Friday, 30 September 2016

Donald Trump and taxes: did he do anything wrong?

From https://onsizzle.com/t/donald-trump_taxes
Jerry Coyne asks this question here, regarding Trump's refusal to release his tax returns. He gives a somewhat contradictory response:
The fault lies not in Trump, but in a tax code that allows rich individuals and corporations to get away with paying almost nothing. And that is wrong, for of course all citizens have a duty to share in the burden of running the government, and of funding schools, roads, and other infrastructure.
... 
But if you are outraged at Trump’s zero tax bill, then save your rancor for the government and its tax laws, not at him.
Well, the question was: did Trump do anything wrong? Not: did Trump do anything illegal? So in that respect the answer, in Coyne's own words (since "all citizens have a duty to share in the burden of running the government, and of funding schools, roads, and other infrastructure"), is: yes, Donald Trump did do something wrong if the 'duty' here is moral, not legal, which I take it to be (and if he exploited the tax laws to substantially reduce his tax bill).

Jerry also says:
Everyone tries to minimize their tax burden, including me, using the legal provisions in the tax code. Seriously, how many of you refuse, for instance, to take your legal mortgage-interest or dependent deductions because you want to pay more than you have to to the government? If you do take legal deductions, you have no business criticizing Trump on this account.
I don't think this argument takes into account the sort of arrangements that might be open to the mega-wealthy, like Trump. Of course I will make use of mortgage tax relief and expense deductions where I can, and try to minimise my tax bill, but I'm never likely, at my rate of income, to reduce my percentage tax take to much less than 30-40% overall. The mega-wealthy aren't suspected of making drastic cuts in their tax bills by such run-of-the-mill tax exemptions, but with the use of vehicles like trust funds and overseas schemes. The suggestion is that they can reduce their percentage tax bill to a fraction of 40%, whilst sticking to the letter of the law.

There have been many such schemes drawn up by expensive accountants over the years (at least in the UK) that stick to the letter of the law but not the spirit of the law. Because of this anomaly, the UK has drawn up general anti avoidance legislation to try to mitigate their losses from such practices. Previously schemes were just legal (avoidance) or illegal (evasion); but now, whether or not something is legal has to be argued. The need for such legislation highlights the fact that there is a gap between strict legality and spirit, the exploitation of which opens up some ethical questions.

Now I don't think it's always the case that use of such schemes is immoral, but I do think it's immoral if someone exploits this gap to reduce their tax bill to a fraction of the amount 'normal' taxpayers pay, just because they have the funds to employ expensive accountants.

This is because that person is choosing to freeload on the backs of much poorer people simply to feather their own nest, while still taking full advantage of the very society that those poorer people pay for, such as the "schools, roads, and other infrastructure" that make Western countries tick.

So I think if anyone thinks freeloading is not right, then they should be suspicious of how some mega-wealthy people conduct their tax affairs. If you're OK with freeloading, then, fine; you won't consider it an issue.

In Trump's case, though, there's a further gremlin; he is looking to be head and representative of the very Government that raises those taxes, to be, amongst other things, the guardian of that exchequer. I think it's fair to expect such a person to be fully committed to paying their fair share into the coffers of the country he pretends to be leader of. What would be a fair share for Trump? Well I have my ideas, but everyone should decide for themselves. Except, no, they won't have the opportunity to, because at this moment Trump won't release the details of what he pays, unlike every other modern presidential candidate.

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