Monday, October 10, 2016

Tax Avoidance Is Both Smart and Honorable

From FEE.org:

Since the first Presidential Debate, there has been a lot of hue and cry because Donald Trump had the temerity to declare that he paid no income taxes. More specifically Hillary Clinton said, about his refusal to make his income tax statements public:

"There is something he is hiding. Or maybe he doesn't want the American people to know that he's paid nothing in federal taxes, because the only years that anybody's ever seen were a couple of years when he had to turn them over to state authorities when he was trying to get a casino license, and they showed he didn't pay any federal income tax."

Trump retorted, "That makes me smart," more or less declaring he didn't pay any income taxes and he's proud of it.

And so he should be.

To be sure, he is vulnerable to the charge of hypocrisy, not paying tax, on one hand, and advocating what could turn out to be the largest infrastructure project in American history on the other, in addition to kvetching about crumbling infrastructure and declining military spending.

Yet, on the matter of taxes alone, he is right.

Judge Learned Hand stated that "anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands." (Gregory v. Helvering 69 F.2d 809 - 1935)

Everyone Should Do It

This is not just a privilege of the rich, though they might have more options available and the means to hire skilled tax lawyers. Every citizen has options available so as to limit or lower her taxes. These include such things as the various Individual Retirement Plans (IRAs) which confer certain tax advantages. Additionally, interest paid on a loan for business purposes is tax deductible. Many people run small businesses from their homes in order to deduct some of their living expenses. [read more]

Just like the article says because taxes are so complicated and confusing businesses hire tax attorneys to advice them of the best options. Not only do tax attorneys benefit from the complicated tax system but tax accountants and tax software companys benefit too. If the Left wants people to pay their “fair share” then the powers-that-be need to streamline the tax code like Trumps want to do. But too many in Congress use it reward and punish the taxpayer so there’s no incentive to change it.

Judge Learned Hand says its not patriotic to pay more. Well, the Left thinks it is your patriotic duty to pay more taxes because they see it as cost to the gov’t. It’s not your money but the government’s money. The Left will never tell you that though. All they say is it is your patriotic duty to pay taxes.

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