How is it that a millionaire can pay hardly any income taxes — or none at all — while most people, earning far less, owe more?
Meanwhile, in 2017, a typical nurse earning an average of $70,000, paid $5,400 in federal income taxes, according to Americans for Tax Fairness, a coalition of labor groups and organizations advocating for progressive tax reform. Trump’s ability to pay far less than the average working American was largely made possible because of how he structured his businesses, a vast array of tax breaks that are available to real estate developers, and incredibly large business losses and charitable gifts that he took as deductions to offset his profits, according to the Times report. Trump is not alone in taking advantage of these opportunities, but he is certainly the outlier, said Steven M. Rosenthal, a tax lawyer and senior fellow at the Tax Policy Center. „Trump is either the world’s worst businessman or a tax cheat or maybe something of both,“ said Rosenthal. While some wealthy tax filers may see permission — why can’t I do that, too? — in the way Trump apparently prepared his taxes, that is not the way the wealthiest Americans typically approach their taxes, according to tax experts. How to get a multi-million dollar tax bill down to zero Wealthy people have money to take big bets, either in their investments or their businesses. When they go big and lose, they can take a capital loss or a net operating loss. And if the loss is big enough, they can use it to greatly reduce or even wipe out their entire tax bill in a given year. Sometimes taxpayers can even carry unused amounts forward to future tax years. As the Times reported, Trump was able to avoid paying taxes for years because of a massive net operating loss of $916 million in 1995 that was spread out until 2005, thereby wiping out any taxes he owed. „Can the little guy do this? No,“ Rosenthal said. „You need all sorts of partnerships and pass-throughs.
