In case you are still skeptical the rich receive benefits from government (for which we don’t make them pee in a cup or promise not to buy luxuries),
1. The mortgage interest deduction for big hoUSes and second homes. Thanks to this tax break, the 5 million hoUSeholds in America making more than $200,000 a year get a lot more hoUSing aid than the 20 million hoUSeholds living on less than $20,000. Deductions for mortgage interest incentivize people already capable of buying big homes to buy even bigger ones. In the eyes of the Congressional Budget Office — the official word on this in Washington — the mortgage interest deduction is equivalent to the government offering you money, not you keeping your own money.
2. The yacht tax deduction.
If you’ve got a boat and you’re paying interest on it, that interest is tax-deductible – provided your boat is REALLY, REALLY big. If it has sleeping quarters, a kitchen and a toilet – e.g., it is a yacht – then it can be considered a second home and any interest you pay on it is deductible. But if you jUSt have a garden-variety fishing boat or canoe, SORRY – no deduction for you.
Beyond that, if you have a yacht you can loan it out to a charter bUSiness for part of the year, and keep it for personal USe the rest of the time. This allows you to deduct the purchase price, insurance, maintenance and slip fees too.
3. Rental property.
If you’re a LANDlord you can deduct many of the expenses you incur renting a home, including repairs, advertising, HOA fees and — again — mortgage interest. If you happen to rent out either your first or second home for 14 days or less you get to jUSt pocket all that income without paying taxes on it at all.
4. Fancy bUSiness meals.
for, say, a CEO presiding over actual filet mignon at a five-star restaurant Imagine that the tab for dinner and drinks for 10 executives comes to $1,600. Current tax LAW allows companies to deduct half of the cost of bUSiness meals — in this case, $800. With a corporate tax rate of 35 percent, each dollar of deductions yields 35 cents of tax savings — so that $800 deduction saves $280 in taxes. This means one dinner [even if filet mignon and seafood] for 10 people provides more public food assistance than the $279 an average hoUSehold receives in food stamps for the whole month.
5. The capital gains tax rate.
The annual earnings of many of the ultra-rich come from investments, not from wages. Taxes on investment dividends and capital gains currently max out at about 24 percent But the top income tax rate is 39.6 percent. So investment income is taxed at a much lower rate than regular income.
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