Progressives for Trump Tax Reform The media are shocked that business losses reduce tax liability.
http://www.wsj.com/articles/progressives-for-trump-tax-reform-1475446710
Who would have believed it? Donald Trump has driven his political opponents to embrace the cause of tax reform so the wealthy have fewer loopholes to exploit. That seems to be the inescapable logic of the media and Clinton campaign’s reaction to the weekend story that Mr. Trump may have used large income losses to reduce his tax payments.
The New York Times reported Saturday that it had received an anonymous gift in the mail of three pages from three of Mr. Trump’s state tax returns from 1995. The real-estate and casino magnate, who was having well-known business problems at the time, reported a loss of $916 million on those New Jersey, New York and Connecticut returns.
The Times concludes from these losses and after consulting those it called “tax experts” that the resulting tax deduction “could have allowed him to legally avoid paying any federal income taxes for up to 18 years.” Cue the synthetic shock and outrage.
Note that word “legally.” No one, not even the Clinton campaign, is claiming Mr. Trump broke any tax laws 20 years ago. Had he done so you can bet the IRS would have noticed, since the tax agency doesn’t routinely ignore tax losses that large.
The details from three pages are scant and don’t reveal the specific tax deductions that Mr. Trump might have exploited in 1995 or other years. But even average taxpayers who declare self-employment income know that business losses are deductible, often across several years. This reflects that the cycle of business investment and sales isn’t confined to a calendar tax year.
The real-estate business is also notorious for complex accounting and depreciation practices that can reduce tax liability. Developers borrow heavily, and the interest on that debt is deductible. Mr. Trump didn’t write the tax laws he was exploiting, though President Bill Clinton did have a hand in writing them since he pushed a major tax bill through Congress in 1993 with a Democratic Congress. Maybe Hillary Clinton should blame her husband and party for tolerating such rules. CONTINUE AT SITE
Comments are closed.
