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Image: © Gage Skidmore via Flickr

The President of the United States has been accused of being a tax cheat

The New York Times has reported that lots of Donald Trump’s wealth came from ‘dubious tax schemes… including instances of outright fraud’

What it means: Economists have lots of different opinions about tax. Governments usually think they’re the best way to pay for public goods - the stuff everybody uses but which are difficult to charge for by use, like motorways and clean air and national defense. Some people think high taxes on wealth are the best way to create a more equal society. Other people think low taxes encourage people to work hard and build businesses, both of which will pump more money into the economy for everybody to enjoy.

Donald Trump also has lots of different opinions on tax. He thinks it should be high for foreign stuff being sold in America, and higher still if the foreign stuff is Chinese. (FYI, these sort of taxes are called tariffs). But he apparently thinks it should be very, very low for stuff owned by him and his family.

The New York Times says that Trump lied about being a self-made billionaire (shock) and that he actually got millions of dollars from his father. It also says that most of this inherited wealth was given to him via dodgy tax deals. Trump set up a fake company so his parents could disguise the money they were gifting him as business payments (which are taxed less). He helped his dad get tax reductions that he wasn’t allowed to have. And he told the IRS (America’s tax collection authority) that the properties he inherited were worth 16x less than they actually were (you’re taxed on the value of your inheritance).

Overall, the money Trump’s parents gave him and his siblings should have been charged tax of $550 million, which is 55 percent of the total. They paid just $52.2million, which is about 5 percent. That means the US government had less money to spend on things like welfare, defence, education and infrastructure. Trump (who says the New York Times is lying) is far from the only rich person to pay less tax than the law says they should. But he is the only one who holds the most powerful government job in the most powerful country in the world.

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Reader Comments

  • WhereAreTheVikings

    What a terrible, terrible shame. Western Civilization nurtured capitalism, and now capitalism is destroying it. And these young people seem to welcome the invasion of their homeland. The media and schools have been very efficient in wiping out all traces of blood and soil.

    • prollawalllynotahumanoid

      Capitalism isn’t the problem. It’s corrupt politicians taking bribes and kickbacks from Globalists and the Chinese.

      • WhereAreTheVikings

        Maybe I should have said crony capitalism. Although Italians importing Chinese to make “Italian leather” shoes is not crony capitalism. It is capitalism, pure and simple.

        • prollawalllynotahumanoid

          That would be crony capitalism and globalism combined. They aren’t concerned with the affect their policies have upon their citizens, the health and welfare of their society and culture or their economy. What it isn’t is fair-free trade to further national interests.

          • WhereAreTheVikings

            I’ve always seen them as one and the same, but perhaps they need to be named individually, just to bring home the point.

      • WhereAreTheVikings

        But now that travel is so easy and borders are virtually down through H1bs and the like, theoretically you can’t blame capitalists for the pursuit of cheaper labor, although I do heartily blame them not being more patriotic than that. Perhaps the emerging nationalism will force them to voluntarily do what they should have morally been doing all along, and that is employing business practices that preserve their countries and nationalities. The government should be doing everything it can to encourage that, to the extent that small government should do anything but guard the borders and strictly, drastically, limit immigration.

      • Henry Lam

        It is China with its corrupted mindset affecting the world.

        • prollawalllynotahumanoid

          No it is not. Capitalism is the fairest and least corrupt system of all.

          Socialism and communism is based on authoritarianism, coercion and police intimidation. It has and always will be rife with criminality, bribes and kickbacks.

          Corruption can be anywhere but it is the very basis of socialism and communism.

    • Henry Lam

      The government is too weak. They do not understand the mindset of communists and how they educate their people. Those communist people are only loyal to their country and could be dangerous. The immigration law should only accept those who accepted multiculturalism and taught from a democratic education system. This virus events clearly has shown how stupid to take China as a friend.

      • WhereAreTheVikings

        The government is not too weak. Just weak-minded about some things.

  • Gabi Rodrigues

    For how many days can a country maximum close their borders to foreigners maximum? Like now, with the virus, everyone is using 30 days. Can it be more?