It's Not That Trump's Taxes Should Be Higher, but That Other People's Should Be Lower - Granite Grok

It’s Not That Trump’s Taxes Should Be Higher, but That Other People’s Should Be Lower

family taxed

We’re hearing a lot about how during some recent years, Donald Trump paid only about $750 in federal income taxes.  His tax returns weren’t obtained from an official source, so they may or may not be genuine.  But even if they are, and even if he paid only that much, the problem isn’t that he paid so little, but that other people have to pay so much.   In particular, people who are trying to raise children.

Corporations can sometimes pay little or no taxes in a given year, even if they have lots of revenues, because they pay taxes on profits — that is, on the money left over after they’ve paid their expenses.  If their expenses exceed their revenues, there’s a loss rather than a profit, and hence no tax.

(If losses are large enough, they can be used to offset future revenues.  If you lose $1 billion in your first year, and make $100 million in your second, you haven’t actually made a profit yet, have you?  This is a straightforward idea, and taxes get paid eventually when the corporation actually makes a profit.  It’s essential for allowing new businesses to run up losses while getting established, for allowing established businesses to ride out recessions, and so on.  It does, however, provide provocative talking points for demagogues, who gloss over distinctions like revenues versus profits.)

And of course, corporations have pretty wide latitude for deciding what kinds of ‘expenses’ are necessary to operate effectively in competitive markets — including owning, maintaining, and insuring items like cars or computers or phones that can then be used by their employees.

Shouldn’t we be offering the same advantages to the people who need it most — the ones who are raising the children who will be our future citizens?  One way to do that would be to create F-Corporations, which would give to families the same kinds of tax advantages that are currently available only to C-Corporations, like subtracting expenses from revenues before being taxed, spreading large expenses over multiple years, and so on.

(If Donald Trump or Bill Clinton pay hundreds of dollars for a haircut, they get to write that off as part of the cost of doing business, because they have to look their best for the people they deal with from day to day.  It’s a before-tax expense.  Why should the haircut that you have to buy for your kid — who might be trying to secure an internship, or a scholarship to an elite private school, or an appointment to West Point — be an after-tax expense?)

Now, if you think — as many Democrats surely do — that corporations get too many breaks, how can you be against putting families on an equal footing?  And if you think — as many Republicans surely do — that there is nothing more important than supporting the family as the basic unit of society, how can you be against giving families the same breaks that we now give to businesses?

Even the Washington Post, in complaining about Trump’s alleged deductions, seems to be mainly upset that ‘an average citizen can’t take all those deductions’.  Okay, so let’s change that!

In short, here’s an idea that both major parties should be able to get behind… something that seems to be in very short supply these days.

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