Why your Federal taxes eventually have to go up:

Federal Tax Liability – What’s Federal Tax Liability?

Assume an upper middle class person making about $100,000, married with 3 kids and a mortgage ($350,000 remaining balance at 6% interest rate). How much such a person contributes to our Federal tax base? The results might sock you:

$100,000 Gross salary
- $15,000 401K contribution
_________
$85,000 Reported gross income

-$10,000 Traditional IRA ($5,000 self, $5,000 spouse)
_________
$75,000 Adjusted Gross Income (AGI)

-$32,000 Itemized deductions (State/local tax $3,500, Real estate tax $8,500, Mortgage interest $20,000)

-$17,500 (Personal exemptions - $3,500 each self, spouse and 3 kids)
_________
$25,000 Taxable Income

$3,023 Regular tax, however due to child credit
-$3,000 child credit
________
$23

Federal Tax liability= $23 for FY 2008

How do you really think the US Government will eventually pay for all this spending?

I am only stating the facts here.

Try the numbers yourself:

http://www.hrblock.com/taxes/tax_calculators/index.html

The net in this example is $43,000 (AGI $75,000 - $32,000 deductions), and yes a family of 5 can live conservatively with $43,000 net a year.

BTW, the principle in the above example is only $4250 (first year).

Check the amortization table at:
http://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx

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