10 Government Handouts That Prove Who The Biggest ‘Takers’ Actually Are

So many people love to throw financially struggling citizens under the bus when it comes to taking government money. Goodness forbid a struggling mom need food to feed her kids, or a person who can’t afford healthcare, because we have a nation that thinks health should be for profit, needs to sign up for Medicaid.

What so many fail to recognize, because so many live in the fantasy world that maybe one day they’ll be part of the top one percent, is that the wealthy take and take and take our tax payer dollars… and no one blinks an eye. No one gets their Underoos in a bunch over all the money the wealthy take from hard-working citizens… money they don’t need to even remotely take from the government.

Don’t believe me? Let’s take a look at some of the government handouts the wealthy take.

Yacht Deductions

Did you know that the wealthy can write off their yachts? Yep. Every day, average citizens working their nine-to-fives can’t write off much of anything, but the wealthy? They get a tax deduction for their yachts. Oh, but only if it qualifies as a second home, you know, one you can live on… so you have to be reeeeallly wealthy to get that government handout. How nice for them.

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Mortgage Deductions For Top Earners

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Yes, you’re reading that correctly. According to the Center on Budget and Policy Priorities:

The bulk of homeownership expenditures go to the top fifth of households by income, who typically could afford to purchase a home without subsidies.  According to estimates by the congressional Joint Committee on Taxation, more than three-fourths of the value of the mortgage interest and property tax deductions goes to households with incomes of more than $100,000, and close to a third goes to families with incomes above $200,000.

Overall, more than half of federal housing spending for which income data are available benefits households with incomes above $100,000.  The 5 million households with incomes of $200,000 or more receive a larger share of such spending than the more than 20 million households with incomes of $20,000 or less, even though lower-income families are far more likely to struggle to afford housing.

Makes you feel all warm and fuzzy inside, doesn’t it? But please, continue getting mad at the lady who got her nails done and thought maybe she could have a steak instead of Ramen Noodles for one night.

Capital Gains

Then there is Capital Gains. What’s that, you ask? Well, this is the very reason the extraordinarily wealthy pay so much less in taxes than ordinary folks who live paycheck to paycheck. According to Rebecca Wilkins, senior counsel for Citizens for Tax Justice:

“Capital gains are highly concentrated. Most of the capital gains are earned by folks in the top 10 percent, and it’s even concentrated more than that. So the capital gains tax break, which is a 20 percentage-point difference in the amount of tax that is paid on those, is going almost all to the top 5 percent.”

How much is actually being lost to the wealthy because of this nifty little tax loophole? Upwards of $38.5 billion (with a B).

But please, be mad at the “Obamaphone” — that is actually the Lifeline Program which began under President Reagan and was expanded to cell phones under President George W. Bush.

Gambling Loss Deduction

Yes, you read that correctly… people who gamble and LOSE can claim that too. According to the IRS:

“You may deduct gambling losses only if you itemize deductions. However, the amount of losses you deduct may not be more than the amount of gambling income reported on your return. Claim your gambling losses on Form 1040, Schedule A as an “Other Miscellaneous Deduction”  that is not subject to the 2% limit.”

So if people want to throw their money away, that’s cool… write it off. However, the parents who need to file for Section 8 housing because they recently lost their job because of outsourcing? Yeah, that’s who to get mad at. (sarcasm)

 Corporate Welfare

While many sit and complain about all the supposed money the poor are taking or not contributing in tax dollars, maybe they should stop for a moment and think about how much multi-billion dollar companies are failing to pay in taxes. Guess what, we’re not broke? We just don’t collect. These businesses love to make money off American citizens, yet when it comes to giving back to the nation that gave them the opportunity to make that fortune? Nope. In fact, they often receive subsidies.

More is spent in corporate welfare than traditional welfare.

Retirement

Guess who gets most of the tax subsidies for retirement? Yep, by now you’ve probably guessed correctly — upper income earners.

How great for them! And sucky for the rest of us. Over half the subsidies go to the top earners, while less than one percent reaches the bottom 20 percent of citizens. Basically, they make enough to be able to keep their money. How quaint… and we make sure they do.

Food Subsidies For The Wealthy

No, really, it’s a thing…

While everyone complains about food stamps what about the subsidies for wealthy CEOs and all their lavish meals. When businesses have “business meals” and take clients out to eat… that’s deductible. You know, because they need it to survive. (sarcasm)

The  director of revenue and spending policies at the Center for Effective Government, Scott Klinger explains it best:

“Imagine that the tab for dinner and drinks for 10 executives comes to $1,600. Current tax law allows companies to deduct half of the cost of business meals — in this case, $800. With a corporate tax rate of 35 percent, each dollar of deductions yields 35 cents of tax savings — so that $800 deduction saves $280 in taxes. This means one dinner for 10 people provides more public food assistance than the $279 an average household receives in food stamps for the whole month.”

Yeah, but that lady in front of me at Krogers just bought the fancy cheese in a can… so, really, I should be mad at her. Hmmm…

Charity 

But charity is good, right?? Sure it is, and its even better when you can write it off. According to HuffPo:

“The IRS allows taxpayers to deduct charitable contributions from their taxable income. This amounts to an approximately $43 billion a year subsidy to charitable organizations — and because of progressive taxation, the deduction is more valuable to rich taxpayers than to poor ones.”

Don’t get me wrong, charitable giving is great, but let’s face it, it shouldn’t be a deduction.

Rental Property

Not something we all have, that’s for sure… and it’s usually for people who choose to buy buildings or units as an investment. And honestly, there’s absolutely nothing wrong with that. However, did you know that landlords can write off rental expenses? According to the IRS:

“In most cases, the expenses of renting your property, such as maintenance, insurance, taxes, and interest, can be deducted from your rental income.”

So on top of the mortgage deductions for being super wealthy, you also get to deduct rental expenses. Wow.

Last, but most certainly not least, my personal favorite (favorite?)…

Social Security Limit

While most wage earners, or people with a modest salary, pay into Social Security on all of their yearly earnings, guess who doesn’t? Yep! You guessed right again… the wealthy!

The wealthy only need to pay Social Security up to $118,500 of their earnings on the year. After that… nada.

So while average earners see weekly, bi-weekly, or monthly deductions from our checks, people like Sean Hannity or Rush Limbaugh, or yes even President Obama, only have to pay up to $118,500.

Seem fair? No? Because it’s not… and the “Social Security is suffering” talk is bull sh*t. First of all, it’s not — it’s solvent until 2033. However, imagine if we raised the Social Security cap on wealthy earners, or even better, eliminated it altogether. It would be solvent forever.

So, don’t tell me policy isn’t written to make the rich richer and the poor poorer… because that’s exactly how it’s written. And please stop blaming poor people for trying to survive.

 

Featured image via Wikimedia Commons