General Discussion
In reply to the discussion: Do you support "scrap the cap" if you make over $118,500, the current cap? [View all]TexasBushwhacker
(21,206 posts)that people who make less do not.
People who are wealthy can write off up to $1.1Milluon in interest on mortgages for first AND second homes. That's $1.1Milion total. At the top tax bracket, that's worth up to $396K - Every year.
The wealthy have enough discretionary income to invest, and long term capital gains is taxed at 23.8% (20% plus a 3.8% Medicare surtax), plus that income is not subject to Social Security tax. Again, that tax break is every year.
Of course, the higher your income is, the more you can save for retirement. If you're a highly paid employee, you can save up to $18K per year, pretax, in a a 401K. Over 50? An extra $6K. Self employed? Great! You can contribute up to 25% of your net self-employment income up to a maximum of $53K - PER YEAR.