[RD] Clinton vs. Trump - USA Presidential race.

[Commodore]

They get one deduction and their return is finished.

That's not true at all though. Every year that I've been filling out tax returns I have had the option to itemize deductions or just use the standard deduction. I go with the standard deduction because it gives me a bigger return. And that standard deduction is independent of EIC and deductions for having dependents. So I'm not really sure what tax breaks you think the average citizen isn't getting or where you are getting this idea that the average citizen only gets one deduction on their tax return.

 

[Lexicus]

That's not true at all though. Every year that I've been filling out tax returns I have had the option to itemize deductions or just use the standard deduction. I go with the standard deduction because it gives me a bigger return. And that standard deduction is independent of EIC and deductions for having dependents. So I'm not really sure what tax breaks you think the average citizen isn't getting or where you are getting this idea that the average citizen only gets one deduction on their tax return.

Yep, I mean clearly this tax return shows how strongly Trump can identify with the little people. Really he's just a little guy himself, fighting the evil government like every other God-fearing hard-working American.

 

[Commodore]

Yep, I mean clearly this tax return shows how strongly Trump can identify with the little people. Really he's just a little guy himself, fighting the evil government like every other God-fearing hard-working American.

That's not the part of metalhead's post I'm discussing though. I agree with him on that part. What I take issue with is the idea that the average tax payer is somehow denied tax breaks that the wealthy aren't. The average person doesn't use a lot of those breaks because it doesn't make sense for them to use those breaks in their current situation, not because the system is actively denying those breaks to them.

 

[metalhead]

I never said any of what you're claiming I said. It's not that anyone is being denied tax breaks, it's that regular people don't relate to a $900 million loss being carried forward for 18 years, or having accountants fill out thousands of pages of tax returns.

It takes 15 minutes to fill out and sign a return that claims the standard deduction and child/earned income credits. Claiming that people who do their taxes that way, which is most people, are going to relate to what Trump does to avoid paying income taxes is stupid.

 

[El_Machinae]

We all minimize our taxes
But few of us renege on every inconvenient promise, use the church coffers to pay off personal fines, and then multiply our tales of charity donations by hundreds or thousands.

 

[Lexicus]

That's not the part of metalhead's post I'm discussing though. I agree with him on that part. What I take issue with is the idea that the average tax payer is somehow denied tax breaks that the wealthy aren't. The average person doesn't use a lot of those breaks because it doesn't make sense for them to use those breaks in their current situation, not because the system is actively denying those breaks to them.

But this is plainly and patently false. There are myriad exceptions, deductions, etc. that are in many cases designed to be taken advantage of by rich individuals.
The fact is that rich people have the wherewithal to avoid paying taxes that ordinary people do not. And the tax laws are structured in plenty of ways that help rich people do that.

Anyway, for Trump's specific situation:
http://www.pbs.org/newshour/making-...-moguls-like-trump-pay-no-federal-income-tax/

But we do know the tax laws contributed to Trump’s large losses. A dizzying array of tax write-offs for real estate development — including generous deductions for interest, depreciation, real estate taxes and maintenance expenses — can all help build up tax losses.
As a result, real estate developers get to write off the decline in the value of their properties even as their properties appreciate.

Ordinarily, rising value shows up as capital gains, which is taxable in principle — albeit at much lower rates other income. However, real estate investors often use special “like-kind exchange” rules to defer taxes. These rules apply to real estate, but not stocks or bonds. If a real estate investor exchanges property long enough and dies, the gains are never taxed. President Obama has proposed to limit the like-kind exchange loophole, which Hillary Clinton has endorsed.

In 1986, Congress enacted laws to prevent investors who are not actively involved in a business from deducting losses and expenses attributable to that business against their income from other activities. Congress also added “at-risk” rules, which prevent a taxpayer from deducting losses in excess of his actual economic investment in an activity (that is, his out-of-pocket). Those laws wiped out a lucrative tax shelter business used by doctors, dentists, lawyers and other high-income taxpayers.

But Congress largely exempted real estate developers and professionals from these rules. They continue to deduct their business losses against all of their income, both passive and active. And they are not subject to the at-risk rules. The result: Real estate professionals can use losses against non-real estate income, both in the year the losses arise and in some earlier and subsequent years. This means that Trump’s net operating losses can shelter not only any real estate gains, but also income from reality TV, Trump-branded products, books and speaking from tax.

Without seeing more of Trump’s tax returns, we cannot tell how much of his losses are attributable to poor economic results, favorable tax rules or tax evasion. But we can tell that something is seriously broken in our tax laws.

And in general:
http://www.bankrate.com/finance/taxes/tax-loopholes-mainly-benefit-rich-1.aspx

http://www.accounting-degree.org/accounting-tricks/

http://www.nytimes.com/2015/12/30/b...vate-tax-system-saves-them-billions.html?_r=0

 

[metalhead]

We all minimize our taxes

I'd argue that for most people, the government has done the work of minimizing their taxes for them. That was the whole purpose of the standard deduction, to streamline the process of filing tax returns for most people. If you don't have a mortgage it is likely you take the standard deduction without ever bothering to even ballpark your potential itemized deductions.

 

[El_Machinae]

We don't have that in Canada. I've noticed that it means that most people then don't get a deduction on their charity giving. But even if it's simple to use the full standard deduction instead of itemizing your deductibles, it's still true to say most people use it

The standard deductible is more a tax break than a reward for reinvesting one's income. And ha! A lot of the itemized deductibles are too

 

[Sommerswerd]

That's not the part of metalhead's post I'm discussing though. I agree with him on that part. What I take issue with is the idea that the average tax payer is somehow denied tax breaks that the wealthy aren't. The average person doesn't use a lot of those breaks because it doesn't make sense for them to use those breaks in their current situation, not because the system is actively denying those breaks to them.

What I think you're overlooking is that people apply a double standard to the conduct of super-rich guys. How many times have you heard people complain about the salaries of pro athletes, and the Wall Street CEO bonuses? But who among us has ever turned down a raise or a bonus? It.does.not.matter. Its very easy for people to look at Trump as a dirty tax dodger, and it doesn't amount to a hill of beans for him to claim "you all do it too."

The simple response to that defense is "That's different... cause you're rich and I'm not... I need the money, you don't."

 

[BvBPL]

I never said any of what you're claiming I said. It's not that anyone is being denied tax breaks, it's that regular people don't relate to a $900 million loss being carried forward for 18 years, or having accountants fill out thousands of pages of tax returns.

It takes 15 minutes to fill out and sign a return that claims the standard deduction and child/earned income credits. Claiming that people who do their taxes that way, which is most people, are going to relate to what Trump does to avoid paying income taxes is stupid.

That’s just an excuse for not losing millions in the real estate market and leveraging the massive claims of lost income as a long-running deduction against one’s income. Anyone could do it, but Trump was the one candidate smart enough to lose such a vast sum of money he never needs to pay taxes again. It’s this sort of streetwise gumption that makes him the people’s choice.

 

[metalhead]

What I think you're overlooking is that people apply a double standard to the conduct of super-rich guys. How many times have you heard people complain about the salaries of pro athletes, and the Wall Street CEO bonuses? But who among us has ever turned down a raise or a bonus? It.does.not.matter. Its very easy for people to look at Trump as a dirty tax dodger, and it doesn't amount to a hill of beans for him to claim "you all do it too."

Yep, exactly. Theoretically, El Mac is right that Trump is just doing what most every taxpayer does, using the laws in a way that allows him to minimize the amount of taxes he pays. But that's the analytical take on it, which isn't how people will see it. It comes across like they're taking advantage of the rest of us because they can afford lawyers and accountants to game the system in ways the average schlub can't.

Sometimes, the excuse "I followed the law" simply doesn't pass muster, and when people are forking over 15% of their pay in income taxes, they don't like hearing that a billionaire is paying less. Perhaps you have a duty to pay your fair share in taxes even if the law doesn't require you to, and who's to say that isn't a valid perspective? Trump tries to spin it like he has a fiduciary duty to pay the lowest possible tax rate, but that's total BS because this is his personal tax return, his company has nothing to do with it.

 

[El_Machinae]

And if he's leveraged 9:1, he allowed a myraid of other investors to lose another 8 billion they can claim against future taxes!

 

[Gori the Grey]

I think the right line for Hillary is to say, "Yes, everybody tries to get as many deductions as they can. But our tax laws are written in such a way as to give the very rich many, many loopholes that ordinary citizens can't use and that get the super-wealthy out of paying their fair share of the costs of running this nation. There are so many loopholes that some extremely rich people can exploit the to actually pay zero taxes. Zero toward veterans, zero toward the military, etc. Donald Trump is one of those people who seems to have exploited those loopholes to pay absolutely nothing in taxes.

[That's all just set up for:]

His proposed tax plan doesn't close those loopholes, and actually has provisions for wealthy people to pay even less in taxes than they presently are."

 

[Commodore]

I never said any of what you're claiming I said. It's not that anyone is being denied tax breaks, it's that regular people don't relate to a $900 million loss being carried forward for 18 years, or having accountants fill out thousands of pages of tax returns.



It takes 15 minutes to fill out and sign a return that claims the standard deduction and child/earned income credits. Claiming that people who do their taxes that way, which is most people, are going to relate to what Trump does to avoid paying income taxes is stupid.

Okay, so it was a misunderstanding then. The way you worded things, it sounded like you were claiming that people were being outright denied tax breaks by the government simply because they aren't wealthy.

But this is plainly and patently false. There are myriad exceptions, deductions, etc. that are in many cases designed to be taken advantage of by rich individuals.
The fact is that rich people have the wherewithal to avoid paying taxes that ordinary people do not. And the tax laws are structured in plenty of ways that help rich people do that.

Your links pretty much confirm what I was saying though. The average person doesn't take advantage of those breaks because they don't fit with the average person's situation. There is nothing in the law though that says you can only take advantage of them if you are rich.

 

[BvBPL]

I think the right line for Hillary is to say, "Yes, everybody tries to get as many deductions as they can. But our tax laws are written in such a way as to give the very rich many, many loopholes that ordinary citizens can't use and that get the super-wealthy out of paying their fair share of the costs of running this nation. There are so many loopholes that some extremely rich people can exploit the to actually pay zero taxes. Zero toward veterans, zero toward the military, etc. Donald Trump is one of those people who seems to have exploited those loopholes to pay absolutely nothing in taxes.

[That's all just set up for:]

His proposed tax plan doesn't close those loopholes, and actually has provisions for wealthy people to pay even less in taxes than they presently are."

Taxes are not paid on the basis of wealth, they are paid on the basis of income, ie growth. An extremely wealthy person, like Trump, could lose millions in a year and not pay taxes not because he is no longer wealthy, but because he did not make money.


Turning the discussion around on taxes to go from being about income to being about wealth is a conversation that Americans are not ready to have.

 

[metalhead]

That's the whole point though, you have tax breaks that are specifically targeted at the financial situation of really wealthy people. And Trump can claim he's just doing what the law says he can do, but has he ever lobbied before to change the tax code? Has he ever complained about these loopholes that he gets to use? Of course not. It's convenient that he's only started talking about this issue since he was outed as paying no income tax.

And you know what the saddest thing of all is? His tax plan does go after tax breaks that hedge fund guys get. You know why he only goes after it? Because those people are wealthier than him and are the same people that never let him into polite society. Sad!

Turning the discussion around on taxes to go from being about income to being about wealth is a conversation that Americans are not ready to have.

Agreed, but it's one that we desperately need to have if we want to correct the socially corrosive effects of inequality.

 

[BvBPL]

Agreed, but it's one that we desperately need to have if we want to correct the socially corrosive effects of inequality.

We will not have much luck with that as long as the Democrat establishment is torpedoing candidates on the left.

 

[Timsup2nothin]

Your links pretty much confirm what I was saying though. The average person doesn't take advantage of those breaks because they don't fit with the average person's situation. There is nothing in the law though that says you can only take advantage of them if you are rich.

Thing is, they "don't fit with the average person's situation" because the average person isn't rich. So it is accurate to say that the entire portion of the tax code under discussion is only in there "for the benefit of the rich." The law doesn't say specifically "you ordinary people can't use me," but the reality is that the law in question is knowingly crafted to be of no use to the ordinary people so the effect is the same.

Which brings us to the problem of having Trump influence changes to the tax code. His only demonstrable interest is to add more bits and pieces that will be of no use to ordinary people but will directly benefit people like himself. His only proposed plan for anything that has actually been fleshed out beyond a handful of talking points is his proposal for changing the tax code, and his changes there amount to "give the 'middle class' a nickle to get them to go along while we exempt the wealthy from taxation entirely."

 

[Lexicus]

Your links pretty much confirm what I was saying though. The average person doesn't take advantage of those breaks because they don't fit with the average person's situation. There is nothing in the law though that says you can only take advantage of them if you are rich.

Exactly what Tim said. Your point is trivial enough to be meaningless.

 

[Sommerswerd]

I think the right line for Hillary is to say, "Yes, everybody tries to get as many deductions as they can. But our tax laws are written in such a way as to give the very rich many, many loopholes that ordinary citizens can't use and that get the super-wealthy out of paying their fair share of the costs of running this nation. There are so many loopholes that some extremely rich people can exploit the to actually pay zero taxes. Zero toward veterans, zero toward the military, etc. Donald Trump is one of those people who seems to have exploited those loopholes to pay absolutely nothing in taxes.

[That's all just set up for:]

His proposed tax plan doesn't close those loopholes, and actually has provisions for wealthy people to pay even less in taxes than they presently are."

What's so ironic about this debate over the taxes, what Trump does, and why/how it matters to the electorate is that now...at long last Trump supporters (and those arguing from the position of Trump supporters) are appealing to facts and reason and equity... For literally months and months, we have been hearing about how Trump supporters know he is lying about the wall, but they don't care... cause its about the feeling... Trump's bankruptcy (pun intended) of government experience and foreign policy experience didn't matter, cause he was beating Hillary on style and how he made people feel. Trump's a showman... Trump has a lower bar in the debates... Trump's lies don't matter... on and on etc... all because the facts don't matter anywhere near as much as how people perceive things, how they feel about the situation.

But now, people are supposed to turn all analytical to give Trump the benefit of the doubt, because of facts, and reason and cleverly fashioned lectures about moral equivalence? Please. Everyone who cares a whit about facts, figures, reason, etc... decided they weren't voting for Trump a long time ago. So when you say "everybody does it!" who are you (the royal you) trying to persuade? Hillary voters? Please... The Klan I say! To repeat,...The Klan... Klan, Klan Klan, Klannity Klan. Period. The End. Taxes don't matter to us, its already baked.

So the only ones left who might care are the feeling voters... and your complex arguments about tax carryovers are going to smash against their feelings like so many breaker waves against the rocks. All that matters to them is he is a rich tax cheat, who is gaming the system and screwing everyone over... Or he is their white knight genius businessman who is gonna blow up the system and damn the rest.

In other words... the only thing that can/will result from this is Trump losing support.