Post by the Scribe on Jun 19, 2023 1:23:25 GMT
President Trump isn't the only wealthy person believed to pay little or no federal taxes. The U.S. tax code favors people who make money through investments like stocks and real estate, including a lot of people in finance, such as hedge fund titans and money managers.
Instead of paying income taxes, which rise to about 37% as a person's income goes up, investors pay the much lower long-term capital gains tax, which tops out at 20%.
This inequity in the tax code is something investment giant Warren Buffett has frequently remarked upon, noting that he pays taxes at a lower rate than his own secretary.
"Our system allows rich people, particularly real estate developers and investors, to pay far lower taxes than people that work for a living,"
Trump's tax bill also retained the very controversial carried interest provision, which allows many people who work in finance to take the money they make as investment income instead of salary. That sharply lowers their tax rate. The bill did little to address the inequities in the tax code. In fact, the corporate tax cuts included in the 2017 bill have benefited rich people even further. The reasons stock prices have gone up is because the companies they own stock in are making more profits. The reason they're making more profits is because they're paying less taxes.
How Can President Trump Pay Less Tax Than You? A manager at McDonald's likely paid more federal income tax than President Trump did the year he took office. So how could the tax system allow someone with a lifestyle as lavish as Trump's — he owns ritzy golf courses, spends tens of thousands dollars on haircuts — to pay less tax than you or me? Trump and many real estate developers structure their companies as "pass-through" businesses, which gives them a host of tax advantages. For one, it lets them deduct interest on any loans that they have so they can reduce their taxes.
"Regular people, when they take out credit cards, for example, they pay a high interest rate. They don't get to deduct their interest. Conservatives often say that lowering taxes for businesses can help the whole economy because that creates more jobs and lifts all boats. But that isn't true.
Trump's tax returns show he paid just $750 in federal income taxes each year in 2016 and 2017 and paid nothing at all for many years before that, according to reporting from The New York Times.
The inequities in the system are dangerous and could even lead to "civil unrest. We have to change our system — because the current system is not sustainable.
www.npr.org/2020/10/08/919497813/hes-part-of-the-1-and-he-thinks-his-taxes-aren-t-high-enough
www.npr.org/2017/11/17/564936525/economist-takes-deep-dive-into-the-effects-of-slashing-corporate-taxes
Instead of paying income taxes, which rise to about 37% as a person's income goes up, investors pay the much lower long-term capital gains tax, which tops out at 20%.
This inequity in the tax code is something investment giant Warren Buffett has frequently remarked upon, noting that he pays taxes at a lower rate than his own secretary.
"Our system allows rich people, particularly real estate developers and investors, to pay far lower taxes than people that work for a living,"
Trump's tax bill also retained the very controversial carried interest provision, which allows many people who work in finance to take the money they make as investment income instead of salary. That sharply lowers their tax rate. The bill did little to address the inequities in the tax code. In fact, the corporate tax cuts included in the 2017 bill have benefited rich people even further. The reasons stock prices have gone up is because the companies they own stock in are making more profits. The reason they're making more profits is because they're paying less taxes.
How Can President Trump Pay Less Tax Than You? A manager at McDonald's likely paid more federal income tax than President Trump did the year he took office. So how could the tax system allow someone with a lifestyle as lavish as Trump's — he owns ritzy golf courses, spends tens of thousands dollars on haircuts — to pay less tax than you or me? Trump and many real estate developers structure their companies as "pass-through" businesses, which gives them a host of tax advantages. For one, it lets them deduct interest on any loans that they have so they can reduce their taxes.
"Regular people, when they take out credit cards, for example, they pay a high interest rate. They don't get to deduct their interest. Conservatives often say that lowering taxes for businesses can help the whole economy because that creates more jobs and lifts all boats. But that isn't true.
Trump's tax returns show he paid just $750 in federal income taxes each year in 2016 and 2017 and paid nothing at all for many years before that, according to reporting from The New York Times.
The inequities in the system are dangerous and could even lead to "civil unrest. We have to change our system — because the current system is not sustainable.
www.npr.org/2020/10/08/919497813/hes-part-of-the-1-and-he-thinks-his-taxes-aren-t-high-enough
www.npr.org/2017/11/17/564936525/economist-takes-deep-dive-into-the-effects-of-slashing-corporate-taxes