Clintons, Trumps both practice Tax Avoidance The real story here is how awful our tax system is.

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Oct 3, 2016 No Comments ›› admin

By Lynn Woolley

If the latest Trump controversy over his taxes shows us anything at all – it’s that politicians at the highest level are a breed apart from the rest of us. Trump did nothing wrong – he had a bad year and lost money, and he simply used the tax laws to his advantage.

You and I cannot relate. 

The New York Times works against Donald Trump (Photo illustration: Gawker)

The New York Times works against Donald Trump (Photo illustration: Gawker)

Trump is dealing with millions and often billions of dollars. Our Congress has, for years, inserted loopholes into the Tax Code to help the wealthiest one percent. That’s what lobbyists do for them. Congress takes the bribes in whatever form they are offered, and willingly complies.

The Clintons also take advantage of the same laws – and you can bet their accountants are as good as Trump’s in avoiding taxes. We all attempt to avoid taxes – but you and I are on a different level than super-rich politicians. It is only media bias that makes Trump front-page news.

The cost of tax compliance & avoidance & evasion.

There is a difference in these three things. Compliance means dealing with all the reams of regulations in the IRS code. This is from the Tax Foundation in an article from Joshua D. McCaherty:

Tax filers face the task of understanding IRS instructions in order to comply with paying taxes. According to the IRS, filing taxes will take taxpayers an average of 8 hours and cost $120 for each nonbusiness return. An IRS publication shows nearly 169 million individual tax returns (including all individual tax forms and estimated tax forms) were filed in 2012, costing over $20 billion in compliance costs. This is not the cost of actually paying taxes, but only the cost of filing.

Did you get that? $20 billion is the cost of filing. So if we abolished the Tax Code, $20 billion annually would be injected into the economy – less the cost of complying with whatever replaces the code.

And here is a brief excerpt from The Atlantic on the cost to the government of tax avoidance – the practice of finding legal ways to get out of paying taxes:

Large corporations such as Pfizer, Walmart, IBM, and Apple have stashed billions of dollars via more than 1,500 subsidiaries in tax havens like the British Virgin Islands and the Cayman Islands, according to the report, which analyzed the companies’ Securities and Exchange Commission filings. Though this practice isn’t illegal, keeping profits offshore lowers the taxes owed in the United States, and this ends up costing the U.S. government about $111 billion each year in lost revenue, by Oxfam’s calculations.

(Note that the Clintons are accused of dodging taxes by establishing “shell companies.” You just
won’t see that story in the Times.)

And then, there is outright (and illegal) tax evasion as outlined in Fortune Magazine:

According to new estimates issued Thursday by the Internal Revenue Service, tax evasion is a pretty lucrative business, costing the federal government on average $458 billion per year between 2008 through 2010. That’s a slight increase from the previous estimate, issued in 2006, of $450 billion. The feds call that dollar figure the “tax gap” and say the rise is the result of better measurement rather than Americans engaging in more tax evasion.

Face it; the system is broken. 

By contrast, Hillary Clinton gets favorable coverage in the Times. (Photo illustration: Salon)

By contrast, Hillary Clinton gets favorable coverage in the Times. (Photo illustration: Salon)

What Trump did – AND the Clintons AND the New York Times – is to use legal means of avoiding taxes. He did it because he can. The Clintons are able to donate to their own private charity—the Clinton Foundation – and they do it because they can. Warren Buffet uses passive income to have a lower tax rate than his secretary – because he can.

We all practice tax avoidance, but millionaires like the Clintons and billionaires like Trump do it on a larger scale. Trump is right to say he was smart to do it. But how smart is the country to have such an awful system of taxation? For years, we’ve promoted the FAIR TAX – a much more sane way of collecting money for the government that eliminates the Tax Code.

You can bet that neither Hillary nor Trump would kill the Tax Code.

A typical Trump front-page in the Times

A typical Trump front-page in the Times

The fact is that the Tax Code works for the super rich far better than it works for those of us with normal incomes. Trump was able to use his $916 million business loss in 1995 to potentially avoid taxes for up to 18 years. Hillary is able to launder money through the Clinton Foundation. The New York Times, the publication that slapped the Trump tax avoidance on Page 1, paid no taxes in 2014 according to published reports.

Why would Hillary Clinton or Donald Trump want a change? If the NYT is correct, Trump avoided taxes for years. If the website Zero Hedge is right, Hillary used the same technique in 2015. Trump lives in luxury, as do the Clintons. Even daughter Chelsea is ensconced in a $9.5 million dollar, swank New York apartment.

Life is good for political elites and they have no reason to change it. Such is the hypocrisy of Hillary Clinton.

lynn@BeLogical.com

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