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:
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) Ironically, that judgment went against the taxpayer, something not often noted by those who quote it. The issue is known as the doctrine of substance over form. In that particular case, a businesswoman named Evelyn Gregory had swapped assets between two corporations, then dissolved one of them which distributed the assets to her as owner. She then claimed a lower tax liability as a result. In an analysis of Hand's contribution to tax law, Yale law professor Marvin Chirelstein notes that the courts "follow no single and consistent set of rules in deciding when to accept and when to disregard the taxpayer's choice of form" and that when the courts reject the citizen's chosen form of organization, they "commonly assert as a matter of principle that the incidence of taxation depends upon the substance of a transaction and that mere form is not controlling." But if the form is accepted, Hand's maxim reigns - "There is nothing sinister in so arranging affairs as to keep taxes as low as possible." That is why many businesses hire tax attorneys to advise them of the best options available to them.This results in a contradictory position. "In practice the first principle means simply that the range of effective choice is limited in the situation under review, or indeed that the only route to the taxpayer's destination is the one that bears the highest tax. By contrast the second principle, when applicable, confirms that the availability of alternative legal procedures also gives the taxpayer a right of election with respect to the tax consequences." What this means is that tax law is inconclusive and vague, but there's no harm in trying to keep taxes low. That is why many businesses hire tax attorneys to advise them of the best options available to them. 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. A recent article in the New York Times looking at the Trump tax imbroglio notes that tax write-offs for start-up business ventures are generous. "There was a point when even ruinous projects like an unfinished, unleased office tower could end up producing a profit for some investors, thanks to ample tax write-offs." Such loopholes, the article notes, were largely closed off for outside investors when the Reagan administration overhauled the tax act in 1986. "But active real estate investors and developers were allowed to keep that tax break." The article notes that when Trump had to disclose his tax filings to get a casino license back in the 80s, there were two years, 1978 and 1979, in which Trump paid no income taxes at all. "By taking advantage of deductions available to real estate developers and claiming losses from partnerships, Mr. Trump reported a “negative income” of $406,379 in 1978 and $3.4 million in 1979 — thus avoiding any tax liability for those two years, a time when he claimed to be worth hundreds of millions of dollars." The article notes further that Trump paid no income taxes in 1984, 1991 and 1993. The Donald was losing money on his Atlantic City casinos in those latter years which would have put him under water. But that is what entrepreneurship is all about. You take risks, including the risk of loss. And during the losing years, you pay no taxes. That is not, despite the agitations of the professional teeth gnashers, a bad thing. Nor is it shady or underhanded or in any way blameworthy. The Widespread Demand to Pay as Little as Possible We recently visited friends who live in a gated community on Vancouver Island. It's a fairly wealthy strata community and our host told us about one neighbor who boasts that he pays no income tax. I was amazed as I pay some tax even on my pension income. I wondered how he did it. But thinking about it, I can think of many ways in which a retired person with substantial assets can have a decent income and pay no income tax at all. These are options open to all my fellow Canadians who have accumulated some wealth during their working lives. If they have a beef, it should be with the governments making those tax laws, not with people and businesses making reasonable business decisions.These include Tax Free Savings Accounts (similar to Roth IRAs in the United States), reverse mortgages, remortgaging properties and so on. There is no capital gains tax in Canada on your principal residence. So if you bought a house in Vancouver for under $50,000 forty years ago which is worth over a million today, you can sell it and pocket that million bucks tax free. It's all above board and legal. Corporations often use differences in jurisdictional tax laws to avoid taxes by having subsidiaries in other countries. Ireland, for example, has some of the lowest corporate tax rates in the world and some companies use Irish subsidiaries to avoid paying American taxes. The professional crying in their soupers, of course, think this is a dastardly thing. But again, these companies are making use of existing legislation to minimize their tax liabilities. What's wrong with that? If they have a beef, it should be with the governments making those tax laws, not with people and businesses making reasonable business decisions. Indeed, Ireland gives generous tax benefits to creative artists. You can earn up to fifty thousand euros tax free if you live there if you are a cultural worker – a writer, a composer or a sculptor. No one seems to object to that but they cry a river when corporations use advantageous tax laws in other jurisdictions. Loopholes Liberate Tax avoidance is as American as apple pie.Like Clinton in the debate, the professional whinging class like to spout off all the things that the taxes would buy if only Trump or businesses or you and me were sacrificially minded enough. Clinton said, "So if he's paid zero, that means zero for troops, zero for vets, zero for schools or health." A site denouncing the Irish tax haven says America's three largest tech giants have avoided $8 billion over the years, money that could have paid for health insurance for 4 million kids, salaries for 200,000 teachers or pay for the California highway patrol for four years. A recent meme from Occupy Democrats says not paying taxes makes Trump, not smart, but "a selfish unpatriotic crook". Even the Clintons use trusts and charities that they control to minimize taxes. And what's wrong with that? Nothing. Remember that America was founded to a large extent on a tax revolt - the Boston tea party. Tax avoidance is as American as apple pie. The holier than thou types should consider again Judge Hand's words. "There is (no) 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." Amen to that!
Marco den OudenMarco den Ouden writes at The Jolly Libertarian. This article was originally published on FEE.org. Read the original article. More from LibertyLOL:
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I was first interested in Rules for Radicals when I saw the image above. This is exactly what we have seen over the past 40 years so I decided to read the book. I wanted to be able to better identify when its strategy was used against the American people. Also, I wanted you to save ten hours of your life. You're welcome. Main salient points to follow:
So how do we combat this effective progressive agitation? Our first weapon is information. Call it out when we see it. Call out the immoral tactics. Call out the abuse of inaccurately creating social problems. Call out the divisive nature of media and government along social, racial, class and religious lines. Call out biased news reporting and holding the 4th branch of government accountable to facts and logic. If you want to read more, check out Barack Obama's Rules for Revolution by David Horowitz below. Also Six Alinsky Rules That Explain Obama’s Words and Deeds located here.
More from LibertyLOL:How You, and You Alone, Can Build LibertyWhen people first discover the wonderful, beautiful, glorious world of liberty – the ideas, the tradition, the possibilities – they tend to fall into a trap. They note that governments are a main enemy. They never stop violating our rights. Government are supported by mass numbers of people. Those people acquiesce in the loss of rights and therefore the diminution of prosperity. We can choose the path of despair, or we can take what we have learned and start taking control. The lens of liberty reveals tremendous evil in the world that doesn’t need to exist: restrictions, wars, poverty, despair, suffering. Looking at all this can be depressing, to say the least. And that turns to anger: why, oh why, won’t governments stop doing evil things and just let people be free? Thus does the initial exuberance of having discovered good ideas turn dark. After all, if only government change is the answer, and I have no real power to change that government, what is my life worth? What is this body of ideas worth? This is a tragic turn. What’s more, it is wholly unnecessary. As it turns out, change is within our grasp. It all comes down to how we live our lives and how we think about our place within the social and political structures that surround us. We can choose the path of despair, or we can take what we have learned and start taking control. We can acquiesce to oppression or we can do something about it within the realm that we do control: which is our own lives. Here we find our source of hope. This is why I’m super excited about the new book from The Atlas Network and Students for Liberty. It is called Self-Control or State Control? You Decide. It is edited with two chapters by the brilliant Tom G. Palmer. It has contributions on policy, psychology, sociology, law, and so much more. But here is what makes this book different: it is focused on you and what you can do to build a free society. It is practical, achievable, realizable, doable. And it makes an enormous contribution to improving your life, right now, and, by extension, making the world a better place. To get a flavor of what I mean, consider the opening from Palmer:
FEE is pleased to make this book available to you as a free download. And let me add something else here that is extremely important. The Atlas Network and Students for Liberty have embraced Creative Commons. That means: no more fear of sharing. No more regulatory restrictions. No more publishing monopolies. This book is for the whole world. This is a very beautiful thing. And the license they have adopted is the most liberal: you only need to attribute the source. Otherwise you are free to share. Please help me by distributing this great book to the world, and thereby spreading the hope of liberty to the multitudes. Jeffrey TuckerJeffrey Tucker is Director of Content for the Foundation for Economic Education and CLO of the startup Liberty.me. Author of five books, and many thousands of articles, he speaks at FEE summer seminars and other events. His latest book is Bit by Bit: How P2P Is Freeing the World. Follow on Twitter and Like on Facebook. Email. Tweets by @jeffreyatucker This article was originally published on FEE.org. Read the original article. More from LibertyLOL:We wrote earlier this week concerning the banning/throttling of conservative ideas on Facebook, specifically the Being Libertarian page. We noted that as a private company, FB owns it's own servers and can ban speech it doesn't politically agree with. We concluded that as free-market believers, while no law has been broken, we should seek to expose this as much as possible so others are knowledgeable and can boycott or stop using the product if necessary. Well, it's happening again, this time with Twitter banning Conservative LGBT advocate, Milo Yiannopoulos. The context: The contretemps has been brewing all week, as Milo engaged in a barbed to and fro with embattled Ghostbusters star Leslie Jones over her Twitter feud with trolls who hated her new movie. At one point the CEO of Twitter Jack Dorsey intervened himself, asking Jones to direct message him. Milo himself said nothing racist, though he joked that Jones’ grammatically challenged quips at him were “barely literate”, said America needs better schools and referred to Jones facetiously as “a black dude”. Milo has been suspended from Twitter before and also lost his verification tag. Will tonight’s suspension really be permanent? Earlier today Milo said he was not sorry for his dialogue with Jones. “No, of course, I don’t have any regrets,” Milo told Heat Street. “But feminists on the other hand should have regrets that they have taught strong women that they are victims and attacked people for having different opinions to them on Twitter.” We'll see how this ends, however, it should be noted that Ms. Jones isn't exactly the perfect angel on Twitter.
The Social Justice Lovin' NYT covers the behavior by noting:
For years, one of the main grievances among Twitter users has been the ability of anonymous trolls to send abusive comments to other people on the service. But on Tuesday, Twitter barred one of the most egregious and consistent offenders of its terms of service, Milo Yiannopoulos, in an attempt to show that it is cracking down on abuse. The NYT emotionally tear-jerking story ends with some contrived sympathy towards Ms. Jones and sets her up as a victim: On Monday evening, Ms. Jones quit using Twitter with a final message of exasperation after days of near-nonstop abuse. “I leave Twitter tonight with tears and a very sad heart,” Ms. Jones tweeted. “All this cause I did a movie.” On Monday evening, Ms. Jones quit using Twitter with a final message of exasperation after days of near-nonstop abuse. “I leave Twitter tonight with tears and a very sad heart,” Ms. Jones tweeted. “All this cause I did a movie.” We're still waiting for our ban. It's really our only goal at this point.
Jason Stapleton over at JasonStapleton.com released his long-awaited Recommended Reading List on the 4th of July. It spans fiction and non-fiction and covers libertarian philosophy, economy and culture as well.
Check out the episode below (57minutes):
THE LIST:
Liberty The Revolution: A Manifesto by Ron Paul Don't Hurt People and Don't Take Their Stuff: A Libertarian Manifesto by Matt Kibbe American Contempt for Libertyby Walter E. Williams Liberty and Tyranny: A Conservative Manifestoby Mark R. Levin Real Dissent: A Libertarian Sets Fire to the Index Card of Allowable Opinion by Thomas E. Woods Economics Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economicsby Henry Hazlitt Basic Economics 5th Editionby Thomas Sowell Culture Battlefield America: The War On The American Peopleby John W. Whitehead Stonewalled: My Fight for Truth Against the Forces of Obstruction, Intimidation, and Harassment in Obama's Washington by Sharyl Attkisson Fiction The Count of Monte Cristoby Alexandre Dumas père Atlas Shrugged by Ayn Rand The Richest Man in Babylonby George S. Clason Nero Wolfe (or anything) by Rex Stout Psychology and Markets The Gift of Fear and Other Survival Signals that Protect Us From Violenceby Gavin de Becker The Power of Habit: Why We Do What We Do in Life and Business by Charles Duhigg Predictably Irrational, Revised and Expanded Edition: The Hidden Forces That Shape Our Decisionsby Dan Ariely Influence: The Psychology of Persuasionby Robert B. Cialdini The 48 Laws of Power by Greene, Robert The cliffnotes version "Summary, Key Takeaways & Analysis "is free with kindleunlimited. Business Ready, Fire, Aim: Zero to $100 Million in No Time Flatby Michael Masterson How to Get Rich: One of the World's Greatest Entrepreneurs Shares His Secrets by Felix Dennis Trading Reminiscences of a Stock Operator by Edwin Lefèvre One Good Trade: Inside the Highly Competitive World of Proprietary Tradingby Mike Bellafiore Market Wizards, Updated: Interviews With Top Tradersby Jack D. Schwager Biographies Andrew Carnegieby David Nasaw Titan: The Life of John D. Rockefeller, Sr.by Ron Chernow The First Tycoon: The Epic Life of Cornelius Vanderbiltby T.J. Stiles Anything by Joseph J Ellis specifically: Founding Brothers: The Revolutionary Generation His Excellency: George Washington The Quartet: Orchestrating the Second American Revolution, 1783-1789 Many of these titles can be downloaded FOR FREE with Amazon KindleUnlimited: More from LibertyLOL: |
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