Aggressive tax avoidance like this (and at this scale) goes beyond claiming standard deductions. It takes one into unethical grey areas where one starts abusing various tax shelters and generally gaming the system. It’s not tax evasion (which is illegal and which Biff may have also done), but it’s not really something a public servant who claims to champion the “ordinary man” should take pride in.
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My understanding is
Tax Deduction: I am filing my taxes in the way the government intended, using the benefits that were written into law for that purpose
Tax Avoidance: I am hiring a team of legal and financial experts to find legal-ish loopholes to pay less in taxes than the government would normally expect someone in my position to pay
Tax Evasion: I am breaking the law by paying less than the tax code legally obligates me to pay
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That’s a fair distinction. The main point is that while the first two are legal, there’s a substantive difference between them.
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Hey now, no shaming on us adderall users who actually have decent lives due to it.
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Here’s one that’s more favourable to the financial services industry:
Tax avoidance is the use of legal methods to minimize the amount of income tax owed by an individual or a business. This is generally accomplished by claiming as many deductions and credits as are allowable. It may also be achieved by prioritizing investments that have tax advantages, such as buying municipal bonds.
Tax avoidance is not the same as tax evasion, which relies on illegal methods such as underreporting income and falsifying deductions.1
https://www.investopedia.com/terms/t/tax_avoidance.asp
There’s something alienating about altering ones behavior for tax purposes. Perhaps it is more understandable on a corporate level.
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Pro re nata
(as the doctor prescribes)
Following up on this, a forensic accountant I know said that the illegal stuff will likely lie in bribes paid to foreign politicians in countries where he’s developed or lent his name to those “luxurious, really the most elegant” money-losing properties. That is illegal, as is trying to hide it in one’s taxes.
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Baku we’re looking at you.
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I think there’s a reason that “rule of the best” devolved into a term for rule by a hereditary class. It always will.
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“Tax avoidance” = “Tax evasion but it hasn’t actually gone to court so I can’t say tax evasion because accusing someone of a crime is slander/libel”
I think the challenge is that if you are not an accountant, not a tax lawyer, and don’t have access to the kind of money that Trump had access to, your experience just doesn’t contain anything like what Trump (and many other rich people) did to avoid taxes. For a person with a sane amount of money, a deduction is claimed if the item/activity fits the intent of the deduction and there is positive evidence that the deduction is allowed. For a billionaire a tax deduction is claimed if they don’t think the government will think it is worthwhile to fight them in court over it and in any event they all have plausible deniability so there can’t be a criminal conviction. Worst case scenario - they have to pay back a portion of the taxes they avoided.
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A difficulty in perceiving scale and complexity (and the goals that result from them) is a problem I’ve always noted in general with the kind of “temporarily embarrassed millionaires” who support the GOP. It’s the same reason that they whinge (rhetorically, of course) “if I can balance my chequebook, why can’t the government balance the budget?”
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I agree, I think there’s something other than complexity going on here, though. I think it’s raw power. I don’t think that rich people’s accountants come up with super complex ways of manipulating a tax code. I think they just straight up lie and cheat. Then no one comes after them for lying and cheating, and no one can call it lying and cheating on the news. So they lie and cheat bigger and bigger as time goes on. I deeply doubt that Trump’s low taxes are because of anything more complex than, “Well, we won’t pay, what are they going to do about it?”
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With always a thin veneer of credibility though by claiming obscure deductions or exaggerating loopholes meant for legitimate reasons. Just enough to claim plausible deniability if caught.
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Here’s another one of his tax scams.
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Includes minors, people on social security with no significant savings, the impoverished, and others.
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Right, all people who are likely below the official poverty line.
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Well, it depends - if your parents make $250K but you don’t have a job, you might count in that number. But mostly, yeah.
I guess that depends on whether or not they directly support you or claim you as a dependent?
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Paying your adult children high-six-figures as “consultants” when they are already employees and they did no work does not fit into this category. That’s outright evasion.
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