Posted on 03/15/2017 10:59:03 AM PDT by TBP
The multi-faceted controversy over Donald Trumps taxes has been rejuvenated by a partial leak of his 2005 tax return.
Interestingly, it appears that Trump pays a lot of tax. At least for that one year. Which is contrary to what a lot of people have suspected including me in the column I wrote on this topic last year for Time.
Some Trump supporters are even highlighting the fact that Trumps effective tax rate that year was higher than whats been paid by other political figures in more recent years.
But Im not impressed. First, we have no idea what Trumps tax rate was in other years. So the people defending Trump on that basis may wind up with egg on their face if tax returns from other years ever get published.
Second, why is it a good thing that Trump paid so much tax? I realize Im a curmudgeonly libertarian, but I was one of the people who applauded Trump for saying that he does everything possible to minimize the amount of money he turns over to the IRS. As far as Im concerned, he failed in 2005.
But lets set politics aside and focus on the fact that Trump coughed up $38 million to the IRS in 2005. If thats representative of what he pays every year (and I realize thats a big if), my main thought is that he should move to Italy.
Yes, I realize that sounds crazy given Italys awful fiscal system and grim outlook. But theres actually a new special tax regime to lure wealthy foreigners. Regardless of their income, rich people who move to Italy from other nations can pay a flat amount of 100,000 every year. Note that were talking about a flat amount, not a flat rate.
Heres how the reform was characterized by an Asian news outlet.
"Italy on Wednesday (Mar 8) introduced a flat tax for wealthy foreigners in a bid to compete with similar incentives offered in Britain and Spain, which have successfully attracted a slew of rich footballers and entertainers. The new flat rate tax of 100,000 (US$105,000) a year will apply to all worldwide income for foreigners who declare Italy to be their residency for tax purposes."
Heres how Bloomberg/BNA described the new initiative.
"Italy unveiled a plan to allow the ultra-wealthy willing to take up residency in the country to pay an annual flat tax of 100,000 euros ($105,000) regardless of their level of income. A former Italian tax official told Bloomberg BNA the initiative is an attempt to entice high-net-worth individuals based in the U.K. to set up residency in Italy Individuals paying the flat tax can add family members for an additional 25,000 euros ($26,250) each. The local media speculated that the measure would attract at least 1,000 high-income individuals."
Think about this from Donald Trumps perspective. Would he rather pay $38 million to the ghouls at the IRS, or would he rather make an annual payment of 100,000 (plus another 50,000 for his wife and youngest son) to the Agenzia Entrate?
Seems like a no-brainer to me, especially since Italy is one of the most beautiful nations in the world. Like France, its not a place where its easy to become rich, but its a great place to live if you already have money.
But if Trump prefers cold rain over Mediterranean sunshine, he could also pick the Isle of Man for his new home.
"There are no capital gains, inheritance tax or stamp duty, and personal income tax has a 10% standard rate and 20% higher rate. In addition there is a tax cap on total income payable of £125,000 per person, which has encouraged a steady flow of wealthy individuals and families to settle on the Island."
Though there are other options, as David Schrieberg explained for Forbes.
"Italy is not exactly breaking new ground here. Various countries including Portugal, Malta, Cyprus and Ireland have been chasing high net worth individuals with various incentives. In 2014, some 60% of Swiss voters rejected a Socialist Party bid to end a 152-year-old tax break through which an estimated 5,600 wealthy foreigners pay a single lump sum similar to the new Italian regime."
Though all of these options are inferior to Monaco, where rich people (and everyone else) dont pay any income tax. Same with the Cayman Islands and Bermuda. And dont forget Vanuatu.
If you think all of this sounds too good to be true, youre right. At least for Donald Trump and other Americans. The United States has a very onerous worldwide tax system based on citizenship.
In other words, unlike folks in the rest of the world, Americans have to give up their passports in order to benefit from these attractive options. And the IRS insists that such people pay a Soviet-style exit tax on their way out the door.
The GOP needs to use this as leverage to start a conversation for a federal maximum alternative tax.
And the government does everything in its ever-growing power to prevent people holding onto their money, including implementation of the Alternative Minimum Tax.
One thing left out of this story....that was only the federal tax return. The NY state return was probably in the neighborhood of $20 million, I bet.
I’m in favor of everyone paying their fair share but I’m not sure the AMT is fair.
$38 million in taxes, he paid...think of that.
President Trump has paid so much in taxes to US that it makes him 100% vested with absolute say-so credibility. WoW, $38 mil. omg!
Me thinks he’s paid his pound of flesh and then some!
Anyone care to guess what the Trump organization pays in property and sales tax for the Trump Towers in NYC, Washington and Las Vegas alone.
It has to be in the hundreds of millions of dollars per year.
Trump organizations have combined revenues of just under 10 billion per year so sales tax alone could be pushing a billion
Also the article left out the fact that, unless the president gave up his US citizenship, he would still be liable for US Federal taxes. The US is one of the few countries in the world that taxes its citizens no matter where they reside.
Since they make a big deal of disclosing their returns, someone should add up Hillary and Bill’s and see how close to $38 million they’ve come in their entire lifetime.
Nobody, and I mean nobody, should have to pay that much tax.
Bad news twinkie. He was not elected to impress you.
Maybe Trump is embarrassed by how much tax he paid so he wanted to keep it quiet!
Waimanalo, Hawaii residence ..... $8.7M
D.C. residence ..... (leasing $5M)
Dubai residence.....$4.9M (fwiw: Dubai offers limited extradition)
Chicago residence:.....$1,650,000
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