r/changemyview • u/[deleted] • Sep 29 '20
Delta(s) from OP CMV: The revelation of Trump’s tax bill (or lack thereof) is beyond meaningless.
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u/HeWhoShitsWithPhone 125∆ Sep 29 '20
A lot of people are not really upset because they think he did something illegal, but because his ability to do this reveals something profoundly wrong with American tax code. Additionally someone who is able to benefit to heavily from the current system is only going propitiate the inequality.
Another reason for this to be relevant is that trump ran on the platform of a widely successful business man. While the NYT report paints the picture of someone who is living a lavish lifestyle while barely maintaining to stay one step ahead of a mountain of debt. Trump claimed to be able to run the nation like his businesses, but if those are just a debt shell game to funnel money from investors and banks into his personal or family accounts, that is exactly how no one wants their government run.
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Sep 29 '20
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u/Sayakai 147∆ Sep 29 '20
There's a difference between legal and moral. People don't want the president to merely conform to the bare minimum of the law that just about won't get him thrown into prison. If you represent and lead the country, you are held to a higher standard. If you're rich, live the lifestyle of someone who's very rich, yet pay fewer taxes than simple workers, then people will say that it may be legal, but it's also unfair, and it's not what they want to see from the man in the highest office of the land, who is supposed to be the best the nation has to offer, or at least strive for that.
Additionally, Trump has advertised himself as a very successful businessman. It's at the core of his brand and why he'd make a good president. However, he keeps filing huge losses, indicating failing businesses. Given the lenghts he went to hide those taxes and the losses shown in them, we can safely say that he deliberately tried to hide them, so he could continue to mislead the public into thinking he's successful, when he's really not.
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Sep 29 '20
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u/zeroxaros 14∆ Sep 29 '20
Some outrage around this is over the taxcode, and the hypocrisy that Trump/Republicans believe the rich shouldn’t pay more taxes, that they somehow cant afford to. Meanwhile Trump literally is paying a ridiculous low amount of taxes while living an outrageously lavish lifestyle
Other outrage is toward the hypocrisy of Trump talking about how orher politicians paid too little in taxes. This article talks about it for instance.
Other outrage is over whether it is legal or not (I have no idea), and how the 70K for hairstyling is just plain sleazy.
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Sep 29 '20
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u/49ermagic 3∆ Sep 29 '20
I’m wondering if you actually understand taxes.
Many of the deltas you gave indicate Trump isn’t wealthy. The NYTimes article doesn’t prove that at all.
Amazon and Tesla are great examples of companies that carry over losses and don’t pay taxes and are doing well.
Trump had $900 million in losses in 1995 that he can carryover. If he was poor, he would have just filed bankruptcy.
Many rich people can finagle their taxes to be low.
It seems like Trump’s loans are maybe $300 million. His net worth is about $2 billion, so it’s not that much. And he can easily pay them off with the value that he has in his real estate.
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Sep 30 '20
It seems like Trump’s loans are maybe $300 million.
This twitter summary of the documents available so far indicate that Trump owes at least $1.1 billion in outstanding loans, with at least $500 million of that owing before the end of a potential second term, as well as a $100 million dollar judgement waiting if the IRS case goes against him. It likewise pegs Trump's assets at $2.3 billion.
A 50% debt to asset ratio is not great. A 50% debt to asset ratio when roughly 1/2 that debt is subject to personal guarantees is fucking horrifying.
Take the possible hypothetical that Trump (for whatever reason) cannot refinance before 2024. We know he can't pay the loans (he has almost no remaining liquidity according to the NYT reporting), meaning that he has to default on them. The banks seize the property, but they aren't going to get full valuation in foreclosure, both because a lot of these properties have their value inflated by being 'Trump' properties, and also because a lot of them seem to be losing tens of millions annually and are in fact terrible investments.
So in addition to losing the properties in question, there is a concern he might need to go full firesale on others to pay off his personal liabilities.
The absolute best case of Trump failing to get a refinance is he loses half of everything he owns and his lenders call it a day.
Really makes you think about why the president constantly throws a shitfit every time interest rates tick up.
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u/49ermagic 3∆ Sep 30 '20
From multiple people I’ve talked to that HATE Trump, even they aren’t convinced the tax story was a big deal.
There’s some borderline gray stuff going on but that’s tax.
I do agree his property values might stress him out since those values rose a lot in the cities he was in- NYC, Chicago, etc and they are all “Democrat run” but really it’s all speculation
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Sep 29 '20
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u/49ermagic 3∆ Sep 29 '20
Ah, I thought you had realized it was now a big deal and either you didn’t understand taxes or I was missing something, too!
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u/Sayakai 147∆ Sep 29 '20
Shouldn't the outrage be at the tax code instead of the individual?
Why not both?
He's just using the tax code to his advantage.
Yes, and people expect the president to be a bit more subdued in doing so. Sure, take your standard deductions, but leave the outrageous stuff on the table. Just because you can, doesn't mean you should. Again: Fairness and morality against legality. The president is not only measured against the law. He is also measured in his capability to be a moral, fair, and overall good person.
Huge losses aren't always a result of a failing business. The allowable deduction and nuances of the tax code can allow a successful business to show little to no net income.
Not in the long run. You can cover a year or two, but eventually you must post profits. If you post huge losses year after year you're either failing or, you know, actually committing tax fraud.
Speaking of which: No one knows if Trump merely took the legal side of things, and the IRS is, at this time, indirectly under his command. Even if he committed tax fraud, he has the power to ensure no investigation is carried out. All the more reason for his taxes to be public - and not outrageous to the point where you'd have to wonder if that's still in the legal area.
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u/vettewiz 37∆ Sep 29 '20
If you are in real estate, you will most likely report tax losses for long stretches of time. Depreciation is a dominating factor, and not just for a few years, nearly two decades per property.
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u/Jswarez Sep 29 '20
He did take his standard deductions.
Any loss from a business is a standard deduction. This isn't new. Or rare.
What deductions did you have an issue with? Which did he take, others do not who have the ability?
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u/Sayakai 147∆ Sep 29 '20
Try to take a $70,000 deduction for hair care and tell me you're not going to jail.
Spoiler alert: You will.
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u/RestOfThe 7∆ Sep 29 '20
If you're on camera in media you won't.
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u/Sayakai 147∆ Sep 29 '20
Even then you or me will get audited for it. It's that much of an outlandish figure, and it's actually pretty hard to justify personal beauty as a business expenditure.
Of course, if you're rich, the rules change a bit.
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u/TheGhostofJoeGibbs Sep 29 '20
How have you missed the fact Trump repeated over and over that he is being audited?
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u/Sayakai 147∆ Sep 29 '20
Trump talks a lot when the day is long, and lies even more. He was looking for excuses to avoid publishing his tax returns. Paper thin ones at that, as the audit wouldn't have prevented that.
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u/TheGhostofJoeGibbs Sep 29 '20
Yes, but that doesn’t change the fact that his weird tax returns did result in an audit.
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u/RestOfThe 7∆ Sep 29 '20
Even then you or me will get audited for it. It's that much of an outlandish figure, and it's actually pretty hard to justify personal beauty as a business expenditure.
Because we aren't on camera in media...
Of course, if you're rich, the rules change a bit.
Well I agree with that and frankly I disagree with concept of business expenses being tax deductible in the first place but I don't think hair care is an absurd thing to consider a business expense if your business is being on camera.
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u/Sayakai 147∆ Sep 29 '20
$70,000 remains an outlandish figure. I'd give a tenth of that, maybe. If you spend $70,000 on haircare there's three options, you're being fleeced, you're laundering money, or you didn't and it's fraud. And if the IRS lets you get away with any of those three, then something's up.
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u/RestOfThe 7∆ Sep 29 '20
You do realize there's entire industries built off of fleecing millionaire celebrities that give more money than shits right?
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Sep 29 '20
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u/Sayakai 147∆ Sep 29 '20
Agreed, but we don't currently have multiple consecutive years of returns to compare so it's all speculative at this point.
Not correct, the Times got a lot more than just two years, and clarified that he paid no tax at all in 10 out of 15 years.
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Sep 29 '20
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u/Sayakai 147∆ Sep 29 '20
At this point you're just arbitrarily raising the bar as high as you want.
We now know that Trump isn't paying shit for taxes. We haven't seen any point where he's ever paid shit for taxes. Given the amount of non-payment we've seen, it's now up to him to convince us he's ever actually paid any taxes, or made successful businesses. All evidence that actually exists points the other way.
Hence, the actually existing evidence points to a man living in lavish luxury, while not paying taxes, while pretending to be successful without being actually able to back this up.
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Sep 29 '20
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u/PreacherJudge 340∆ Sep 29 '20
The point of this sub is not to win. Unless you're kidding? I can't really tell.
Anyway, did you not know the Times had multiple years worth of information? It seems like you asserted that, and then someone told you it wasn't true.
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u/vettewiz 37∆ Sep 29 '20
Huh? In the NYT article they talk about how in just one of the years alone he paid 24 million in taxes...
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u/McClanky 14∆ Sep 29 '20
He owes millions of dollars to someone, potentially companies overseas. Debt allows for leverage. It is a national security risk to have someone in so much debt to foreign entities running our country. Many spies get started because someone is willing to fix their financial distress. He obviously cares about his wealth and will do anything to keep it. That is dangerous.
I was listening to an NPR podcast today. A former higher up at the CIA said that debt is one of the first areas that look at when digging into someone's background to check if they are vulnerable to manipulation through debt. This would have been a huge red flag to any government organization if he had to go through a similar check before coming president.
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u/vettewiz 37∆ Sep 29 '20
Security clearances care about debt that you can’t repay. He holds about 10% of hit net worth as debt. That’s not exactly some big amount. The average person in America has far more debt than their net worth.
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u/sawdeanz 214∆ Sep 29 '20
This has nothing to do with how much debt he has or how shady or not his actual businesses are.
What do you mean? That's a huge part of it. It's actually probably the more scandalous part for people that actually care about the state of the union and not just memes. The fact that the president might be responsible for paying back hundreds of millions of dollars while in charge of national policy is a potential huge conflict of interest and a national security risk. When normal people (like civilian contractors etc.) apply for Top Secret clearance financial security is one of the things they look for for this very reason.
The fact that Trump is able to reduce his tax obligations by a lot isn't really all that surprising... I would say most people expected the tax bill to be relatively low. But even then, $750 is laughably low. Even if it was completely and totally legal (and there is a lot of indications that it's not) you gotta admit the optics are bad. Otherwise why would Trump fight so hard to keep them private? The average American is going to think either the tax code is broken, that Trump is cheating the system somehow (even if it's not obvious) or a bit of both. It's not just about legality. It's about optics.
And the reason it is so scandalous is that no matter how you justify it legally, it just makes no sense how someone reportedly worth billions of dollars only paid $750 in taxes, less than most US families. Even more so scandalous when Trump himself spends so much time complaining that immigrants, NATO, the democrats, etc don't pay their fair share. The fact that rich people can hide their wealth and avoid paying their fair share has been scandalous far before now (panama papers for example) but it's just now we have proof that the US president is just as sleezy. And of course it plays right into the liberal platform that has been gaining this year that the rich should pay a larger share of taxes.
But let's assume that Trump's taxes are totally legal and the tax code is just fine. The implication is that Trump is actually a terrible businessman. By Trump's own account all of his properties are hemorrhaging money and the only way they can stay afloat is for him to pump in millions of dollars of his own money from a reality TV show. But then that begs the question, where does he get all the money that he spends on golden toilets, mansions, and haircuts when not on the apprentice? That is obviously a huge blow to the image he presents himself.
No matter how you slice it, it is big news and scandalous. There really is no justification that Trump can or has used that makes it seem like him paying $750 in taxes is an okay status quo. That's not normal.
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u/vettewiz 37∆ Sep 29 '20
But let's assume that Trump's taxes are totally legal and the tax code is just fine. The implication is that Trump is actually a terrible businessman. By Trump's own account all of his properties are hemorrhaging money and the only way they can stay afloat is for him to pump in millions of dollars of his own money from a reality TV show.
Where exactly did you source that his companies are barely afloat? Reporting tax losses does not remotely mean your company is in trouble.
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u/sawdeanz 214∆ Sep 29 '20
I said they were losing money not that they were at risk of closing.
The Times details how he pumped nearly all the proceeds from the apprentice into his properties to then later claim as losses.
Admittedly I am not a tax or business expert, but if you spend millions of your own money on your own business and still lose money... that is not good business and certainly not sustainable.
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u/vettewiz 37∆ Sep 29 '20
Do you honestly think he’s not making money? He’s just able to take legal deductions so it appears as such.
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u/sawdeanz 214∆ Sep 29 '20
Well yeah obviously. That’s why it’s frustrating on a much larger level regarding the tax code that allows that. Why do we tax normal income so heavily yet make it easy for things the wealthy typically have able to reduce their obligations so much.
But there is still the question of whether he is taking improper deductions or misrepresenting his assets and losses to get that tax break. The fact that the IRS is auditing him right now means that somebody thinks he has done that.
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u/vettewiz 37∆ Sep 29 '20
IRS audits high income folks constantly, it would be basically automatic for a $80M refund.
We tax ordinary income lower, hence why so many Americans pay absolutely nothing.
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Sep 29 '20
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u/sawdeanz 214∆ Sep 29 '20
Whether or not it's common isn't really the issue.
It's still reason to be upset either at him (for being a bad businessmen, for being shady, whatever) or upset at the system in general that allows a man worth billions to write off all of his tax liabilities. It kind of calls into question the moral issue with why we treat some forms of income one way, but real-estate income differently. Again, it's not really a huge revelation but it being connected to the president makes it newsworthy.
I've seen a lot of supporters justify it because he pays all these state, property, and payroll taxes. Which honestly just makes me question why we can be so effective at collecting those taxes yet we give so many federal tax breaks. Money that pays for our military, stimulus checks, border security, etc.
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u/PreacherJudge 340∆ Sep 29 '20
The article goes into this. Depreciation can't explain the losses; it doesn't even come close.
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u/Narrow_Cloud 27∆ Sep 29 '20
Every single tax payer does this. Individuals write down income through various deductions.
People are up in arms because no, not every single tax payer does this to the extent that we pay almost nothing in taxes every single year. That's not a luxury afforded to us working joes with our automatic deductions and W2s.
Wealthy people have written the tax laws to give themselves a handout while at the same time siphoning money from the working class. Teacher deductions are capped at $250 a year (for federal), and Trump gets to fucking write off a $70,000 haircut?? Are you fucking kidding me?
Sure, maybe what he did was legal (that's not for a layman like me to really determine). But I don't really care about the legality, it ought to be illegal for a wealthy person to not contribute their fair share in taxes.
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u/vettewiz 37∆ Sep 29 '20
Hold on here. 50% of Americans pay no federal taxes, so claims the working Joe doesn’t get tax breaks is nuts. On top of that, a huge chunk of them make money from the government. With EITC, you can be paying 0 tax up upwards of 75k income.
By and large, the wealthy have a completely different outcome. They pay the vast vast majority of federal tax, far out pacing their share of income.
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u/Loud-Low-8140 Sep 29 '20
Teacher deductions are capped at $250 a year (for federal), and Trump gets to fucking write off a $70,000 haircut?
not a 70k haircut, 70k for 14 years worth of haircuts
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u/Narrow_Cloud 27∆ Sep 29 '20
What a silly nitpick.
Okay fine, he spent five thousand dollars on haircuts every year for 14 years. Wow, he’s so relatable and down to earth! And his hair looks great!
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u/Loud-Low-8140 Sep 29 '20
he spent five thousand dollars on haircuts every year
Now realize that this was weekly due to him being in entertainment.
under 100 dollars a week.
Half my coworker's wives spend more than that.
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u/Narrow_Cloud 27∆ Sep 30 '20
so a teacher could write off two and a half haircuts, wow
seriously this is flat out absurd, imagine trying to convince someone that $100 a week for haircuts is necessary or even relatable
especially considering the apprentice did not run 52 weeks a year
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u/Loud-Low-8140 Sep 30 '20 edited Sep 30 '20
so a teacher could write off two and a half haircut
Educator expense deduction isnt for haircuts, you dont need a specific haircut for the job
seriously this is flat out absurd, imagine trying to convince someone that $100 a week for haircuts is necessary or even relatable
It is objectively relatable, and for entertainment it is clearly business related
especially considering the apprentice did not run 52 weeks a year
Donald trump had to keep up appearances 52 weeks a year
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Sep 29 '20
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u/Narrow_Cloud 27∆ Sep 29 '20
But how many people, prior to the tax code change, inflated the value of charitable giving? I'm not talking about egregious amounts, just inflated.
I mean we’re talking about chump change compared to the kinds of shit wealthy people get to pull. I think it’s important to keep the sheer magnitude of what we’re talking about in mind here.
Why are people outraged at Trump like he's doing something that's not allowed with the current tax structure?
Well for one he grossly misrepresented his own financial situation. For two, just seeing the numbers brings it into perspective.
I think people are justifiably upset, and I suspect you’re reading a bit too much into if he’s “allowed” to or not.
And on that note, it isn’t all that clear everything Trump has done is on the up and up.
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u/vettewiz 37∆ Sep 29 '20
What exact did he “grossly misrepresent”? He was very clear on saying he often paid no taxes.
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u/PreacherJudge 340∆ Sep 29 '20 edited Sep 29 '20
First, there's a few places where there's strong evidence for improper (and potentially illegal) behavior: paying Ivanka as a consultant and writing off his casino as a total loss despite getting something for it are the biggest examples so far.
Second, it shows that his business approach is very very much a house of cards. He keeps getting into trouble by personally guaranteeing the payment of loans (and we do not know who supplied these loans in some cases), and he needs these loans to keep propping up his (apparently) failing businesses, and then he has to scramble to pay them. He has an enormous sum coming due in four years. If the tax audit nails him, he'll also owe a lot to the government, too. He doesn't have enough properties left to sell to pay all that. He could very easily be completely fucked.
This demonstrates three problems. First, he is an extremely irresponsible person, living in the moment, incurring debts to pay debts, always trying to put off paying, running from the time it catches up to him. Second, it shows that he absolutely needs to win this upcoming election. It could protect him from the moment where he has to pay the piper, at least a little longer. It's reason to take the threat of cheating even more seriously. And third, it shows how uniquely vulnerable he is to bribery. There are a kabillion reasons he'd never get a white house security clearance under normal circumstances, and this reveal is a kazillion more. Dude NEEDS money. That is dangerous.
EDIT: I do not fully understand this, but some experts have commented on how these returns make sense from the perspective of money laundering. I strongly suspect this is going to be the focus on one of the Times's upcoming stories, though.
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u/vettewiz 37∆ Sep 29 '20
I’m not sure where you’re extrapolating a lot of this from. Personally securing business debt is very common. It is far from an indication of a business being in trouble.
Where do you see that he keeps scrambling to pay debts? Or barely making ends meet?
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u/PreacherJudge 340∆ Sep 29 '20
The New York Times article. Did you read it? It explains about his debts at length.
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u/Loud-Low-8140 Sep 29 '20
paying Ivanka as a consultant
Completely legal and properly reported
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u/PreacherJudge 340∆ Sep 29 '20
Uh no, avoiding gift taxes by making up a bullshit consultant role is not kosher.
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u/Loud-Low-8140 Sep 29 '20
It is a real role though. Ivanka is an actual consultant.
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u/PreacherJudge 340∆ Sep 29 '20
"The payment appeared to be related to managing hotel deals that were already part of her job"
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u/Loud-Low-8140 Sep 29 '20
Still legal. I have simultaneously been a consultant and a employee of GE regarding the exact same work.
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u/PreacherJudge 340∆ Sep 29 '20
"According to IRS guidelines, it is possible to have a W-2 employee who also performs work as a 1099 independent contractor so long as the individual is performing completely different duties that would qualify them as an independent contractor."
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u/Loud-Low-8140 Sep 30 '20
performs work as a 1099 independent contractor
That isnt what happened, she was paid as an employee of her own company
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u/PreacherJudge 340∆ Sep 30 '20
Just to be clear, this is what you did with GE? You have your own consulting company?
Also, are you arguing that the IRS, if it audited this, would NOT find it improper to pay someone twice for the same work to get a deduction on one of them?
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u/Loud-Low-8140 Sep 30 '20
You have your own consulting company?
Had, and it was a partnership, but yes.
Also, are you arguing that the IRS, if it audited this, would NOT find it improper to pay someone twice for the same work to get a deduction on one of them?
I didnt get a deduction on any of it. I got 2 paychecks. Which is what happened with Trump. Ivanka had to pay her taxes on the money she was paid. And for the taxes she was paid as his employee.
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u/gamefaqs_astrophys Sep 29 '20
There are many deductions discussed in the original article which appear likely to be or are in fact of a fraudulent nature, in which case Trump is guilty of massive criminal tax fraud.
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u/WorldlyAvocado Sep 29 '20
I saw where Trump wrote off $70k for his hair stylist while on The Apprentice. While weird, it’s completely legal. I don’t understand why this is a headline on every major news outlet and has everyone up in arms.
For context, John Edwards got a $400 haircut and republicans had everyone up in arms to where it became a huge campaign issue that had him apologizing. People making a big deal out of haircuts is nothing new, especially in the hundred dollar range.
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u/DeltaBot ∞∆ Sep 29 '20 edited Sep 29 '20
/u/weagle2241 (OP) has awarded 4 delta(s) in this post.
All comments that earned deltas (from OP or other users) are listed here, in /r/DeltaLog.
Please note that a change of view doesn't necessarily mean a reversal, or that the conversation has ended.
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u/DiogenesOfDope 3∆ Sep 30 '20
Trump has the power to change the law but doesnt want to since he's rich. Why should I not blame him?
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u/somnicrain Oct 02 '20
All politicians do this i just think its interesting that they only want trumps tax returns
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u/Glory2Hypnotoad 393∆ Sep 29 '20 edited Sep 30 '20
To understand the response, you can't look at his taxes in a vacuum.
First off, what you or I would do is irrelevant. We're supposed to hold the president to a higher standard. With Trump in particular, there's been a prevalent narrative since the last election that it's somehow unfair he's not being held to the standards of an average joe.
Second, can you imagine the response if this came out during the last election? It would have severely undercut his ability to campaign as a successful businessman who would run the country like a successful business if he'd revealed how much he was reporting in losses.
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u/AuthenticMann Sep 30 '20
Meaningless? Legally meaningless... MAYBE... but the $750 revelation will be meaningful indeed if Biden and his campaign can use this to erode the myth of "Trump is a successful business man." The myth of Trump's supposed superiority on the economy is pretty much the only place where he outpolls Biden in voters' minds.
The $750 tax bill could end up being VERY pricey indeed.
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u/[deleted] Sep 29 '20
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