By now, we have all discovered that the Trump Campaign is just dripping with mis-statements, spin, and outright lies. Evidently, Trump and his minions in the form of "spokespersons" have determined that a lie repeated over and over magically becomes truth. The last time that we witnessed this strategy and phenomenon was in Germany in the 1930s and 1940s. The current Trump lie set was prompted by the NY Times revelation that Donald Trump claimed a massive tax loss and deduction of more than $900 million in 1995. Under loss carry-forward tax rules, that would have had the effect of virtually wiping out any tax liability for The Donald for the next 18 years! And, of course, we do not know whether he claimed this deduction each year thereafter... because he has refused to release his tax returns to date. We do know, however, that during the first Presidential Debate, the issue of the release of Mr. Trump's tax return was brought up in the discussion between the moderator and Hillary Clinton as well. Trump fell back on his often-repeated cover that he is under IRS audit and will release his returns as soon as the audit is over. Of course, we know that the law does not prevent Trump from
releasing his returns. That is a
personal choice that he is making.
Clinton, on the other hand, suggested an alternative theory – that he is
HIDING something. Because he will not
release his returns, she guessed that he may be hiding the fact that he either
isn’t as rich as he claims, does not give as much to charity as he has said,
owes a great deal of money to foreign interests like Russia, or, in fact pays
no taxes at all. Here is the punch line….
Instead of Trump saying such things as “I pay what I owe”, or “I pay my fair
share like everyone else”, or “Of course I pay taxes”, he made a very revealing
comment. When Hillary charged that he
paid no taxes at all, Trump said, “and that makes me very smart.” Some might ask, and what does that make the
rest of us?
Needless to say, the NY Times story that followed days later resulted
in a firestorm of press reports repeating the story that Trump likely paid no
taxes in 18 years. As any campaign
would, the Trump campaign sent its spokespersons into the field to respond to
this charge. These included Rudy Giuliani,
Chris Christie and others. And, what was their comment? Did they defend Trump
by saying that he paid his legal share of taxes? Nope.
The common thread, spread all over the networks and the on-line media is
– Trump is “brilliant” and “a genius” in his use of the tax laws of the US,
evidently, to avoid paying his fair share of taxes. Why do I say “evidently”? Because we do not know for sure insofar as he
continues to hide his returns. Why? His spokespersons seemingly justify this tax avoidance behavior
by stating over and over that “the United States has the highest tax rates in
the world.” So far, the media has not
called them on this outright lie. And, in spite of the Trump Campaign insistence
that the media should not be “fact-checkers” and point out or question
statements made by the campaign that are blatantly false, they should do
so. If not the print and electronic media
fact-checking, then who? The opposing
campaign? And, then the Trump campaign
would simply respond that the Clinton campaign is lying, setting up a “he said,
she said” see-saw. Without question, the media is positioned to be the arbiters
of fact in a dispute between feuding campaigns, and they should perform that
important role.
So, let’s take a look at the FACTS about where the US stands
on taxes as compared to the rest of the world.
Remember that Giuliani, Christie and other Trump folks are clearly
stating over and over that the US has the “highest taxes on the planet.” Taxes are discussed as two distinct rates-
actual tax rates and effective taxes paid, after allowable deductions and
credits. The data below – from non-campaign sources – reviews both personal taxes
and corporate taxes.
PERSONAL
TAXES
1.
Established in 1961 and headquartered in Paris,
the Organization for Economic Cooperation and Development (OECD) asked the
question where do people pay the highest slice of their earnings to the tax
man? The answer is, Belgium at
42.8%. Six other nations follow such as
Germany, Austria, and the UK. The US
ranked 8th with a rate of 22.7, nearly half the rate of Belgium.
This data is expressed in effective tax rates.
2.
KPMG, a respected accounting firm, released a
study in 2013 indicating that the US ranked 55 out of 114 nations comparing tax
rates on an income of $100,000, certainly not the highest on the planet.” When
measured against GDP, the Tax Policy Center in the US ranks the US 31st
in developed nations, 25% below the average national rate (US @ 27.3%, OECD 34
@ 36.2%).
3.
The Tax Foundation in the US calculated comparative
tax rates from 13 studies and found that not one of those studies indicated
that the US had the highest effective tax rate.
So, you might say, maybe the Trump Campaign means the actual tax rate and not the effective tax rate. The highest US rate all in is 39.6% for the wealthiest in the nation. Other national raw statutory rates before deductions fall considerably higher than the US rates. Germany stands at 47.50%, France at 50%, UK at 45%, Italy at 49%, Portugal at 56%, and Spain at 46%. Asian rates include Japan at 51%, China at 45%, Australia at 47%, and Taiwan at 45%. In fact, the US ranks 37th in a list of highest to lowest RAW RATES of personal taxation, certainly not “highest on the planet.”
CORPORATE TAXES
1.
According to Business Insider in their
September 28, 2016 edition, the World Economic Forum released its “Global
Competitive Report” ranking the nations of the world for competitiveness. One
element measured is the tax on corporations.
The report listed the top 25 nations with the highest taxes on
corporations – and the United States is not on the list!
2.
The US tax rate on businesses is at 35% - a
figure used by the Trump campaign in arguing that the rate should be 15% to
encourage job growth. Often those who argue “high” business tax rates in the US
conveniently exclude other taxes levied elsewhere such as the Value-Added tax
(VAT) common among European nations or a variety of excise taxes.
3.
In 2011, the Congressional Research Service
reported that the US effective rate was 27.1%, lower than the other OECD rate
average of 27.7%.
No matter how you slice it – personal taxes or corporate and
business taxes – the US does NOT have the
“highest taxes on the planet.” No wonder the Trump Campaign doesn’t want the
media to “fact-check.”
Trump evidently
prefers to operate in a fact-free zone.
After all, this approach has worked for him
throughout his career and in
his life. Maybe - just maybe - the big lie will get him elected President of
the United States in 2016. Time - truth - and your votes - will tell the tale.
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