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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

  • RW

    Your right to a degree. You mentioned “the wandering Jew”.

    I elaborate that the Jewish people, historically have tended to migrate almost exclusively to locations that are economically and culturally vibrant already. I would speculate that Jews have thrived in these places and have often improved the bounds of their economies and knowledge base.

    You can also ask; how many massive entertainment conglomerates, Nobel winners or billionaires has Isreal developed? If Jews are so capable, why isn’t Tel Aviv the Rome of our time?

    Jews are successful because they value education, maintain a strong social cohesive, they actively monitor and have a good sense for Zeitgeist wherever they are and they carefully choose the places they settle and congregate themselves heavily in these choice locations.

    But most importantly (haulocaust increased the importance of this aspect), they actually designed their culture for success. They not only attend Harvard, they use what they learned to better the group as a whole. With as much, they studied intricate networking systems, adapted to it and in many cases improved upon them. (See how Japan acquired Aegis warships and made them better).

    Of course there is nothing wrong with any of this. It’s when you elaborately gain disproportionate power in any society where you would stand out, you must take care when attempting to make a society better (Civil Rights movement) and rewriting that society all together (mass immigration). Ask blacks in China, Mexico, Philippines or India how much opportunity they have? Go to businesses owned by their American diaspora and see how many blacks they hire. Go to Silicon Valley and see how many East or South Asian tech workers wish they could work with more black people. California might work as a state, but as a nation, I think your rolling the nuclear dice here. I hope we can succeed as a tolerant pluralistic superpower but at this stage in human societal development, it’s a pipe dream.

    And if Jews really are the icon for success, they would see that fundamental human successes happen over generations. Just look at the rest of the planet? Are we ready?