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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Per TurboTax:
AGI = $132k
ETR:  9.49%[/quote]

[quote=Anonymous]HHI: 151
ETR: 9.5[/quote]

[quote=Anonymous]HHI : 164
ETR : 10.3[/quote]

WTF. This is part of the problem with our tax system. People making over $100k should NOT be paying 10% or less in taxes. I make $35k and my tax rate was something like 22%. Total BS.[/quote]

Try buying a place.  It helps.[/quote]

How the f*** do you think I can afford to save a down payment for a house making $35k a year? I'm stuck throwing away rent every month because I don't have any extra $ each month after my 20% TAX RATE. Seriously this is ridiculous and what is really f***ed up with America.

Also to the PP who suggested I make charitable contributions: I take home $26k a year after taxes and you think I'm about to contribute more than $6,500 (or whatever the standard deduction is, can't remember exactly) in order to itemize and pay less taxes? I want some of what you're smoking. [/quote]

A couple of things here.

1) You're right. The mortgage interest deduction disproportionately benefits people with incomes in higher ranges (but not the ultra millionaires, who generally don't have mortgages). Policymakers know this, which is why there's a serious effort to curtail the mortgage interest deduction. This is led by congressional Republicans mostly, and is likely to be fought hardest by Democrats (who generally represent urban areas, where housing is more expensive). W&M Chair Dave Camp just proposed capping the deduction at interest on a $500,000 mortgage (the current level is $1.1 million, including home equity). Most people know that deducting a dollar of interest is worth a lot more to those in the top income brackets than those in the lower (40 cents on the dollar vs. 10 cents on the dollar). So, I would fully expect the mortgage interest deduction to be rolled back in the next five years or so. The deduction for second mortgages (second properties) is almost certainly going to go away.

2) I'm guessing you are young, correct? I made $35,000 in my early 20, too. I didn't buy a house until I was 31. Something to think about.[/quote]

the mortgage interest deduction helps us - on a AGI of 73K.  I really don't think you would consider that an income in the higher range[b] for this area[/b].....   we'll be okay with that deduction but it wouldn't be as easy as for some.[/quote]

AGI of $73,000 isn't middle class. Not by ordinary standards in the country. The median income is in the low 50s. for a household.

If you made $73,000 in, say, Columbus and paid $175,000 for your house, borrowing $150,000 at 4%, you'd pay a little over $710 a month in interest charges. Over the course of the year, you'd pay $8,400 or so. That's $4,000 beneath the standard deduction $12,400. I suppose you could add whatever state income and property taxes to the mix, plus charitable deductions. Say you put together another $6,000 in deductions between those items. Now you have $14,400 to itemize. You're in the 15% bracket at that point, so the tax savings there for itemizing is $300. It's not nothing, but [b]hardly catastrophic.[/b]

Now say you make $273,000 in DC. And you pay $975,000 for your house, borrowing $750,000 at 4%. Your monthly interest charges at first would be nearly $3,600, or $43,200 for the year. Throw on another $10,000 for property tax, another $10,000 for state income tax, and $5,000 for charitable donations (about 2% of income, which is fairly typical). Now you have itemized deductions of $68,200. Back out the value of the standard deduction and you have roughly $56,000 in additional deductions. You're in the the 33% tax bracket, so that's a tax savings of $18,400 or so.

That's the difference.

Remember: Only a third of Americans itemize their deductions. And only 2/3 of homeowners have any sort of mortgage at all. The rest own their home outright.[/quote]

Please note that is why I said "for this area".  I also said we would be fine without the deduction.  I never said catastrophic.[/quote]

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