>> So what's different from now? The tax laws already favor not working vs. working <<I agree, but that's no justification for making this worse. The worse a deal working becomes versus *choosing* not to work (I'm focusing on people who have the means not to work, not those who are physically/mentally unable to work or are actively seeking work), the more people will choose not to work, IMO with potentially disastrous consequences.>> Unearned income is treated differently than earned income. Even if you and I had identical realized incomes and identical deductions, I'd still pay lower Federal taxes than you do because unearned income is not subject to SS and Medicare taxes nor is it subject to the state disability tax. Unfair as that may be, that's the situation now. <<True. I don't see this as a problem with Social Security because what you get out is related to what you pay in. But choosing to opt out of the work force you are not only reducing your current Social Security taxes to zero, but also agreeing to reduce your eventual payout. Not so much with Medicare. To the extent this program as we know it should continue to exist, I think it should be funded with something other than payroll taxes. Be that as it may, with a combined employer-employee contribution of 2.9% for Medicare, it isn't the backbreaker that another 14% payroll tax would be.>> In any case, you will be getting a "free" ride in 10 years if nothing changes. <<Well, certainly a "discounted" ride. And I think that's not good tax policy, but I will accept it. >> It's never made sense to me to pay $1.00 in interest to save cents in taxes. <<Me neither. The only problem is that it means I can't write off property taxes or gifts to charity because they fall below the standard deduction. Be that as it may, that's less important than the good feeling of owning your home free and clear.#29
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