How is it that when a poor or disabled person receives some form of government assistance, it is considered welfare and a huge drain on the federal budget, but when a millionaire receives an enormous tax credit for their million dollar mansion, it is nothing more than a standard itemized deduction? In 1913, under section 26 U.S.C. 163 (h) of the Internal Revenue Code, Congress approved the Mortgage Interest Tax Deduction, which allows homeowners to deduct all interest paid on a primary residence with a mortgage up to one million dollars from their taxable income.
Speaking as one who receives Supplemental Security Income (SSI) disability, I survive on $698 a month in benefits plus food assistance. Then consider a person who buys a million dollar mansion at five percent interest receives a $50,000 tax credit the first year of the loan and a corresponding credit every year thereafter for the life of the mortgage. In years when home mortgage interest rates are not at historic low levels, the tax deduction is even much greater. If the interest rate were ten percent, the tax credit would be an astounding $100,000. If this hypothetical millionaire homeowner were paying the top tax rate of thirty-five percent, the tax savings would be $17,500 to $35,000, depending on the mortgage interest rate in these two examples.
Why is our government subsidizing millionaires who buy million dollar mansions and every other homeowner? Depending on whom you ask, I have seen the total number of pages representing the entire U.S. taxation code at more than 70,000 pages. In reality, all you need is one page: that being a schedule listing the applicable tax rate per income level. Every other page in this enormous code document legal means for rich folk and businesses to avoid paying their fair share of income tax.
There is indeed class warfare being waged in this country and it is by the wealthy elite at the expense of the poor and the working class.
Steven H. Spring