There's a huge difference between tax avoidance versus tax minimization.
There really isn't.
Tax avoidance is just that - the act of avoiding paying tax. It's not the act of avoiding tax that you're legally obligated to pay. That is called "tax evasion", not "tax avoidance", and that can result in fines or prison time.
Literally everyone who has ever paid income tax has engaged in tax avoidance. If you've ever deducted a medical expense or a student loan payment, you've engaged in tax avoidance. It sounds like a bad thing to people who are ignorant about how tax policy works, but it's really just the exploitation of rules in the system.
Now, you can make a distinction between tax avoidance that was intended by the drafters of the tax code, and avoidance that was unintended and is opportunistic ("loophole" exploitation), but simply put, everyone has to obey the law as it is written. It's not reasonable to expect the public to not only obey the law, but try to guess at what the people who drafted it were trying to do, and then avoid situations they weren't aiming for. You're not obligated to try to read the minds of the people who drafted the tax code, nor should you be: you're only obligated to obey the law that's on the page.
To combat this issue, tax authorities create anti-avoidance provisions. Those, too, are rules on the page that must be complied with. In Canada, there is a GAAR - a general anti-avoidance rule - that creates real tax policy problems. There isn't an equivalent in the USA, though there are half-measures. Up here, we call the non-observation of these anti-avoidance rules "abusive tax avoidance", as opposed to just regular tax avoidance, which is regarded as perfectly reasonable taxpayer behaviour. Locke may know if there is a different term for it down south of the border.
To sum up:
If Trump simply engaged in tax avoidance to lower his tax bill or wipe it out completely, there's nothing wrong with that - that's simply following the rules in the most advantageous way you can.
If Trump has failed to abide by the anti-avoidance provisions that are relevant to his tax circumstances, that's a violation of the law that may result in fines or penalties against him, or it may just result in liabilities for back taxes.
If Trump has failed to accurately report his income (i.e. he earned more than he put on his returns), or has made a false statement in a return, that may be tax evasion, which would be illegal and possibly subject to criminal sanction.
In reality, though, Trump isn't the one actually filing these returns. Unless he's legitimately done something criminally sanctionable, it seems likely that he would be subject to monetary penalties that he would then get back from his tax advisors as damages, which they would then claim against their insurance. That's just a guess, really, but it seems like the most likely way that any action against Trump for tax shenanigans would play out.
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Last edited by CorsiHockeyLeague; 09-29-2020 at 11:26 AM.
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Trump is also retweeting Project Veritas' newest crackpot theory that people connected to Ilhan Omar were paying $200 to random people to harvest their votes on mail-in ballots.
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Tax avoidance is just that - the act of avoiding paying tax. It's not the act of avoiding tax that you're legally obligated to pay. That is called "tax evasion", not "tax avoidance", and that can result in fines or prison time.
Literally everyone who has ever paid income tax has engaged in tax avoidance. If you've ever deducted a medical expense or a student loan payment, you've engaged in tax avoidance. It sounds like a bad thing to people who are ignorant about how tax policy works, but it's really just the exploitation of rules in the system.
Now, you can make a distinction between tax avoidance that was intended by the drafters of the tax code, and avoidance that was unintended and is opportunistic ("loophole" exploitation), but simply put, everyone has to obey the law as it is written. It's not reasonable to expect the public to not only obey the law, but try to guess at what the people who drafted it were trying to do, and then avoid situations they weren't aiming for. You're not obligated to try to read the minds of the people who drafted the tax code, nor should you be: you're only obligated to obey the law that's on the page.
To combat this issue, tax authorities create anti-avoidance provisions. Those, too, are rules on the page that must be complied with. In Canada, there is a GAAR - a general anti-avoidance rule - that creates real tax policy problems. There isn't an equivalent in the USA, though there are half-measures. Up here, we call the non-observation of these anti-avoidance rules "abusive tax avoidance", as opposed to just regular tax avoidance, which is regarded as perfectly reasonable taxpayer behaviour. Locke may know if there is a different term for it down south of the border.
To sum up:
If Trump simply engaged in tax avoidance to lower his tax bill or wipe it out completely, there's nothing wrong with that - that's simply following the rules in the most advantageous way you can.
If Trump has failed to abide by the anti-avoidance provisions that are relevant to his tax circumstances, that's a violation of the law that may result in fines or penalties against him, or it may just result in liabilities for back taxes.
If Trump has failed to accurately report his income (i.e. he earned more than he put on his returns), or has made a false statement in a return, that may be tax evasion, which would be illegal and possibly subject to criminal sanction.
In reality, though, Trump isn't the one actually filing these returns. Unless he's legitimately done something criminally sanctionable, it seems likely that he would be subject to monetary penalties that he would then get back from his tax advisors as damages, which they would then claim against their insurance. That's just a guess, really, but it seems like the most likely way that any action against Trump for tax shenanigans would play out.
The more I read, it seems that Trump plays very fast and loose by deducting his whole lifestyle as a business expense. His kid's private school, hair, jets, homes, cars, golfing are all business expenses.
Those laws seem pretty grey. We all know the IT contractors who incorporate themselves and buy season tickets, lease cars, boats, apartments and all that under their company and tell themselves it's ok because they once took a client to a game or on a boat. They seem to get away with it for years. Trump is doing that to the extreme. I assume he could be found guilty of something for it, but it also seems like those cases are hard to prosecute.
There should be some tightening of the rules, I would think.
If the debate between these two actually sways your vote at all, you simply haven't been paying attention. I can't imagine there are still undecided voters at this point.
The few undecideds who still exist probably won’t watch a debate or vote anyway. This debate is purely for entertainment. Daniel Dale will be live fact checking.
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I think the debate won't matter at all because whatever happens, Trump's after spin will make it the biggest ever win in a debate there has ever been. All his maga idiots will eat up all those "best ratings ever" and "Sleepy joe" tweets.
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Sanders spent a lot of effort trying not to alienate the democratic establishment by buddying up to Biden whenever he got the chance. He ran his campaign like a creampuff who just wanted to bang his drum one more time, make his money and go home.
I disagree with 95% of the policies that Sanders pushes for, but I think you are dead wrong.
Sanders is if anything not a creampuff. He is one of the few politicians who is actually honorable in terms of actually coming across as not being a complete sellout.
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The information from the NYT says his golf courses are losing money big time, and the same with his hotel in the old post office in Washington. But, why would anyone even believe that's the case? Are these operational losses or losses for tax purposes? Were they profitable at one time, or has his presidency reduced his revenue that much?
I disagree with 95% of the policies that Sanders pushes for, but I think you are dead wrong.
Sanders is if anything not a creampuff. He is one of the few politicians who is actually honorable in terms of actually coming across as not being a complete sellout.
It's what the far left often don't understand - that to get where they want to be, they'll need to make smaller, incremental changes slowly in Washington and be willing to work with the majority. When Bernie does this, it's because he understands this, as opposed to being weak, and it's something that I've found that AOC is starting to learn, compared to her guns blazing approach when she first appeared on the big stage. Some on the extreme left don't want any of that though and are always calling for sharp, drastic changes, which will just leave them unable to win impactful support.
The information from the NYT says his golf courses are losing money big time, and the same with his hotel in the old post office in Washington. But, why would anyone even believe that's the case? Are these operational losses or losses for tax purposes? Were they profitable at one time, or has his presidency reduced his revenue that much?
They look like operating losses, I mean many of his branded hotels and buildings have closed over the last few years, Toronto, Vancouver, plus a bunch in the US. Golf courses are very difficult to keep profitable, especially a high end course where only wealthy people can afford to play. None of this is really surprising, at least to me.
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Trump is also retweeting Project Veritas' newest crackpot theory that people connected to Ilhan Omar were paying $200 to random people to harvest their votes on mail-in ballots.
The police are investigating. Maybe they don't think the vote buying in MN is crackpot?
It's a complicated topic that always seems to be discussed without any nuance.
If a billionaire is losing money every year, should he be paying taxes? Income is generally taxed, not wealth. Taxing wealth makes sense at some level, but every attempt to do so usually causes more problems than it creates.
Then there's the question if a pretend billionaire who owes more than he has should pay any kind of taxes.
It seems that Trump has always taken the position that he doesn't care about his actual wealth, and just enjoys using jets, mansions, penthouses to look rich and enjoy a rich lifestyle. He probably pushed the envelope on what is allowed by the tax code in that area, but it's a completely different issue than real wealthy people not paying a fair share of taxes.
My problem specifically has to do with the way that real estate is taxed.
If you spend $10 million of your own money on real estate, you can take a small deduction on that property and depreciate it for 27 years. So basically $370,000 per year for 27 years straight.
Say your get $500,000 per year from your tenets, and $200,000 of that is allocated towards the cost of running the building and covering your yearly expenses. It means you have $300,000 left over. You simply deduct against the $370,000 each year, and show a $70,000 loss which allows you to avoid paying income taxes, but in reality your cash flow is fine and your asset value goes up each year.
Say the average growth rate of real estate is between 3-5% pear year, so after 10 years your asset has appreciated in value between 30-50%, so now that $10 million is now worth $15 million, and you sell your property you only worry about capital gains tax.
To me that seems massively unfair, and it is exactly what Trump and other large real estate holders are doing. I don't get why you should be able to depreciate against an asset that actually increases in value each year.
Same reason all the billionares are buying up massive amounts of land, farms and ranches. They can effectively reduce their tax exposure to radically low numbers because of the amounts you can depreciate and write off each year. Especially with land and the massive land taxes being owed.
