Trump is a loser... of money

[NAOS]

A true flat tax can't work in business unless it is a super nominal fee... like the1.5%. Even if you had a ton of different industry designations to charge different rates it would allow complexity and would have so many unintended consequences.

The reason trump pays so little has nothing to do with a flat tax or graduated rates etc. If you want to get rid of personal exemptions/deductions like you suggest that won't change anything for the rich.

Most of the ways the rich "game the system" are by reinvesting, financing, and using non-cash deductions like accelerated depreciation. Amazon gets a lot of credits for R&D and reinvests a ton of money in the business for expansion.

Most of the rich people I know pay a ton of tax. They plan and get some of the edge off of it, but can't avoid unless you are doing something illegal. There are things we can change without throwing out the whole tax code. Changing tiers and throwing out some fairy tale flat tax system won't change things. Reduce non-cash items like depreciation, disallow investment interest, get rid of wealth transfer vehicles that avoid tax, add on a federal property tax for commercial properties, get rid of capital gains and qualified dividend rates, add in consumer taxes for luxuries...

There aren't an easy or quick fixes that can overhaul the entire income tax system.

Speaking of luxuries.... what are are the different ways we can tax second homes? I don’t mean cabins.... some distinction needs to be made here... but I mean fully functional, on-grid vacation homes. Tax these in new ways, please.

And all these rivers of taxation need to be paired with a system of debt forgiveness in order to meaningfully reestablish things.

 

[Avery]

Speaking of luxuries.... what are are the different ways we can tax second homes? I don’t mean cabins.... some distinction needs to be made here... but I mean fully functional, on-grid vacation homes. Tax these in new ways, please.

And all these rivers of taxation need to be paired with a system of debt forgiveness in order to meaningfully reestablish things.

It would be interesting to understand how many people that have second homes actually have third homes, fourth homes, etc. I imagine a higher % of people than we might think that have second homes have even more than that.

My wife's family built their cabin in the 60's for about $5k - land included (about 1k sq. feet). How sweet would that be nowadays? Electrical and plumbing is shot though - would be easier to tear it down vs. try and fix.

 

[Handlogten's Heros]

Speaking of luxuries.... what are are the different ways we can tax second homes? I don’t mean cabins.... some distinction needs to be made here... but I mean fully functional, on-grid vacation homes. Tax these in new ways, please.

And all these rivers of taxation need to be paired with a system of debt forgiveness in order to meaningfully reestablish things.

Not sure the best way, but it wouldn't be hard. luxury taxes could be applied to boats, cars, etc. over a certain price. Like instead of letting businesses deduct the private jet add a surtax on it. When you get to that level of wealth its all a just a big pissing contest so they will pay whatever.

Some of the challenge is if you tax too hard you will drive them to other countries that will give them tax relief. You also have to be aware of the industries you could hurt.

I think wealth transfer taxes would be one of the biggest opportunities for taxation. On one hand it doesn't seem fair as that money was already taxed, but on the other hand it ain't like the little ***** that inherit it earned it.

 

[NAOS]

Not sure the best way, but it wouldn't be hard. luxury taxes could be applied to boats, cars, etc. over a certain price. Like instead of letting businesses deduct the private jet add a surtax on it. When you get to that level of wealth its all a just a big pissing contest so they will pay whatever.

Some of the challenge is if you tax too hard you will drive them to other countries that will give them tax relief. You also have to be aware of the industries you could hurt.

I think wealth transfer taxes would be one of the biggest opportunities for taxation. On one hand it doesn't seem fair as that money was already taxed, but on the other hand it ain't like the little ***** that inherit it earned it.

Seems fair af to me. I’ve always supported robust inheritance taxes.

 

[TheGoldStandard]

A true flat tax can't work in business unless it is a super nominal fee... like the1.5%. Even if you had a ton of different industry designations to charge different rates it would allow complexity and would have so many unintended consequences.

The reason trump pays so little has nothing to do with a flat tax or graduated rates etc. If you want to get rid of personal exemptions/deductions like you suggest that won't change anything for the rich.

Most of the ways the rich "game the system" are by reinvesting, financing, and using non-cash deductions like accelerated depreciation. Amazon gets a lot of credits for R&D and reinvests a ton of money in the business for expansion.

Most of the rich people I know pay a ton of tax. They plan and get some of the edge off of it, but can't avoid unless you are doing something illegal. There are things we can change without throwing out the whole tax code. Changing tiers and throwing out some fairy tale flat tax system won't change things. Reduce non-cash items like depreciation, disallow investment interest, get rid of wealth transfer vehicles that avoid tax, add on a federal property tax for commercial properties, get rid of capital gains and qualified dividend rates, add in consumer taxes for luxuries...

There aren't an easy or quick fixes that can overhaul the entire income tax system.

Agree., but as a corporate and m&a tax attorney for large corporations, there are so many tax loopholes, it is crazy.

Most of my income generating clients pay no tax through legal means, although I operate in a special area of law which provides these breaks.

And yes, the entire tax code should be thrown out, but as I stated in my first post, too many rely on the complicated system and will fight back. And good luck getting the government to make a change on their own.

Before entering private practice, I was part of a government task forced that partnered with the IRS to update a set of regs. We had proposed regs for this change in 2011. The revised regs. have still not been promulgated.

And a business shouldn't pay more than a nominal flat fed tax, especially if no deductions. The majority of income tax burden should be on individuals. If Amazon paid a 1.5% gross receipts tax, the IRS would collect substantially more. Moving capital gains to ordinary income (perhaps with relief for retirement plan distributions) would also go a long way. In WA 1.5% is the max. Most businesses pay less, and it brings in a lot of our revenue. I am a partner in a multi-state firm, so I get taxed in multiple states. For me, the 1.5% gross receipts tax is inline with the 6.9% tax (on net income) I pay on income from other states.

A system with lower base rates and no deductions ensures everybody pays. Lower overall tax rates, with more collections. Right now approximately 50% of American households pay no federal income tax. And many high wage earners pay a much lower percentage than the middle and upper middle class.

 

[TheGoldStandard]

Seems fair af to me. I’ve always supported robust inheritance taxes.

The problem with wealth tax is it can destroy a business. Many family businesses are passed on and weath tax can wreak havoc as many companies are asset rich but cash poor.

 

[Handlogten's Heros]

Agree., but as a corporate and m&a tax attorney for large corporations, there are so many tax loopholes, it is crazy.

Most of my income generating clients pay no tax through legal means, although I operate in a special area of law which provides these breaks.

Outside of my tech clients which rack up huge losses all of my clients that make money pay significant tax.

If you are saying get rid of pass throughs and apply the tax as a C-corp for businesses that may work. The business owners then get taxed on wage? They will find ways to receive compensation outside of a wage and avoid the punitive individual rates. No matter what system you setup there will be work arounds. Those that are the wealthiest will be the ones with the means to setup the work arounds.

I think there is some low hanging fruit, but even changes to those items could have rough side effects.

 

[NAOS]

The problem with wealth tax is it can destroy a business. Many family businesses are passed on and weath tax can wreak havoc as many companies are asset rich but cash poor.

Two replies:
1. From a competition-is-good perspective, should we be concerned about these businesses, or would it be better to recycle their value?

2. I imagine it is possible to value a company in a great number of different ways. As a lawmaker/taxman, you obviously want to tinker with the regulatory dials and not do undo harm to middle-class, pro-worker jobs. Or at least as little as possible. For example, there could be ways of not counting the value of inherited machinery; and, in certain parts of the country, maybe you could not count the value of inherited land or industrial buildings at full-market rate for a period of 10 years after inheritance (or some **** like this)... long enough to see if the next generation actually wanted to carry it on. But if they just want to get free cash from the process that grandpa started, then my heart isnt gonna bleed for them.

 

[Handlogten's Heros]

The problem with wealth tax is it can destroy a business. Many family businesses are passed on and weath tax can wreak havoc as many companies are asset rich but cash poor.

There would need to be some adjustments and thresholds... don't want to force a sale of the family farm.

 

[Eminence]

We need to generate, what 4-5 Trillion in revenue yearly?

 

[Handlogten's Heros]

The problem with wealth tax is it can destroy a business. Many family businesses are passed on and weath tax can wreak havoc as many companies are asset rich but cash poor.

You could defer the tax on an operating business until it is liquidated or have a phase in of the gain over 10-15 years to finance it. I don't want someone to sell the family farm, but if the family farm is worth $50M they could afford to sell a portion of it.

I'm probably just injecting my dislike for the trust fund kids into the solution on this issue... Just seems like they are doing more than okay and don't necessarily deserve to hoard wealth that their grandparents and parents built. Maybe we just levy an ******* tax... cuz some of them would pay loads of that.

 

[cowhide]

Surprise surprise the guy most of us already knew was a cheating, lying, corrupt, loser turns out to be a cheating lying corrupt loser.

Sent from my ONEPLUS A6013 using JazzFanz mobile app

And a bad business man who loves debt.

 

[cowhide]

S

Probably... but I think the more likely case is the tax losses are closer to reality and he commuted bank fraud.

My experiences with real estate developers likely tints my view here... but there are logical reasons and tax rules that can explain that part of the equation.

So what is your explanation for 70,000 dollars for haircuts in a year?

 

[Handlogten's Heros]

S

So what is your explanation for 70,000 dollars for haircuts in a year?

That’s a drop in the bucket but obviously not ordinary and necessary. Although if you were on tv or speaking a bunch in public you might have a hair and makeup person.

The losses are more a function of debt and depreciation.

 

[Gameface]

That’s a drop in the bucket but obviously not ordinary and necessary. Although if you were on tv or speaking a bunch in public you might have a hair and makeup person.

The losses are more a function of debt and depreciation.

You can't lose more money than you take in 15 out of 20 years and call it depreciation. It's called losing money at some point and Trump is well past that point.

Companies sometimes save up depreciation over a few years and claim it all at once when needed to gain a strategic tax advantage. But if your depreciation is greater than profits more years than not you are losing money. Depreciation isn't just some tax trick, **** losses value over time. If you can't stay ahead of that then you will eventually go out of business.

Sent from my SM-G973U using JazzFanz mobile app

 

[One Brow]

The problem with wealth tax is it can destroy a business. Many family businesses are passed on and weath tax can wreak havoc as many companies are asset rich but cash poor.

Would these be businesses that generate a significant profit, but can't secure a loan against their assets?

 

[TheGoldStandard]

Would these be businesses that generate a significant profit, but can't secure a loan against their assets?

Possibly. Upon death, an appraisal is done (assuming a higher death tax transfer, in addition to any ongoing wealth tax such as the CA proposal). Most small businesses are worth more than their tangible assets, and are valued using a discounted cash flow/future projected earnings and perhaps a comparison to other businesses/market approach. Many business owners hold the vast majority of wealth through their businesses. Valuing a business that is ongoing using an asset approach is generally inappropriate. A large number of service based businesses have a high appraised value, with little underlying assets to secure a loan. Mezz debt, with very high interest is possible, with an even higher burden to a business. Even a 25% tax could raise havoc. I also like the idea of encouraging investment and growth. A large wealth tax can stifle that.

Assume a death wealth transfer tax of 50% with a bank that would lend 50% of a businesses appraisal, but projected excess cash flow will drive the amount of the loan. Most loans will be capped from a bank at 5 years assuming strong cash flow. Even with strong excess cash, this is a major burden to a business. Expect hiring freezes, lowered business expenses (restaurants are suffering now partially to halted in person business dinners. I have spent more on business dinners with referral sources and clients than I ever would for myself...). Also plan on reduced employee bonuses, reduced benefits, etc. Business owners generally share the burden. I see it frequently.

So if a new wealth and or estate tax is not carefully crafted, it could cause havoc. I am fine taxing billionaires to the point they will take it without fleeing the country or impacting middle class jobs. Countless jobs depend on the wealth of the ultra rich, and as much as I want everyone to pair their fair share, we need to consider potential economic fallout to ensure the result is more $ in the treasury collected, with little to no offset to the economy.

A minimum gross income tax on the ultra rich (on all earnings, including capital gains) would be a good start. Couple that with a 10% death tax on all wealth, with standardized appraisal standards subject to audit, payable in installments over 5-10 years, and that will be a decent burden shift. No spousaal exceptions, include gift transfers within 10 years of death.

I am open to fair tax for the ultra rich, I just don't trust our legislators promulgate regulations that will provide a net benefit.

 

[Handlogten's Heros]

You can't lose more money than you take in 15 out of 20 years and call it depreciation. It's called losing money at some point and Trump is well past that point.

Companies sometimes save up depreciation over a few years and claim it all at once when needed to gain a strategic tax advantage. But if your depreciation is greater than profits more years than not you are losing money. Depreciation isn't just some tax trick, **** losses value over time. If you can't stay ahead of that then you will eventually go out of business.

Sent from my SM-G973U using JazzFanz mobile app

I understand depreciation... but in real estate you take depreciation on an appreciating asset. It isn't a car or piece of machinery that depreciates. If you can accelerate depreciation when an asset is placed in service you can have situations where you have a tax loss and positive cash flow.

I do think Trump likely is losing money because over the long term you can't have that kind of negative cash flow or loss. He's likely cheating on his taxes too. The other issue is real estate is a roller coaster and if you are super leveraged it doesn't take much to create huge operating losses that carry forward.

Having seen the returns of many real estate developers over the years I just wasn't surprised... that's all. Its just different than your manufacturers and service companies.

I think he likely is a ****** business man and was bailed out with his "celebrity" income.

 

[NAOS]

I’m getting further into the recent investigations of Trump’s taxes. This dude can’t run a business to save his ****ing life.

 

[Getting Traded]

That’s a drop in the bucket but obviously not ordinary and necessary. Although if you were on tv or speaking a bunch in public you might have a hair and makeup person.

The losses are more a function of debt and depreciation.

S

So what is your explanation for 70,000 dollars for haircuts in a year?

Is that for Donald Trump? I thought it was a family expense. Even so. But if Trump is paying that much for haircuts, he's definitely getting ripped off ... lol.