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Donald Trump Acknowledges Not Paying Federal Income Taxes for Years

trouble13 said:
I've heard that argument before but i dont see how its true. A sales tax taxes disposable income and the rich have far more dispoable income than the poor.

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It's simple. The wealthy save a great deal of their income. Here's one calculation.

savings-rates-by-wealth-class.png


So the top 1% save 40% of their income on average. The top 1/10th of 1% might save 80-90% or higher. So do the math. If the consumption tax is 20%, and the bottom 90% spend all their income on average, they'll pay a tax equal to 20% of income. The top 1% will pay only 12% of income in taxes (60% of income is consumed X 20% = 12% of income). The top 1/10th of 1% perhaps only 2%-4% of income.
 
trouble13 said:
This is one reason that i think we should abolish the income tax system and replace it with a consumption tax. It eliminates tax loopholes.
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I have an even better idea.

Abolish the income tax and replace it with NOTHING.

This would completely eliminate ALL tax loopholes,
 
Lutherf said:
I didn't ask for a dictionary definition. I asked for an explanation of what it is and how it works. Your concern seems to be that it creates a loss for real estate developers. I'd appreciate an explanation of how that loss is generated and how it saves the real estate investor from paying tax.
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It may not generate a loss, but real estate does tend to increase in value over time, not depreciate. So if your rental building goes up in value by 3% per year but for tax purposes you assume it declines in value by 3% a year, that is a good deal. And for the actual depreciation in value - the wear and tear, you get further deductions for maintenance and repairs, the costs of that new roof, or repainting it, or fixing the plumbing, or the HVAC, which you've already deducted in reality through depreciation deductions.
 
apdst said:
No, it's real property. Real estate is the dirt it sits on.
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That's not true. Real estate refers to the land and the building that sits on it. The land isn't depreciable but the building is.

real estate noun
Definition of real estate
1: property in buildings and land
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How funny is it that Trump voters who make between $50,000 - $80,000 are the people funding things like our military.
 
JasperL said:
It may not generate a loss, but real estate does tend to increase in value over time, not depreciate. So if your rental building goes up in value by 3% per year but for tax purposes you assume it declines in value by 3% a year, that is a good deal. And for the actual depreciation in value - the wear and tear, you get further deductions for maintenance and repairs, the costs of that new roof, or repainting it, or fixing the plumbing, or the HVAC, which you've already deducted in reality through depreciation deductions.
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Is that what you believe depreciation (for tax purposes) reflects? Are you suggesting that tax depreciation is a "write off" for a decrease in a given asset's value?
 
Lutherf said:
Is that what you believe depreciation (for tax purposes) reflects? Are you suggesting that tax depreciation is a "write off" for a decrease in a given asset's value?
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I made my case, and I don't know what point you're trying to make with your questions. If it's not to reflect a diminution in the value of an asset, why do we allow a tax deduction for it? Why do we not allow depreciation for land? Or diamonds? Or gold?

And for assets other than real estate there is often a decrease in an asset's value. Cars DO depreciate in value over time, so does equipment, which gets outdated, and wears out, as does paving, office equipment such as computers and printers, etc. What doesn't is most buildings/housing.
 
apdst said:
Real Estate vs. Real Property: What's the Difference?
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Your source agrees with me. Thanks for confirming it! :peace

From your link:

Real Estate
Real estate is simply a piece of land plus any natural or artificial—man-made—improvements that are attached or have been added. Natural attachments are part of the land and include trees, water, valuable mineral deposits, and oil. Artificial improvements include buildings, sidewalks, and fences. Real estate can be split into two broad categories: residential and commercial.
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mike2810 said:
But is misrepresentation to believe the "wealth" from tax laws has happened only during the Trump admistration.
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No, just that Trump tax cuts made it better for his businesses specifically and not so much for the rest. That's all.

Condor060 said:
So you made 11 post about real estate but nothing in there is exclusive for the rich.
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There is nothing exclusive of the rich there... As I said, noone claimed that. Having said that, let me think... who tends to own commercial real estate and passthrough entities? Who has billions invested in those... Oh yeah, that guy called Trump.

Condor060 said:
Businesses are getting better tax breaks which in turn drives job numbers and economic numbers.
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Or simply the buybacks which is what they've been mostly doing with the newfound money.

Trump is mostly interested in making money for Trump Org. So noone is surprised that the most corrupt President in history passed tax cuts that fine tuned the tax code to benefit industries that HE is involved in but NOT nearly as much other sectors of the economy.
 
JasperL said:
I made my case, and I don't know what point you're trying to make with your questions. If it's not to reflect a diminution in the value of an asset, why do we allow a tax deduction for it? Why do we not allow depreciation for land? Or diamonds? Or gold?

And for assets other than real estate there is often a decrease in an asset's value. Cars DO depreciate in value over time, so does equipment, which gets outdated, and wears out, as does paving, office equipment such as computers and printers, etc. What doesn't is most buildings/housing.
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When you place real estate into service as a business asset you don't simply deduct the value of that asset from your income. You are required to take the expense (along with the cost of various improvements) over a certain period of time. For example, if you purchase an office building for $1,000,000 you don't show a $1M expense on your tax return. You show "depreciation" of $32,000 because you have to write the building off over 31 years. Not only that, but when you sell the building you need to add back the amount of depreciation you took over the years as part of the gain on the sale.

Depreciation isn't some kind of freebie as the OP suggested..
 
trouble13 said:
What burdens all tax payers more than anything is the abusive overspending the government does. If they would reduce that then the tax burden would be reduced. Thats a conversation nobody on the left wants to have unless its directed at the military and even then they want to reallocate that spending and increase overall spending more on things they want. This form of gluttony is the reason why when i do reach the age retirement there may be no SS left for me. Sent from my SM-G965U using Tapatalk
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The only thing that could possibly be done with SS is lower what would be the payment and/or increase the minimum ages to collect. Even that would be tough. They can't do away with it. Regardless of private retirement and savings, most Americans would be affected by lowering SS payments. But a related point is do away with the maximum income for paying SS taxes, being the FICA withholding (ha! You don't get any back) shown on your paycheck stub.
 
Lutherf said:
When you place real estate into service as a business asset you don't simply deduct the value of that asset from your income. You are required to take the expense (along with the cost of various improvements) over a certain period of time. For example, if you purchase an office building for $1,000,000 you don't show a $1M expense on your tax return. You show "depreciation" of $32,000 because you have to write the building off over 31 years. Not only that, but when you sell the building you need to add back the amount of depreciation you took over the years as part of the gain on the sale.
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I know all that because I do taxes for a living and have a MAcc, concentration in tax. So I know, for example, that the "add back" is to determine the character of the gain, not the amount. And I know about 1031s, etc.

But the point is in most cases, that $1 million office building is worth MORE than $1 million when you go to sell it. It does not depreciate in value - it APPRECIATES in value. That's not always true, like it's not always true land always goes up and never down. But it's the typical case, and we don't allow "depreciation" deductions for the land under that building because it's not presumed, as the tax code does for structures, that it depreciates in value over time.

Just for example, I'd love it if I could buy gold and take phantom deductions that assume gold bars depreciate over time. It would make investing in gold far more attractive given that over the long term gold appreciates in value not depreciates.

Depreciation isn't some kind of freebie as the OP suggested..
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If the building increases in value, depreciation is in fact a tax 'freebie.' The taxpayer is claiming deductions for an asset that is increasing in value.
 
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JasperL said:
I know all that because I do taxes for a living and have a MAcc, concentration in tax. So I know, for example, that the "add back" is to determine the character of the gain, not the amount. And I know about 1031s, etc.

But the point is in most cases, that $1 million office building is worth MORE than $1 million when you go to sell it. It does not depreciate in value - it APPRECIATES in value. That's not always true, like it's not always true land always goes up and never down. But it's the typical case, and we don't allow "depreciation" deductions for the land under that building because it's not presumed, as the tax code does for structures, that it depreciates in value over time.

Just for example, I'd love it if I could buy gold and take phantom deductions that assume gold bars depreciate over time. It would make investing in gold far more attractive given that over the long term gold appreciates in value not depreciates.



If the building increases in value, depreciation is in fact a tax 'freebie.' The taxpayer is claiming deductions for an asset that is increasing in value.
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What does the appreciation have to do with anything? If you buy it for a million dollars and sell it for two million you have a million dollar gain PLUS recapture.
 
Oborosen said:
So other then being another anti-Trump masturbatory thread. This really doesn't add anything to any sort of dialogue.

Trump was still following the law apparently and you people are still all too eager for a reason to cry about nothing, once again.
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So, other than being another anti-anti-Trump comment which confuses valid criticism with whining and thus is a whine unto itself, in case you haven't noticed, FYI, the name of this forum is "debate politics". Tax policy falls squarely within parameters subject for debate. The OP provides items worthy of debate which is focused on tax policy more than anything else, the items of which none were about how Trump did not follow the law, but, in fact, acknowledged the opposite.

But, now that you mentioned it, as a recent NYT exposé revealed, Trump, based on the evidence NYT dug up, he may have defrauded the IRS of some 400 million big ones, but the OP does not address that at all.

Next time you write a rebuttal to an OP, engage your brain before you hit the submit button.
 
Obscurity said:
1. There are more poor people.
2. Poor people and rich people need similar things.
3. Rich people, for example, don't buy 100 pillows just because they're rich.
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Rich people spend more money than poor people and it eliminates their ability to write those purchases off.

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Lutherf said:
What does the appreciation have to do with anything? If you buy it for a million dollars and sell it for two million you have a million dollar gain PLUS recapture.
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OK, then why don't we get to depreciate land?

And in the meantime, while that building is APPRECIATING in value, you might have taken a $million in depreciation deductions, and saved $300k in taxes, which you can invest and earn tax free, interest free, until you sell it. And if you roll the proceeds into a new property in a 1031 exchange, you can defer the gain even longer, and continue taking more depreciation deductions, all the while your real estate is APPRECIATING in value!
 
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SonOfDaedalus said:
They consume a greater percentage of their income. If I'm poor a greater percentage of my income goes to food and basic necessities. If you're rich a tiny fraction of your income is needed to feed yourself and take care of yourself.

And for the very rich, they have so much money it's impossible for them to spend all their money.
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Income is not relevant with a consumption tax. Your taxed on your spending not your income. The wealthy spend much more than the poor do.

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Mycroft said:
Don't worry about it. Congress isn't going to change it, either.
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If dems control all three branches for sufficient time ( and eliminate the filibuster), they will. The last time they had control of all three branches, was for a period of a couple of months, and passing the ACA took all the oxygen during that small window.
 
JasperL said:
OK, then why don't we get to depreciate land?
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Because land, unlike man made structures, has an unlimited useful life.

Keep this in mind, while you aren't allowed to take depreciation on land you can, depending on minerals or trees on the land, take depletion which, for all practical purposes, works a lot like depreciation.
 
trouble13 said:
Income is not relevant with a consumption tax. Your taxed on your spending not your income. The wealthy spend much more than the poor do.

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The bottom line is a consumption tax is a dream come true for the top 1% and above. Compared to current law, a consumption tax as a replacement tax for the income tax will LOWER the tax burden for the very rich, and increase the tax burden on those below the 1%. So it's a transfer through the tax code from the bottom 99% to the VERY wealthiest among us. It's a reverse Robin Hood tax.

The argument for a consumption tax is that it in Europe and elsewhere those taxes fund programs that benefit the middle class and below, such as universal healthcare, family leave, disability, etc. The argument is it's fair to tax those receiving the benefits. But those are always paired with a progressive income tax.

If not, you've described a tax haven and a dream location for the ultra wealthy in this world.
 
Lutherf said:
I didn't ask for a dictionary definition. I asked for an explanation of what it is and how it works. Your concern seems to be that it creates a loss for real estate developers. I'd appreciate an explanation of how that loss is generated and how it saves the real estate investor from paying tax.
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The law exists allowing RE investment property to depreciate their property.

I do't know what the schedule is, but let's say for argument's sake it's 10 years. Theoretically, a building deteriorates and after 10 years it's worth zero.

So, spread the depreciation over a 10 year peried, allowing for deductions each year to correspond to the theoretical rate of depreciation.


But, the truth is, although structures depreciate, the actual value of the property increases. Therefore, in point of fact, the deduction is a gift to RE investment holders.

That they are gifted, it's a largess which is afforded to them, and creates a de facto world where the burden of taxation is shifted to everyone else.


Back I think it was 2005, Trump tax form showed a loss of some billion dollars or so, and he is allowed to spread that loss forward for 18 years.

He's living high on the hog, making tons of money, and this depreciation bull**** is allowing him not to pay taxes, thus shifting the Government's burden of taxation to everyone else.


On top of it, he gives rich people another tax cut, gets rid of the alternative minimum tax, and the estate tax. All of this benefits the one percenters and deficits are careening out of control.
 
apdst said:
That's real property not real estate.

Since you all like to brandish your superiority complex, I'm going to hold you to the highest standard.
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Quit projecting. I never announced I was anything but a layman, and the character of my comment should make that obvious, and, therefore, you are projecting.

You know damn well what I meant.
 
JasperL said:
I know all that because I do taxes for a living and have a MAcc, concentration in tax. So I know, for example, that the "add back" is to determine the character of the gain, not the amount. And I know about 1031s, etc.

But the point is in most cases, that $1 million office building is worth MORE than $1 million when you go to sell it. It does not depreciate in value - it APPRECIATES in value. That's not always true, like it's not always true land always goes up and never down. But it's the typical case, and we don't allow "depreciation" deductions for the land under that building because it's not presumed, as the tax code does for structures, that it depreciates in value over time.

Just for example, I'd love it if I could buy gold and take phantom deductions that assume gold bars depreciate over time. It would make investing in gold far more attractive given that over the long term gold appreciates in value not depreciates.



If the building increases in value, depreciation is in fact a tax 'freebie.' The taxpayer is claiming deductions for an asset that is increasing in value.
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So, JasperL, obviously, given the character of my OP, I'm a layman, but where my sympathies and concerns about right? Your comment seems to suggest that I was right.

I"ll defer to your knowledge.
 
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