taxes

5 tax deductions that favor the rich

It's good to be rich
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It's good to be rich

When it comes to tax deductions, it is good to be rich -- the richer, the better.

Middle-class America enjoys some of the same tax breaks as the wealthy on things like the mortgage interest on home loans, capital gains on retirement investments and donations made to charity.

However, the rich enjoy these deductions and others to a wildly disproportionate degree when compared to the rest of taxpayers. According to the National Priorities Project, America's top earners will get an average tax cut of $66,384 in 2011 while the bottom 20 percent will realize an average tax savings of about $107.

Seth Hanlon, director of fiscal reform for the Center for American Progress, says that while all tax breaks are well-intended, the "upside-down" nature of some miss their target.

"Most people don't see these as being government expenditures, but from an economic and budget point of view, they're really the same thing as programs that spend money directly," says Hanlon. "There are ways to reform them to make them work better."

Many agree, including President Barack Obama, Warren Buffett and Bill Gates.

Here are five tax deductions that help the rich get richer.


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