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I know all about itemizing deductions. But that doesn't shelter income. You have to give money away or spend money on interest, etc, to have a deduction. So you spend $10,000 on interest, you save a third of that on taxes, but you haven't sheltered one dime of income. You are still out the $10,000 payment.
And by the way, those deductions GO AWAY for high income earners.
So keep trying. Tell me how to SHELTER w-2 income. Tell me about all of these loopholes that only the rich can get.
Income shelters only defer the taxes on that income. An example is a 401k. If you contribute $15k every year to your 401k, you pay no FIT on that money until you take it out of the 401k. Then it's fully taxable income. There are others, but all they really do is defer taxes to a later date.
Tax deductions or shelters require that you spend money. They don't save you money; they actually cost you money. If you donate $15k every year to charity, you no longer have that money. Your taxes will go down, but the net to you is that you have less money.
There are two other provisions that ensure that high income w2 filers will pay high taxes;
1. Deductions phase out; At certain income levels, your deductions start going away. So you cannot deduct all of your interest expense or your charitable donations.
2. AMT; Alternative Minimum Tax. People who have very high deductions (for interest, charity, house taxes, etc) must pay an AMT. This hits lots of high income earners who have a big house with a loan.
The bottom line is if you have a family with a very high salary, you will pay way more than your share of FIT.
Sigh yet another person complaining about inequalities among outcomes. Look, no matter what you do, there's always gonna be a reason for inequalities. It's just how it is. Life ain't fair.
Sigh yet another person complaining about inequalities among outcomes. Look, no matter what you do, there's always gonna be a reason for inequalities. It's just how it is. Life ain't fair.
How true.....
I just worked and got my own stuff.
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