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Tuesday, October 04, 2016

Press beclowns itself on taxes

The shallowness of the press seldom is as evident as it was on Monday following the New York Times breaking news from 1995 that Donald Trump lost nearly a billion dollars and -- gasp -- did not have to pay federal income taxes on it.

Finance columnist Rick Newman of Yahoo showed he knows not of what he speaks in a piece entitled, "Want a tax break like Trump’s? Good luck with that."

From Newman:
Legal tax deductions are a beautiful thing: You get to keep more of your money while still doing right by Uncle Sam.
But hardly any Americans will ever get the sort of tax breaks Donald Trump has enjoyed. Because he’s a real-estate developer, the Republican presidential nominee benefits from some of the most generous tax breaks on the books. And because he lost a staggering amount of money in the early 1990s, Trump was able to claim a $916 million loss in 1995 that helped him slash tax payments in future years. It’s possible Trump hasn’t paid any federal income tax in decades.
Can ordinary people claim losses in one year in order to trim their tax bills in the future? Legitimate business owners can, but most taxpayers have no such option. “The law puts a very high hurdle on regular folks with salaries doing things they say are a business,” say Lee Sheppard, contributing editor at Tax Analysts. “There are certain parts of the law the IRS polices, and this is one of them.”
It’s routine for businesses to use operating losses in one year to reduce taxes in future years. But few businesses can withstand a loss of nearly $1 billion, as Trump’s did. Most businesses that endure steep losses go bankrupt or just close.
That's misleading and maybe even a lie. Individuals can write off business losses from losing money on a house or a stock. Writing off losses is quite common. I know a 90-year-old woman who did so and she made less than $15,000.

I don't recommend it.

Trump had to lose $916 million to get what, $300 million written off his taxes?

Ryan Ellis at Forbes explained what the fools don't know:
To state the obvious, political reporters don’t know a damned thing about taxes. I know this–believe me (to channel my inner Donald). Part of what I do for a living is prepare people’s taxes in the Washington, DC area. As an Enrolled Agent, I run into all sorts of clients. The most political (that is, horse race/hot take) clients compete with performing artists for the least amount of knowledge when it comes to taxes. I’ve even had some of them forget to bring their W-2s to a tax session.
That ignorance was on display in vivid colors over the weekend. We were told that this tricky NOL was some sort of “loophole” that only super-rich bad guys like Donald Trump got to use. We were told that this relieved him of having to pay taxes for 18 years, a laughably arbitrary, made up number that is the tautological output of simple arithmetic and wild assumptions.
In fact, a net operating loss is very common in businesses. As Alan Cole of the Tax Foundation pointed out this morning, about 1 million taxpayers had an NOL in 1995. It results from business deductions exceeding business income in a particular year. Under tax rules, this loss can be carried back up to two years, and carried forward up to twenty years. If this is a “loophole,” what are these political reporters suggesting? That a business loss should simply be eaten by the taxpayer? That Uncle Sam should be a full partner in your profits but not in your losses? How is that fair?
The reason reporters know so little about money is they get paid so little. Social Justice Warriors are dirt cheap, which is why media misers hire so many of them.

***

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13 comments:

  1. Very apt observation.

    There's a corollary to the old wheeze, "There's no such thing as a poor white Liberal", which is, "But there are plenty of poor white radicals".

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  2. In the 80's I was making $30k a year and owned a 4 family flat. I took a similar deduction. Golly! I never knew that I was one of the super rich.

    Neal Bootz used to say that the dumbest college students went into education and became teachers. The 2nd dumbest went into journalism. I think he was onto something.

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  3. I doubt The Donald does his own taxes personally. He probably has CPAs on staff. They should know the best ways to pay minimal taxes legally. I filed a Schedule C for more years than I can remember. Save your receipts! Even 50 per cent of that Egg McMuffin may be tax deductible. Pay close attention to your paperwork. The devil is in the details, and remember, "Paperwork makes the world go around - or it can bring it to a screeching halt." - Elric

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  4. I doubt the pressclown referred to by Don wrote what he did because he is poorly paid. He wrote it because he wanted to keep being paid. More than half the country doesn't even pay taxes and probably wouldn't know a tax form from a free napkin at McDonald's so he knew he could say what he wished without fear of rebuke.
    It is easy for the press to lie about everything today because only rarely is there any consequence for doing so other than greater rewards for even bigger lies. All press heros today are themselves liars and scofflaws so, to be charitable, one can say the ingénues of the press lack moral role models. But more importantly they are paid to lie and know they won't eat or be promoted to a position of peer respect if they don't. As a man famous for his integrity once said about the low morals of his time "We make no distinction between good men and bad, and ambition appropriates all the prizes of merit".

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  5. I love the part in these articles (NYT, etc.) where they just point out that by doing this, he may have avoided paying taxes somehow, which obviously only scoundrels and Evil Republicans do. I.e., He must be cheating or something!

    Um, no. Ask yourselves this one question next time: "was this illegal?" Obviously, the answer is no. Yet they and their many layers of editors and fact-checkers never figured out that this is a complete non-issue, except in the fevered swamps of their imaginations.

    And journalism wonders why it's dying.

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  6. I think most people would say "I have to lose $900 million dollars to avoid taxes? No way!" I mean, you could do that too.

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  7. If he did something wrong where is the prosecution? Where is the penalty? We already know the establishment hates him, and that the press is part of the establishment. So where is the prosecution?

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    1. Your rhetorical question is too nuanced for the 47% of Americans who don't pay taxes. In any case, the argument the Left is trying to make is that if what Trump did is NOT illegal, it should be, so that wealthy people like Trump pay their "fair share." Of course, the same tax rules are used by the pension funds of the Little People and have a direct beneficial impact for even the 47%.

      Now I also think there is another reason why the Left is pushing this issue, beyond the "fairness" one. By claiming what Trump did SHOULD be illegal, the Left is trying to use the issue as an "offset" against Hillary's email crimes. They are trying to get people to think of Trump's tax situation as the moral equivalent of Hillary's email situation. Will that work? Yes, I think it will resonate with a lot of the people who typically see themselves as Democrat voters. In their minds, what Hillary did is no worse than what Trump did, probably even less so because the FBI said there is no "proof" she intended to do what she did, whereas Trump clearly intended to "avoid paying" taxes.

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    2. If Hillary Clinton wasn't as boring as batsh*t, her media shills would have something else to write about other than Donald Trump.

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  8. Hillary Clinton, elected as President, would obviously consider that as an endorsement of her pay-for-play M.O. with foreign governments.

    Who knows what she'll sell then?

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  9. Something else the media beclowns itself on: "Trump is an isolationist who'll start wars."

    It amazes me that said media can't see the logical flaw in that statement.

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  10. This has really revealed those of the "wages" class, i.e., those who only earn wages, do not have small businesses, or make other investments.

    Many are in the "wages" class due to the level of their earnings, but we see these media types, the professors, the white collar "middle class" but only wage income types, are there because they don't invest for the future or take risks to produce businesses, but rather live on their wages and depend upon their corporate retirement.

    Oddly, the "blue collar" tradesmen are familiar with net operating losses as they are in business, not wage earners.

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  11. The NYT left out the part about how the IRS was, AND IS, OK with his return. Why I don't trust the media, #... I've lost count.

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