A preliminary review of thousands of pages of Donald Trump's tax statements published by the key congressional commission confirms that the former president used business losses in tens of millions of dollars to reduce his annual tax liabilities, in some cases up to zero.
While one of Trump's major businesses was found guilty of tax fraud at the beginning of this month, Trump himself has not been accused of doing anything illegal about his taxes and personal accounting. The case raises pressing questions about the reliability of American tax law.
Supporters of tax reform say it is time to tax wages and capital in the same way.
Serial tax avoidance
Supporters of the tax reform say that it is necessary to change the way you think that the misconception of taxation as criminal and destructive economically allows for this kind of serial tax avoidance, which is seen in Trump's tax statements.
"With Donald Trump's tax statements, we learned that in some years he did not pay any federal taxes," said Frank Clemente, director of the group dealing with tax jurisprudence of Americans for Tax Fairness.
Clemente said that Trump's tax avoidance was possible through a "full gap in the tax system that needs fundamental change".
Trump advertised his ability to use the tax code in his favor, particularly praising the use of business losses to erase his own personal tax account.
"Trump's tax statements show once again how proud I was of success and how I could use depreciation and various other tax reliefs as an incentive to create thousands of jobs and wonderful structures and businesses," Trump said in a statement.
According to the House Ways and Means Committee report published last week, U.S. tax collectors did not carry out Trump's annual audit, apparently violating IRS policies that require presidents to be subject to regular audits. The reason for this is not clear, but the complexity of Trump's financial situation and the tax rules that allow it may have been too large for the IRS to deal with the resources allocated to it.
"The individual tax return of the former president included the activities of hundreds of related and indirect entities, numerous schedules, foreign tax credits and millions of transferred dollars," stated the Ways and Means report.
Tax inequalities in the US
A structural discrepancy in the US tax system between the tax treatment of employees and business owners means that legal reforms are needed.
"In the current system, American workers pay virtually all their tax bills, while many of the best earners avoid paying billions of taxes they owe by using the system," she said in 2021 Treasure Secretary Janet Yellen.
"The root of the problem is the discrepancy in the way income is reported to the IRS: opaque sources of income often avoid control, while federal wages and benefits are usually almost fully compatible. This two-level tax system is unfair and deprives the country of funding for the basic scopes," she said.
Supporters of tax reform say it is time to tax wages and capital in the same way.
"We should tax the income from the property as much as the income from the work. Trump made very little money while working – most simply “earned” themselves as a result of the sale of inherited assets that gained value,” wrote Amy Hanauer, director of the Institute of Taxes and Economic Policy, in a preliminary article for Newsweek. ‘The legislators should equalise these rates so that someone who gets up o 6 In the morning and hard-working in the rain, he did not pay a higher rate than someone who sits in the inherited estate and watches the growing stock portfolio he received" she wrote.
Speaking in November, Fred Goldberg, who was Commissioner of the IRS under George H.W. Bush, said that simplifying the U.S. tax code should long have been a priority for legislators. “It was the Holy Grail by 40 years," said the Commissioner for the American Finance.
Source: The Hill