When you look closely at the top tax deductions, the rich make out like bandits. While some people in the middle class get to enjoy some of the tax breaks enacted by congress, the true beneficiaries of tax write offs are the wealthy.

Do you know the top earner’s in America will receive an average tax benefit of about $75,000 in 2014, while those in the bottom 20 percent will get tax savings that averages out to about $197.

I have always advocated for a flat tax for everyone, but most people are against that idea. Just ask yourself, who benefits more from all the deductions embedded into our tax codes? The wealthy by a wide margin!

Can you imagine Warren Buffet paying less taxes than his secretary. The tax codes needs to be reformed, but don’t bet on it as our politicians have sold out America to the highest bidder long time ago.

Since 45 percent of eligible Americans do not care to register and vote, what we have is a rule by the vocal minority. Here is a good chart of the % of voters in the past few elections.

So before you start complaining about our lousy politicians, have you done your part to make it better. Expecting others to do the work, is one of the reasons we have tax laws that favors the wealthy over the average citizen.

Below are 6 Top Tax Deductions That Favors the Wealthy

1 – Why Are You Allowed to Deduct State and Local Taxes?

Because the politicians from some of the highest taxing states fought very hard to get it enacted. To benefit from this tax break, you have to itemize your deductions when you file your taxes.

The biggest beneficiaries of this deduction are the wealthy, some property owners, and mostly residents of high tax states.

You’re allowed to subtract all general state and local taxes in calculating your federal taxable income.

If you live in a low tax state, I am sure you’re mad as hell about this deduction. Be assured nothing good will come out of any tax reform passed by congress, as long as most of our citizens refuse to vote.

The current members will not create a fairer tax legislation that benefits the middle class and the poor, because they need to win the next election and that requires donations from the rich.

So complain all you want, your only recourse is to vote them all out!

2 – The Mortgage interest tax deduction: Is it an Incentive to Buy a Home?

Any interest you pay on a loan secured by your home or second home is called mortgage interest. You’re allowed to take this tax deduction, even if your loan is a line of credit or home equity loan.

The only requirement for qualification is that your property must be pledged as security for such loans.

But what about if you’re renting, does that mean you pay more in taxes? Yes by a wide margin! Why should we have tax laws that discriminate based on wealth status.

If you choose to buy a house, your choice should be based on sound financial planning not because of special benefits that only applies to those that own real estate.

Our tax law should not be used as a punishment tool, rather it should be made simple and fairer, so that our government bureaucracy have the funds to function better.

The Mortgage interest tax deduction mostly benefits the rich, and some homeowners in the middle class. It certainly punishes most Americans that have decided to rent, rather than buy a home.

3 – Capital Gains: The income that’s treated very special

Our tax law should not discriminate as to how you made your money. If you make a buck shovelling snow, you must pay your fair share of taxes on it.

The current capital gains tax law helps the rich avoid paying their fair share of taxes. Based on IRS rules, any gain from investment will be taxed at a lower percentage than wage earners.

What a bunch of nonsense! Earnings should be treated like wages. Are we not all Americans? Shouldn’t the tax laws benefit all citizens equally?

Why is it we still have this regressive tax law on our books? Rise up Americans and vote!

Warren Buffet and others like him, should not have to pay less taxes just because the income came from investments.

In your current job you invested your time and energy, and those wages should be treated as capital gains, if you asked me.

Do you know that 0.3 percent of American taxpayers get 70% of the capital gains benefit.

I am not against people that have money, but the tax laws should not help them get richer at the expense of the average citizen of our great country.

4 – Do You Know About Step-up in Basis?

Of cause not, unless you’re loaded with wealth that needs to be tax dodged before you can pass it to the next generation.

This tax deduction scheme cost our federal government at least $45 billion in lost tax revenue every year.

The step-up basis is a legal way used by the rich to pass on assets to there heirs without paying a dime in taxes.

Under the special IRS inheritance rule, anyone inheriting an asset or assets that have substantially increased in value, can have the base value increased to reflect the current cost. Yes I know it sounds crazy, but let me explain it further.

Lets say your deceased relative leaves with a building that he paid $50,000 for 30 years ago.

You’re allowed to increase the value of the asset to their current value, thus meaning if you sell it two or three years down the road you’ll only be taxed on the gains that occurred after you inherited it.

Here is a direct link to the IRS explanation page about this tax avoidance deduction scheme

Now you know why the wealthy families remain rich for many generations, despite the so called estate tax laws.

5 – Retirement savings Accounts

While this tax law is simply about arithmetic, the rich benefits more because they have more disposable income.

Every year Uncle Sam loses about $160 billion dollars or more in potential tax revenue because people are sheltering their income in pension plans, 401(k) plans, and individual retirement accounts.

Based on recent analysis by the tax policy center, at least 80 percent of the retirement benefits goes to the top 20 percent of income earners.

While 60 percent of Americans only get 7% of the benefits of the retirement savings tax deduction.

Why should our government be subsidizing certain behaviors and not others. If you want to save for your retirement then do so, but the tax laws should not be used to make that happen.

We are all Americans, why should people that have no retirement savings be subsidizing those that do? I urge the citizens in the bottom to rise-up and start voting now!

6 – Charitable deduction: This is The Worst tax Avoidance Tool on The Books

It’s bad enough that religious institutions get to pay no taxes, but giving tax benefits to those that decide to donate to charity is costing our government billions of dollars in needed revenue.

Most Americans do not even bother to claim the donations they give to charity, and that’s a good thing.

Your choice to part with some of your money should not be incentivized by government tax laws.

This charitable deduction is mostly for the rich, and most of them would not give a dime if they get no tax benefits from it.

Personally,I think your decision to do good should come from the bottom of your heart, not because of some perceived tax write-offs.

Now you know why we have so many charity organizations in America with questionable and verifiable good activities. Some are just created for tax avoidance purposes.

Ever wonder why there are so many charitable foundations in this country? You trace the problem to this tax law, and many others passed by congress to make the rich pay as little tax as possible.

Some of you would read this article and just go about your business, hoping others would do something about our unjust tax codes. Keep on dreaming if that’s your plan.

I am glad some of you would be pissed-off about all this unfair top tax deductions that benefits the wealthy over the average citizen, and now you can do something about it.

As a minimum effort, you must register and vote at every election. You should start voting for people that have the same means as you.

Hey, the rich always vote in the rich, and whom do you thing they would favor? The wealthy with absolutely no doubt.

Either you get off your rocking chair, and join the activist movement, or watch as the tax laws are made more regressive year after year.