October 03, 2016 | Graham

Trump’s tax losses are not tax avoidance

If the Donald wants to come back from his tax debacle he will admit to having really screwed up in the ’90s. He will tell people he isn’t proud of his mistakes, but he has learned from them, and he will admit to them.

He will say how grateful he is that America is a country which allows you to start all over again, and that Americans are all the better for that, as is he.

His supporters (not him) will point out that Abraham Lincoln once went bankrupt.

Donald Trump really did screw-up. This not a secret and is well-documented. He lost a lot of money. According to his tax returns, in 1995 the amount was USD $916 million.

That means that until he earns another $916 million he will not have to pay tax.

This is not avoidance, it is how the tax system works – you are allowed to subtract your expenses from your income. If you couldn’t then no business would be able to make money. We would all have to be employees of the state.

Indeed, given the scale of these losses it is likely he paid more in taxes in the lead-up to its declaration than he should have.

If he had gone bankrupt, then those losses would not have been available to him. But his creditors were prepared to give him space in return for partial payments, or time payments, and they did not put him under.

So they were available to him.

There is no shame in that and nothing to hide.

If you are going to target this you might as well complain because donations made to the Clinton Foundation are tax deductible.

Do people make donations to the Clinton Foundation to get a tax deduction? Yes, they definitely do, depending on the what and how of your giving. So donors will give money to the foundation as part of their tax planning, and the foundation will get money that other non-deductible uses won’t. That makes sense.

Did Donald Trump lose money to get a tax deduction? No he most definitely didn’t. That makes no sense at all. He didn’t make the loss for tax planning reasons, he made it because he made a series of collosal mistakes.

Trump could win the election by pointing out that when he makes a mistake, he admits to it. And when he makes one, he learns from it. Unlike his opponent.

And he will do that, unless he is really just like his opponent, and the outsider schtick has been just that – schtick.



Posted by Graham at 8:29 pm | Comments (3) |