Tax Attack

The latest in the string of pre-election attacks on the President was launched from the bastion of reliable reporting, the New York Times. Once known as one of the nation’s premier newspapers it has become little more than a tabloid for the Left. They apparently obtained access to the President’s income tax filings and reported that Donald Trump paid no income tax in 11 of the past 18 years. They also noted that for the tax year 2019 he paid a total of $750 in income tax. This has now become a major Biden campaign ad proclaiming stating that teachers and firefighters pay more income tax than the President. As terrible as this sounds, Americans have complained for decades that the tax code favors the wealthy despite the graduated income tax payment scale. The unfortunate fact is many wealthy individuals do not have a typical income-paying job from which payroll taxes can be withdrawn. Lest the average shift worker decides to criticize the President, recall that we recently discovered that Amazon paid NO INCOME TAX on the billions of dollars that this corporation makes every year. How about looking at the lavish wealth displayed by Speaker Pelosi with her extravagant refrigerator and ice cream at a time when the economy was shut down. To be fair the income taxes of all Senators and Congressional members should be up for public display. How is it that Washington creates millionaires and billionaires in some cases? The system is rigged by the people who pass the laws and have the most to gain. The President has donated his presidential salary every year since his election and reported a $451 million loss this past year from all of his many enterprises. Under our present tax laws, losses are deductible from income as are many other expenses. Investment in equipment entitles businesses to certain deductions as is depreciation on that equipment. Wealthy Americans have learned sophisticated tax avoidance strategies to minimize their tax burden. In 2016 Hillary Clinton attacked Trump for not paying taxes and his response to her accusation was simply, “That show’s I’m smart.”

Tax evasion (not paying taxes that are owed) is illegal but tax avoidance is legal. Warren Buffet famously said that he pays less in taxes than his secretary but that once again assumes that he has little taxable income and much of his wealth is sheltered. Income tax rates are graduated but long-term capital gains tax rates (where much of upper class wealth is stored) are generally much lower. Taxes on stocks or real estate aren’t due until such time that the stock or real estate asset is sold. The wealthy often hold such investments until they have large capital losses in another area that offset any other capital gains. The tax bill passed in 2017 included many tax breaks for business owners that would encourage risk-taking and innovation. But these are tax breaks not available to the average person and benefit only the wealthy. Elimination of the death tax has benefited the wealthy by allowing them to pass assets tax-free to their heirs at the time of death. The 2017 tax law doubled the amount of a deceased person’s wealth that’s shielded from the estate tax from about $5.5 million to more than $11 million. If the NYT’s report on the Trump taxes is upsetting, just think of the billionaires that have not been brought to light by the NYT or any other newspaper. We should all encourage Congress to rewrite the tax code and eliminate the numerous giveaways that benefit the wealthy and increase the burden on the remainder of America’s working class.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s