NYT: Trump Taxes Report FALSE

[crazy trip + 90]

 WARNING: This article is for any intellectually honest individual who doesn’t mind challenging themselves with information that may give them a reason to think outside of their bubble. Those of you who would rather consume the paplum spoon fed to you by your nannies should skip this post entirely.

 The New York Times’ claim that President Donald Trump paid just $750 in federal income taxes in 2016 and 2017 is wrong, based on a flawed understanding of how taxes are paid.

 The figures below, drawn from the New York Times’s own analysis of Trump’s tax-return data for 2017, show that Trump paid $7,435,857 in taxes in 2017.

The Times says the tax return data show that Trump’s earnings were negative for the year, so he owned nothing in regular income taxes. But he was subject to the Alternative Minimum Tax (AMT), a parallel tax system aimed at making sure wealthy people cannot use deductions to eliminate their tax liability altogether. According to the Times, “the A.M.T. formula disallowed $45 million in losses that Mr. Trump had carried over from prior years.”

As a result, Trump was left with an AMT bill of $7,435,857, according to the Times.

There was no way for Trump to avoid this tax liability. He had to pay it down using his assets. And he did.

What confused the Times is Trump did not pay the liability with a check. He used a credit issued to him earlier by the government, a credit that can only be used to pay taxes.

That’s a lot less rare than it seems. In fact, it’s how most people pay their taxes.

For most people, tax bills get paid with credits they have already accumulated with the government through mandatory deductions from their paychecks. When they overpay their taxes through withholding, they can apply for a refund for the overpayment. That can be a bank deposit from the government or it can be rolled forward as a credit to apply to future taxes.

The main take away here is that tax bills are typically not paid with cash at the time of filing. They are paid with credits earned because the money was withheld earlier.

But over-withholding is not the only way to earn tax credits. In fact, there are a myriad of ways that people can earn tax credits issued by the federal government that can be used to pay tax bills. The government considers these expenditures because as far as government finances are concerned, a tax credit is the same as cash. It is something that can be used to pay taxes.

These are assets — and practically cash equivalents. Often they can be bought and sold, with various restrictions. When a company has tax credits on its balance sheet, these are considered part of its value. They are not quite valued the same as cash in a bank account but nearly so.

It turns out that Trump has a big tax credit issued to him by the U.S. government with the intention that it would someday be used to pay his taxes.

From the Times:

But tax laws gave him one more line on which to reduce the A.M.T. Mr. Trump had $22.7 million in General Business Credit, much of it carried forward from prior years, that he could apply. The credit is a smorgasbord of tax incentives and givebacks to business owners, and in Mr. Trump’s case they ranged from credits of $322,926 for Social Security and Medicare taxes paid on employee tips to at least $1.5 million related to rehabilitating the Old Post Office in Washington.

The business credit cannot be used to get a refund; it can only be applied against taxes owed. Mr. Trump had more than enough to cancel out his $7,435,857 tax bill. But on the Form 3800 for the General Business Credit, his accountants subtracted $750 from his allowable credit. Why they did that is not clear. But the result was a total federal income tax liability of $750.

In other words, Trump paid the full amount of his taxes but spent $7,435,107 of his tax credit and $750 of cash. Both cash and the credit are government liabilities that the U.S. government accepts as payment for taxes. Paying the credit is not the equivalent of not paying taxes.

More simply: Trump used a government-created tax asset to pay his taxes. The payment reduced his worth by the equivalent of the credit.

To put it slightly differently, when the government wants to provision itself with resources or convince someone to perform work it wants done, it has a choice. It can pay in cash or with a credit. Both of these things can be used to pay taxes, which is one of the reasons nearly every one accepts them as payment. Trump paid most of his bill with the credit and a small part in cash. But he paid all of his $7.4 million tax bill. To the penny.

To argue that this does not count as paying millions of dollars in taxes is equivalent to arguing that every single one of us who does not have to cut a check on tax day, because we built up a credit through withholding, is not paying our taxes.

The argument would also badly hurt the U.S. government’s ability to coax households and businesses into undertaking projects for the public good in exchange for credits. Instead, the government would be forced to make cash payments because only these would count as tax payments.

The Times, in its eagerness to create a scandal around Trump’s tax records, has simply gotten the most well-known part of its story wrong.

 

[Hotone + 412]

1 hour ago, crazy trip said:

 WARNING: This article is for any intellectually honest individual who doesn’t mind challenging themselves with information that may give them a reason to think outside of their bubble. Those of you who would rather consume the paplum spoon fed to you by your nannies should skip this post entirely.

 The New York Times’ claim that President Donald Trump paid just $750 in federal income taxes in 2016 and 2017 is wrong, based on a flawed understanding of how taxes are paid.

 The figures below, drawn from the New York Times’s own analysis of Trump’s tax-return data for 2017, show that Trump paid $7,435,857 in taxes in 2017.

The Times says the tax return data show that Trump’s earnings were negative for the year, so he owned nothing in regular income taxes. But he was subject to the Alternative Minimum Tax (AMT), a parallel tax system aimed at making sure wealthy people cannot use deductions to eliminate their tax liability altogether. According to the Times, “the A.M.T. formula disallowed $45 million in losses that Mr. Trump had carried over from prior years.”

As a result, Trump was left with an AMT bill of $7,435,857, according to the Times.

There was no way for Trump to avoid this tax liability. He had to pay it down using his assets. And he did.

What confused the Times is Trump did not pay the liability with a check. He used a credit issued to him earlier by the government, a credit that can only be used to pay taxes.

That’s a lot less rare than it seems. In fact, it’s how most people pay their taxes.

For most people, tax bills get paid with credits they have already accumulated with the government through mandatory deductions from their paychecks. When they overpay their taxes through withholding, they can apply for a refund for the overpayment. That can be a bank deposit from the government or it can be rolled forward as a credit to apply to future taxes.

The main take away here is that tax bills are typically not paid with cash at the time of filing. They are paid with credits earned because the money was withheld earlier.

But over-withholding is not the only way to earn tax credits. In fact, there are a myriad of ways that people can earn tax credits issued by the federal government that can be used to pay tax bills. The government considers these expenditures because as far as government finances are concerned, a tax credit is the same as cash. It is something that can be used to pay taxes.

These are assets — and practically cash equivalents. Often they can be bought and sold, with various restrictions. When a company has tax credits on its balance sheet, these are considered part of its value. They are not quite valued the same as cash in a bank account but nearly so.

It turns out that Trump has a big tax credit issued to him by the U.S. government with the intention that it would someday be used to pay his taxes.

From the Times:

But tax laws gave him one more line on which to reduce the A.M.T. Mr. Trump had $22.7 million in General Business Credit, much of it carried forward from prior years, that he could apply. The credit is a smorgasbord of tax incentives and givebacks to business owners, and in Mr. Trump’s case they ranged from credits of $322,926 for Social Security and Medicare taxes paid on employee tips to at least $1.5 million related to rehabilitating the Old Post Office in Washington.

The business credit cannot be used to get a refund; it can only be applied against taxes owed. Mr. Trump had more than enough to cancel out his $7,435,857 tax bill. But on the Form 3800 for the General Business Credit, his accountants subtracted $750 from his allowable credit. Why they did that is not clear. But the result was a total federal income tax liability of $750.

In other words, Trump paid the full amount of his taxes but spent $7,435,107 of his tax credit and $750 of cash. Both cash and the credit are government liabilities that the U.S. government accepts as payment for taxes. Paying the credit is not the equivalent of not paying taxes.

More simply: Trump used a government-created tax asset to pay his taxes. The payment reduced his worth by the equivalent of the credit.

To put it slightly differently, when the government wants to provision itself with resources or convince someone to perform work it wants done, it has a choice. It can pay in cash or with a credit. Both of these things can be used to pay taxes, which is one of the reasons nearly every one accepts them as payment. Trump paid most of his bill with the credit and a small part in cash. But he paid all of his $7.4 million tax bill. To the penny.

To argue that this does not count as paying millions of dollars in taxes is equivalent to arguing that every single one of us who does not have to cut a check on tax day, because we built up a credit through withholding, is not paying our taxes.

The argument would also badly hurt the U.S. government’s ability to coax households and businesses into undertaking projects for the public good in exchange for credits. Instead, the government would be forced to make cash payments because only these would count as tax payments.

The Times, in its eagerness to create a scandal around Trump’s tax records, has simply gotten the most well-known part of its story wrong.

 

Stop messing around!  When you let billionaires get richer and pay no taxes, you don't have any funds to tackle social ills.  This ends up being the result all over America.  

Mind you, this is not even skid row.

Edited October 4, 2020 by Hotone

[crazy trip + 90]

Homelessness is a real problem in the USA. 
 Would you care to comment on the factual evidence refuting the NYT claim that President Trump paid only $750.00 in Federal Income Taxes in tax year 16/17??

[Hotone + 412]

45 minutes ago, crazy trip said:

Homelessness is a real problem in the USA. 
 Would you care to comment on the factual evidence refuting the NYT claim that President Trump paid only $750.00 in Federal Income Taxes in tax year 16/17??

I have not had any opinions about Trump's tax returns before this.  I have the opinion that he is a showman, a crook, and a con artist - but that is OK.  In my country, Malaysia, the leader has always been the biggest crook, so maybe it just goes with the territory.

The leaked tax returns are just pure conjecture at this time.  Neither the courts nor Trump has released them.  When they are actually published and official, I am sure that many advocacy groups will explain and make the facts clear to everybody.

Edited October 4, 2020 by Hotone

[crazy trip + 90]

I tend to agree with you regarding politicians and their self serving ways, usually to the detriment of the rank and file that they claim to serve. Trump is definitely a showman, I can’t say that I’ve seen factual evidence of crookness as much as we have heard from the media that he is.

IMO Trump has taken on both national and international special interest groups and governments for the good of all.  The alternative being China as the Worlds superpower or Antifa/BLM type groups running the show which should scare anybody regardless of their opinion of Trump or America.

[Ward Smith + 6,615]

9 hours ago, Hotone said:

Stop messing around!  When you let billionaires get richer and pay no taxes, you don't have any funds to tackle social ills.  This ends up being the result all over America.  

Mind you, this is not even skid row.

This has nothing to do with billionaires or taxes. You realize how much Venice Beach is charging in property taxes while they aren't doing the job they're paid to do?? ? They're ignoring the squalor and they're refusing to evict these people who aren't paying taxes, aren't contributing to society, but are robbing the local stores, stealing bicycles, doing drugs etc. The bar in the video is paying $10,000/month for rent on the sidewalk, are those homeless paying one red cent to be a blight on the sidewalk? Governments charge taxes to pay for cleaning up the streets, Kalifornistan hasn't held their inept government to account, and this is what you get. I'm confident Demoncrat politicians are more than happy to harvest votes from those same homeless, who by now outnumber the tax paying citizens in that neighborhood. 

And just to further underscore your ignorance, the Federal taxes referenced in the NYT article have nothing to do with this kind of local problem. In point of fact, Trump pays hundreds of millions in taxes on his properties and all of that money goes to local, not Federal governments. It is up to those local governments to fix these problems. Santa Monica obviously knows how to do it, Los Angeles obviously won't, because these homeless are their constituents, whether they really vote or not, their ballots go to the incumbent criminals running those jurisdictions (into the ground). You can pretend moral superiority from Malaysia all you want. I ain't buying it, that place is a cesspool. Los Angeles politicians wants to go down to your level, because evil. 

[ronwagn + 6,290]

Hotone, You might want to be more careful about criticizing the government leaders in Malaysia since you live there. Maybe you know better?

[Dan Warnick + 6,100]

2 hours ago, ronwagn said:

Hotone, You might want to be more careful about criticizing the government leaders in Malaysia since you live there. Maybe you know better?

He'd better.  I suppose one of the attractions of a Western forum is the ability to speak freely.  That's fine and I think it's safe to say we all welcome the participation, within reason, but one should not forget where one is physically and who might be (is) reading along and monitoring.

[Bob D + 562]

So this Trump tax story is in fact FAKE NEWS.  

[Dan Warnick + 6,100]

16 hours ago, Dan Warnick said:

He'd better.  I suppose one of the attractions of a Western forum is the ability to speak freely.  That's fine and I think it's safe to say we all welcome the participation, within reason, but one should not forget where one is physically and who might be (is) reading along and monitoring.

Well, I couldn't get Hotone's eyeroll reaction by quoting my own comment 🙄

Anyway, Malaysia: New Government Backslides on Free Speech - Abusive Investigations of Critics Rising

(Excerpt)

(Bangkok, June 10, 2020) – Malaysia’s new administration is increasingly using abusive laws to investigate and prosecute speech critical of the government, Human Rights Watch said today. Since the Perikatan Nasional coalition took over the federal government in early March 2020, the authorities have sharply heightened investigations of individuals under broadly worded laws that violate the right to freedom of expression.

“Like flicking a light switch, Malaysian authorities have returned to rights-abusing practices of the past, calling journalists, activists, and opposition figures into police stations to be questioned about their writing and social media posts,” said Phil Robertson, deputy Asia director at Human Rights Watch. “The government should stop trying to return to the bad old days and revise the laws to meet international standards.” 

[shadowkin + 584]

On 10/4/2020 at 6:52 AM, Hotone said:

Stop messing around!  When you let billionaires get richer and pay no taxes, you don't have any funds to tackle social ills.  This ends up being the result all over America.  

Mind you, this is not even skid row.

You contradict yourself. California heavily taxes millionaires never mind billionaires yet we have dozens of Venice Beaches in all our major cities and it's spreading to medium sized cities. New York seems to have similar issues. The problem isn't that we're not taxing enough it's that the taxes are squandered by politicians and distributed to their constituencies so they can get re-elected.

[Tomasz + 1,608]

Of course, the US president should probably pay the tax earlier as a businessman.

Well but we live in the times when it turned out in Panama Papers that the British Queen was indirectly involved in the removal of property from Great Britain, so there is no longer any lust for glory.

Probably, however, all over the world it is actually  middle class who burden the taxes and employees of the public sector who are unable to hide their income.

Because when you're rich enough, great tax lawyers are always cheaper than paying taxes.

Not that I would specifically condemn this behavior, if only because I am also a lawyer  and probably if I had the opportunity like Trump, I would do exactly the same.

[Bob D + 562]

6 minutes ago, Tomasz said:

Of course, the US president should probably pay the tax earlier as a businessman.

Well but we live in the times when it turned out in Panama Papers that the British Queen was indirectly involved in the removal of property from Great Britain, so there is no longer any lust for glory.

Probably, however, all over the world it is actually  middle class who burden the taxes and employees of the public sector who are unable to hide their income.

Because when you're rich enough, great tax lawyers are always cheaper than paying taxes.

Not that I would specifically condemn this behavior, if only because I am also a lawyer  and probably if I had the opportunity like Trump, I would do exactly the same.

With all due respect Tomasz ... it doesn't take a great lawyer (or tax accountant) to apply tax credits and prior period losses against current tax obligations.  Trump did exactly that and nothing more.

I got a $xx,xxx refund this year on $xxx,xxx income.  How did I do that??  A few morons on this site will conclude I am breaking the law.  They know nothing.  I paid income and FICA taxes on my 2019 salary and bonus all year long.  I applied losses from a sh!tty well against the taxes owed vs taxes paid and it turns out the freaking government over taxed me 2019.  Our tax burden is overly complicated to calculate and the concepts written into the tax code are intentionally confusing.  Therefore it's not a surprise when some don't get it.  It's also not a surprise that an article would be written by a political enemy intentionally misstating the concepts for the useful idiots to misconstrue.   

[Dan Warnick + 6,100]

12 minutes ago, Bob D said:

With all due respect Tomasz ... it doesn't take a great lawyer (or tax accountant) to apply tax credits and prior period losses against current tax obligations.  Trump did exactly that and nothing more.

And It's not even like Trump "did" anything with regards to his tax returns; his accountants and lawyers did.  They followed the rules and prepared the documents and he signed off on them.  In case of legal action those filing would go to court to defend their work.  That's exactly how mine are prepared and I expect my tax accountant to avail me of every available legal advantage, and I'm not anywhere near the President's league.

[Hotone + 412]

On 10/5/2020 at 8:19 AM, ronwagn said:

 

 

On 10/10/2020 at 6:19 AM, Tomasz said:

Of course, the US president should probably pay the tax earlier as a businessman.

Well but we live in the times when it turned out in Panama Papers that the British Queen was indirectly involved in the removal of property from Great Britain, so there is no longer any lust for glory.

Probably, however, all over the world it is actually  middle class who burden the taxes and employees of the public sector who are unable to hide their income.

Because when you're rich enough, great tax lawyers are always cheaper than paying taxes.

Not that I would specifically condemn this behavior, if only because I am also a lawyer  and probably if I had the opportunity like Trump, I would do exactly the same.

😂Then you shouldn't run for president

Edited October 14, 2020 by Hotone

[Ward Smith + 6,615]

On 10/9/2020 at 3:37 PM, Bob D said:

It's also not a surprise that an article would be written by a political enemy intentionally misstating the concepts for the useful idiots to misconstrue.   

^^^This^^^

[Hotone + 412]

On 10/5/2020 at 10:37 AM, Dan Warnick said:

He'd better.  I suppose one of the attractions of a Western forum is the ability to speak freely.  That's fine and I think it's safe to say we all welcome the participation, within reason, but one should not forget where one is physically and who might be (is) reading along and monitoring.

On 10/5/2020 at 8:19 AM, ronwagn said:

Hotone, You might want to be more careful about criticizing the government leaders in Malaysia since you live there. Maybe you know better?

While we might not have free speech, Malaysia is still governed by the rule of law.  We have the sedition act which is a legacy from the British colonial era.  It was used by the British to curb revolt against their rule, but since independence, it has been used to curb free speech.  However, it is not used spuriously, because it is still a legal process, and will attract a lot of attention.

Nevertheless, we have very little censorship of the internet.  Calling our leaders crooks is not a crime because it's true.  Our ex-PM has been convicted and sentenced to 12 years jail as well as a fine for money laundering.  He is still on trial for other crimes involving larger sums of money.

https://www.theedgemarkets.com/article/najib-back-court-first-time-convicted-felon

If he is unhappy and wants to come after me for my comments, I may then have to offer my apologies through one of his brothers who is a former classmate.

As for participating in a Western forum, why not.  I have been a permanent resident of a couple of Western countries and probably still retain the status for one.  I just haven't been back since 2001.

Edited October 14, 2020 by Hotone