Andrew Fildes wrote:
> Wow - now that's what I call a middle class welfare subsidy!
>
Sure, originally created for what seemed perfectly good political and
econominc purposes to encourage home ownership. Now so embedded in the
economy I don't think it can be changed.
But the US tax systems are so unbelievably complex and fragmented that
you really can't tell anything much without doing an audit of all the
taxes you pay and dividing by total income, which nobody does.
So I get a mortgage deduction, not from taxes, but from income. Back in
the late 70s, early 80s, when marginal rates were higher and my late
wife and I were both working at decent professional jobs, our marginal
tax rate was 45% Federal and 11% State, so any additional $ we spent on
a mortgage cost us only 44 cents. (It would have been $12-15,000 cheaper
to be unmarried the way taxes worked in those days.) Of course, this
meant charitable donations also only cost 44 cents on the $. There have
been many changes since then, with lower marginal rates, many deductions
discontinued and so on. And I am now retired and have a much lower
income, so each mortgage, charitable or other deduction $ paid now costs
me much more after tax, 85 cents.
I pay taxes to the US govt., the State of California, Alameda County,
the City of Berkeley, The Berkeley Public School District, Bay Area
Rapid Transit District, Department of Motor Vehicles, , Community
College District, The East Bay Regional Park District, and many other
districts and special assessments. Of course, there is some good news
once in a while. I used to pay the City for garbage services, which
weren't deductible as a service. Then the City decided to have the
County collect those fees together with the County property taxes. So
now they are just one line item among lots of property taxes and the
income tax people don't worry about those details, so they are now
deductible. But the City has the East Bay Municipal Utility District,
which is, in spite of its name, not a government agency, getting its
revenue from taxes, but a utility charging fees, collect their sewer
charges, so those are not deductible.
In all, my "Property Tax" bill includes 8 taxes based on a % of the
property value and 19 charges that are based on other criteria, for a
total last year of $5,280. But Calif. passed a law some time ago that
only allows property taxes to increase by 1.5% a year, so I pay much
less than I would if I bought the same house now, which I estimate would
be at least $13,000. It's so hard to tell, because the 1.5% limit
applies only to the % of assessed value based taxes and the rest are
based on various other criteria. Being passed by initiative amendment
to the State Constitution, the elected lawmakers can't change the 1.5%
/yr. limit. And all this stuff is a deduction from income before income
taxes are calculated.
So whose takes do you compare to those in another country, mine, or
those of someone who recently bought a house. Unless, of course, they
bought in the same county where they sold or used the one time seniors
exemption and are still paying the lower amount....... Oh, by the way, I
organized and ran a valuation of all the real estate owned by a big
retailer. I came to know that assessment and property tax practices vary
wildly from state to state and even county to county in many places. The
stated rates mean absolutely nothing in comparison to anywhere else, I
assure you.
And then, I'm also partially self employed, so I pay SS and Medicare
taxes on that income, and I'm an employer of a household employee, Rosa,
who has been coming to clean my house every two weeks for over 20 years.
I pay both the employer's share and her share of SS and Medicare taxes.
All of this is not meant as a complaint of any kind, nor as an
endorsement of the system. It's only to illustrate that any simple
statement about a US income tax rate, only one small part of a system so
mind-bogglingly complex that almost nobody knows how much they actually
pay in taxes, means nothing.
Moose
==============================================
List usage info: http://www.zuikoholic.com
List nannies: olympusadmin@xxxxxxxxxx
==============================================
|