Saturday, March 18, 2017

Donald Trump Should Buy Me a New Shirt

In preparation for the change of the very confused seasons, I bought a few new short sleeved shirts to wear at work and retired a few veterans.  One of the things I really like about buying from Walmart online is the ability to return stuff easily at the store.  Purchasing from some of their "partner" sellers removes this ability - always read the fine print.  The fine print gets worse; if I return something, I will be refunded my purchase price, less the original free shipping cost (and possibly an additional small fee).
One of the shirts I bought is slightly smaller than I prefer.  Perhaps it will motivate me to lose the winter blubber more quickly.
One of the shirts is quite a bit uglier than it appeared in the picture online and is prohibitively small.

A partial dump of Donald Trump's 2005 income taxes was shared on the internet.  I won't defend President Trump (for anything), but the requisite for any presidential candidates to release taxes has always struck me as somewhat odd.  I'd be quite resistant to interview with a company if I had to share my finances first.  And while a public official may justifiably be treated differently, it isn't clear where this line would be drawn.  The president must release taxes?  How about all senators?  And members of Congress?  Unelected bureaucrat?  Chief of police?  Police deputy?  Civil servant mailman?
Looking at President Trump's taxes, what I'm struck by most is how ordinary they look.  I expected a totally different, crazy form or all those lines I always leave blank to have confusing numbers in them.  Not only are they ordinary, they'd be boring if the scale of the numbers wasn't so bloated.


I can't speak for anyone else, but I don't pay any more taxes than I can squeak by with.  I'm hoping to avoid last year's tax fiasco, but this year I had to figure out some new-to-me deductions - thanks to the ill-timed maturing of a few Unit Investment Trusts.  My first attempt at investments outside of my 401(k) did not go well...  I'm not the president so I won't release my numbers, but in contrast, Donald Trump grossed $152.7 million in 2005, with business losses of $103.2 million.  There is an astounding amount of criticism over this deduction bringing his Adjusted Gross Income to $48.6 million.
Donald Trump is doing the same thing as 122,000,000 other adults in the US are doing - paying as little income tax as can be done legally.  If I could have legally written off $103.2 million, I would have.  To be clear, in my life I'll never earn $103.2 million, nor even $48.6 million, nor even the $38.4 million Mr. Trump paid in 2005 income taxes.
Warren Buffett is often the darling rich to those on the left as he complains that he doesn't pay enough taxes.
But even ignoring President Trump's deducted losses, he paid 25.1% of his $152.7 gross income in taxes, contrasted with Mr. Buffett's 17.4% - which is stated as payroll taxes inclusive so actual income tax is presumably less.  Yet no criticism for Warren Buffett just because he complains about his low tax rate?  It could be pointed out that the Treasury will take any money sent to it, so Mr. Buffett is free to send as much money as he wants to the federal government.  His criticism of federal taxes is really not suggesting he should pay more tax, but other people like him should.
Accounting for Donald Trump's assumed justified $103.2 million loss, he paid a shocking 79% of his Adjusted Gross Income in taxes.

There is a lot of tax misinformation in the United States.  We have neither a progressive nor regressive tax system - a confusing tax system that can only come from years of compromise.  Too often, we compromise ourselves into complexity.  An astounding 45% of adults do not pay federal income tax.  None.  The big Zipola.  Somewhere between most and all of these people are at the bottom of the income scale, not the top.  And while the rich (President Trump and Warren Buffett inclusive) as a percentage of their actual income might pay less than the average worker, they pay a phenomenal amount in real terms.
The median income in the united states is often reported to be around $50 thousand.  That results in a federal income tax of around $5000.
So it will take 7680 average workers to equal Donald Trump's $38.4 million in taxes, or a mere 1400 average workers to equal Warren Buffett's $6.9 million tax bill.

As the platitude speaks, "A fine is a tax for doing poorly.  A tax is a fine for doing well."

There will be much more gnashing of teeth over Donald Trump's 2005 taxes.  It should really be looked at through the same lens we all see through when filling out form 1040.
I'd love to know what Mr. Trump's $17.9 million in itemized deductions are.  I don't want to make this a whole left/right Obama/Trump thing, but President Obama's 2015 $36,587 in mortgage interest deduction is actually more than my first house even cost.  Nope, not criticizing, I just find it humorously incomprehensible.  Whether Donald Trump or Barack Obama or Warren Buffett, the scale of the numbers can be sometimes hard to put into perspective.

I don't think either President Trump or Warren Buffett are buying their shirts discounted from walmart.com.  Actually, maybe Warren Buffett might, since he is reported as so notoriously cheap.  I think cheap to a guy who pays $6.9 million in tax means something different than it does to me though.
And me?  I'm stuck with two shirts that I have some regrets over.  Returning them is not worth it given the pain of return policies and cost of shipping - I'll not buy again from the Walmart partners.  One shirt I'll probably wear and grouse about it every time I put it on.  The other I will donate to Good Will; at least I'll be able to deduct that from my taxes next year.

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