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Because from the increasing tax rate of higher brackets, a reduction of taxable income at a higher bracket saves you more tax than aren't reduction during a lower group. So let's compare the tax saving of contributing $1000 by an individual with a $30,000 income with a single person with a $100,000.

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Defenders in the IRS position would say it comes home to Section 61. The waitress provided a service for me, and I paid for this. Compensation for services is taxable. End of deal.

If you believe taxes are high now, wait till 2011. Within the federal, state and local governments, you'll be paying much more than you're now. Plan hard ahead electricity and you'll need be in a position to limit the damage.

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