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I promise this will be my last attempt.
Let's say you and I both have families of 4, we both do the same work and make $80,000/yr., I own a $500,000 house with a $400,000 mortagage, you rent.
Tax time, for sake of argument all other things being equal, let's say our average tax rate is 20%. I have $20,000 in mortgage interest to deduct and you don't. My tax bill is $12,000, yours is $16,000.
There is more.
My house appreciates 5% per year for 10 years. Now my house is worth $814,447. Bamm a $314,447 return on the $100,000 down payment. So, along the way I started buying rental property. And I have, lets say $2 million in rentals, and I get gross rental income of $150,000 per year. I have quit my job.
Let's also say you have worked hard and got raises during that time and now make $125,000. Let's also say the democrates raised taxes on the rich, so now your average tax rate is 35%. Your tax bill is $43,750. You still rent.
On my rental income I get to depreciate (an appreciating asset) the properties, and I have interest expenses, insurance, maintenance, advertising costs so that the net taxable amount is let's say $25,000. At that level of income let'say my average tax rate is 10%. My tax bill is $2,500.
I own my home and have $2 million in realestate, you have high income and a lease. The tax code and democrats call you rich, and I am in poverty making only $25,000 with a family of four.
You know... after thinking about this... I' going to become a democrat...they are really the party looking out for the real rich. Please everyone forget everything I have ever said negatively about my new party...Oh, and please keeping renting. Thank you
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