxxxxxxxxxxx
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