7 ms·

I honestly don't understand why “tax avoidance” is meant to sound so naughty. Almost everyone avoids taxes, almost every time they might be subject to a tax; so

I honestly don't understand why “tax avoidance” is meant to sound so naughty. Almost everyone avoids taxes, almost every time they might be subject to a tax; some people are just better at it. When you fail to collect taxes from somebody who is following the law, that is a matter for your tax code, not a moral failing of the filer.

yokaze 6y ago
Quite a different thing though if you are head of government which is supposed to collect taxes from people like you, and you see no need to change that.
- microcolonel 6y ago
  > Quite a different thing though if you are head of government which is supposed to collect taxes from people like you, and you see no need to change that. His predecessors/competitors talk a big game, but they were in office for eight years; take a lucky guess whether it got easier or harder, under the Obama-Biden administration, for people in Donald Trump's business to deduct and reclassify almost all of their taxable transfers and incomes. If there's an improper or unjustifiable deduction in these filings, then complain about that. Nobody has any obligation, and essentially nobody has any private reason, to pay taxes that they do not owe. If you think they should owe taxes, then complain that they don't owe them, not that they won't pay what they don't owe.
  - eli_gottlieb 6y ago
    As I recall, the Republican Congress actually cut funding to the IRS for tax enforcement during Obama's second term, so we actually don't know who's committing tax fraud. The audits just aren't being done.
_jahh 6y ago
no the tax system is set up to enable more avoidance the greater the sum.
maxlybbert 6y ago
Judge Learned Hand (not the Supreme Court, but often quoted; I'm sure partly for the name): "Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes" (Gregory v. Helvering, 1934) "Over and over again courts have said that there is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions" (Commissioner v. Newman, 1947). People can lower their taxes by buying alternative fuel vehicles, renovating historic properties, donating to charities, etc. Those laws are meant to encourage that behavior. But somebody using them to lower their taxes is engaged in tax avoidance. Is that wrong? Many states have business tax laws that aren't as noble-minded but are meant to encourage businesses to hire people (e.g., no income tax) or operate from those states (e.g., favorable treatment of inventory). Is it wrong to take advantage of those tax laws? In my opinion, the alternative minimum tax ( https://www.irs.gov/taxtopics/tc556 https://www.irs.gov/taxtopics/tc556 ) is proof that the United States has given up on creating a system where tax deductions and tax credits always give a reasonable outcome.
- dathanb82 6y ago
  I’d be interested in better understanding why Trump didn’t owe more under AM, since most regular deductions don’t apply in that case.
  - microcolonel 6y ago
    Upon reading the story again, I realize they literally tell you he paid over four million dollars despite only owing about 1500 bucks. I don't know why people are so upset when he literally paid 2000x more tax than he owed.
  - maxlybbert 6y ago
    Exactly. I think there’s something being left out of the story.
- 6y ago
phobosanomaly 6y ago
As a normal American citizen, I often overpay taxes and then collect the amount I overpaid in my return. I certainty don't cook up elaborate schemes to avoid paying taxes. Does that make me stupid? I consider it a moral responsibility to pay back the community college and state university system, as well as the state and country that gave me access to the infrastructure and opportunity to earn that taxable income.
- apta 6y ago
  > I certainty don't cook up elaborate schemes to avoid paying taxes. Does that make me stupid? Tax avoidance is legal, and if you're overpaying, it means you're giving the government money which you could have used in the meantime. I prefer to keep my money.
- maxlybbert 6y ago
  You overpay during the year, but when you file your returns, do you intentionally deduct less than you’re allowed, or intentionally skip tax credits? I personally would prefer to have the government owe me money than owe the government money, but I do my best to make sure my taxes are accurate and I’m not in the hook for any more than I truly owe. Things like the child tax credit aren’t really meant to encourage particular behavior, but others are. I have a 401(k) to save for retirement, but it also lowers my taxes (in my case, it lowers my future taxes). The tax break is meant to encourage me to get the 401(k). Am I a bad person for taking advantage of the tax break?
  - phobosanomaly 6y ago
    I'm thinking more in the category of buying a failing company in anticipation of using it's annual losses to create tax benefits. The level at which you and I are engineering this stuff is kid's play. But that's kind of the idea. If you have extensive amounts of money, you hire a team to engineer getting you out of paying your fair share, I think the average person has the right to be upset about that, since all of that profit is earned on the backs of ordinary folks. If someone wants to disagree, fair enough, but I'd be mainly interested in hearing from folks who can't afford to hire a team to engineer their way out of paying taxes.
Tagbert 6y ago
With tax avoidance on this scale, he had better hope that the records were truthful. If they were fraudulent, the this moves from tax avoidance to tax fraud. It also shows that Trump is not the fantastic businessman that he has portrayed as his public persona
- maxlybbert 6y ago
  Tax avoidance that allows somebody to pay $750 tax on multimillion dollar income should, without question, trigger the alternative minimum tax ( https://www.irs.gov/taxtopics/tc556 https://www.irs.gov/taxtopics/tc556 ). Which is more likely, (a) that Trump’s accountants are creative enough to get his personal tax bill to $750 without triggering the AMT, that the IRS hasn’t been able to successfully challenge the returns, and the tax experts the New York Times spoke with for this story didn’t comment on that fact, or (b) the Times story is missing key details?
dwild 6y ago
I put free candy on my porch, anyone can take some, someone take them all, isn't he bad for doing so? I would say kind of ;). Thing is though, tax avoidance in the level Trump would have done is another layer way crazier. Most people can't take theses candies, but he can. At one point losing that much money over that many year start to be too much.

yokaze 6y ago

Quite a different thing though if you are head of government which is supposed to collect taxes from people like you, and you see no need to change that.

microcolonel 6y ago
> Quite a different thing though if you are head of government which is supposed to collect taxes from people like you, and you see no need to change that. His predecessors/competitors talk a big game, but they were in office for eight years; take a lucky guess whether it got easier or harder, under the Obama-Biden administration, for people in Donald Trump's business to deduct and reclassify almost all of their taxable transfers and incomes. If there's an improper or unjustifiable deduction in these filings, then complain about that. Nobody has any obligation, and essentially nobody has any private reason, to pay taxes that they do not owe. If you think they should owe taxes, then complain that they don't owe them, not that they won't pay what they don't owe.
- eli_gottlieb 6y ago
  As I recall, the Republican Congress actually cut funding to the IRS for tax enforcement during Obama's second term, so we actually don't know who's committing tax fraud. The audits just aren't being done.

_jahh 6y ago

no the tax system is set up to enable more avoidance the greater the sum.

maxlybbert 6y ago

Judge Learned Hand (not the Supreme Court, but often quoted; I'm sure partly for the name): "Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes" (Gregory v. Helvering, 1934) "Over and over again courts have said that there is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions" (Commissioner v. Newman, 1947). People can lower their taxes by buying alternative fuel vehicles, renovating historic properties, donating to charities, etc. Those laws are meant to encourage that behavior. But somebody using them to lower their taxes is engaged in tax avoidance. Is that wrong? Many states have business tax laws that aren't as noble-minded but are meant to encourage businesses to hire people (e.g., no income tax) or operate from those states (e.g., favorable treatment of inventory). Is it wrong to take advantage of those tax laws? In my opinion, the alternative minimum tax ( https://www.irs.gov/taxtopics/tc556 https://www.irs.gov/taxtopics/tc556 ) is proof that the United States has given up on creating a system where tax deductions and tax credits always give a reasonable outcome.

dathanb82 6y ago
I’d be interested in better understanding why Trump didn’t owe more under AM, since most regular deductions don’t apply in that case.
- microcolonel 6y ago
  Upon reading the story again, I realize they literally tell you he paid over four million dollars despite only owing about 1500 bucks. I don't know why people are so upset when he literally paid 2000x more tax than he owed.
- maxlybbert 6y ago
  Exactly. I think there’s something being left out of the story.
6y ago

phobosanomaly 6y ago

As a normal American citizen, I often overpay taxes and then collect the amount I overpaid in my return. I certainty don't cook up elaborate schemes to avoid paying taxes. Does that make me stupid? I consider it a moral responsibility to pay back the community college and state university system, as well as the state and country that gave me access to the infrastructure and opportunity to earn that taxable income.

apta 6y ago
> I certainty don't cook up elaborate schemes to avoid paying taxes. Does that make me stupid? Tax avoidance is legal, and if you're overpaying, it means you're giving the government money which you could have used in the meantime. I prefer to keep my money.
maxlybbert 6y ago
You overpay during the year, but when you file your returns, do you intentionally deduct less than you’re allowed, or intentionally skip tax credits? I personally would prefer to have the government owe me money than owe the government money, but I do my best to make sure my taxes are accurate and I’m not in the hook for any more than I truly owe. Things like the child tax credit aren’t really meant to encourage particular behavior, but others are. I have a 401(k) to save for retirement, but it also lowers my taxes (in my case, it lowers my future taxes). The tax break is meant to encourage me to get the 401(k). Am I a bad person for taking advantage of the tax break?
- phobosanomaly 6y ago
  I'm thinking more in the category of buying a failing company in anticipation of using it's annual losses to create tax benefits. The level at which you and I are engineering this stuff is kid's play. But that's kind of the idea. If you have extensive amounts of money, you hire a team to engineer getting you out of paying your fair share, I think the average person has the right to be upset about that, since all of that profit is earned on the backs of ordinary folks. If someone wants to disagree, fair enough, but I'd be mainly interested in hearing from folks who can't afford to hire a team to engineer their way out of paying taxes.

Tagbert 6y ago

With tax avoidance on this scale, he had better hope that the records were truthful. If they were fraudulent, the this moves from tax avoidance to tax fraud. It also shows that Trump is not the fantastic businessman that he has portrayed as his public persona

maxlybbert 6y ago
Tax avoidance that allows somebody to pay $750 tax on multimillion dollar income should, without question, trigger the alternative minimum tax ( https://www.irs.gov/taxtopics/tc556 https://www.irs.gov/taxtopics/tc556 ). Which is more likely, (a) that Trump’s accountants are creative enough to get his personal tax bill to $750 without triggering the AMT, that the IRS hasn’t been able to successfully challenge the returns, and the tax experts the New York Times spoke with for this story didn’t comment on that fact, or (b) the Times story is missing key details?

dwild 6y ago

I put free candy on my porch, anyone can take some, someone take them all, isn't he bad for doing so? I would say kind of ;). Thing is though, tax avoidance in the level Trump would have done is another layer way crazier. Most people can't take theses candies, but he can. At one point losing that much money over that many year start to be too much.