Trump’s Tax Avoidance Scandal

Contrary to Trump’s claims on multiple occasions that he has paid millions of dollars in taxes, it has recently been revealed by the New Times that over the past one and half decades, Trump has managed to avoid paying taxes most of the time and his total tax payment was much lower than an average blue collar worker. This appalling revelation has prompted many to question the fairness of the US tax system. To understand more about the US tax system, you may sign up for economics tuition Singapore with a reputable economics tutor Singapore. Edmund Quek is the best economics tutor Singapore. His economics tuition Singapore centre, Economics Cafe Learning Centre is conveniently located within five minutes’ walk from the Bishan MRT Station.

An Act Of Malfeasance

Many believe it is simply an act of malfeasance or a game played by the superrich to avoid paying taxes. According to news report, Trump only paid $750 in federal income taxes in the years of 2016 and 2017 respectively. In addition, in the past 15 years, he avoided paying any taxes for 10 years, by claiming losses from his various business entities. With guidance from your economics tutor Singapore in economics tuition Singapore, explore the different possibilities how Trump has managed to avoid paying taxes.

There is no doubt that Trump has made the best use of the various loopholes in the US tax system. Some tax experts have pointed out two possibilities. First, Trump has been using write-offs to minimize his tax liabilities. It takes further probing or investigations to confirm if these write-offs are legitimate ones resulting from real losses. However, chances of Trump making almost zero profit in the past one and a half decades are very slim. Therefore, the second possibility is more likely to be the case, that is, Trump has been using bogus write-offs to avoid paying taxes. You may consult your economics tutor Singapore in your economics tuition Singapore class about the definition of tax evasion and its consequences in the US and in Singapore.

Tax Contributions By The Superrich

Having said all these, it is not unusual for the superrich in the US to engage a team of capable lawyers to explore ways of reducing their tax liabilities. Based on the IRS (Internal Revenue Service) data, the top 400 income earners in the US make a collective contribution of over 20 per cent of federal income taxes in the US. However, according to the Washington Post, in 2018, the richest 400 families in the US paid an average effective tax rate of 23 per cent, lower than the average tax rate of 24.2 per cent, paid by the working class. It is estimated that if Trump has made tax payments as a normal taxpayer in the US, he would have paid about US$100 million in taxes in the past 15 years. Mr Edmund Quek is the best economics tutor Singapore who are renowned for incorporating real world events into his economics tuition Singapore. You may attend the economics tuition Singapore by this economics tutor Singapore for an in-depth analysis on tax systems in the US and Singapore.

It is reported that Trump has gone bankrupt six times in the past. Despite his financial record, Trump has managed to secure from the various financial institutions a total loan of over US$1 billion. According to news report, Trump must repay a sum of over US$300 million in loans in the next four years. Trump’s portfolio is estimated to be worth a total of US$2.5 billion, which includes office towers and golf courses, among others.

Linda Geng

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