Warren Buffet Proves Donald Trump Wrong: Some Billionaires Pay Taxes
During the second presidential debate, Donald Trump made the claim that not only did he used the $916 million loss from his 1995 tax returns to avoid paying taxes for eighteen years, but “all of [Clinton’s] donors” do the same.
When asked by moderator Anderson Cooper whether or not he used that billion dollar loss to offset federal income tax payments for nearly two decades, Trump said: “Of course I do. Of course I do, and so do all of her donors, or most of her donors.”
Trump named Warren Buffet, saying he “took a massive deduction”.
Buffet responded to Trump , saying: “Trump says he knows more about taxes than any other human. He has not seen my income tax returns. But I am happy to give him the facts.”
As of the 2015 tax year, Buffet revealed his “adjusted gross income” as $11,563,931. His deductions totaled $5,477,694; including charitable deductions of $3,469,179.
Buffet’s federal income tax total for 2015 was $1,845,557. The billionaire stated that he has “paid federal income tax every year since 1944, when I was 13.”
In conclusion, Buffet revealed that he has “been audited by the IRS multiple times and am currently being audited” and reminded Trump that releasing tax return information while under audit poses “no legal problem”.
Last year, according to Buffet’s statement, his federal income tax rate was 16%, which is one number higher than then Trump has recommended in his tax plan. Considering Buffet’s fortune is estimated at $65 billion, paying just $1.8 million in taxes in 2015, this proves that the wealthiest Americans already enjoy a massive tax break.
Trump’s call for a further reduction of tax paid by the 1% means that Buffet could pay much less than he does now, effectively giving the wealthiest Americans a huge tax break.
Buffet put Trump in his place, saying: ““I have copies of all 72 of my returns. And none uses a carryforward.”
Journalist Steve Edner pointed out that Trump’s 1 billion dollar loss is attributed to net operating loss, a loophole that “an array of deductions, business expenses, real estate depreciation, losses from the sale of business assets and even operating losses to flow from the balance sheets of those partnerships, limited liability companies and S corporations onto the personal tax returns of people like Mr. Trump.”
But in addition to avoiding paying taxes, Edner noted that Trump “lobbied federal lawmakers to relax tax rules that he claimed had strangled the real estate industry” in 1991 which paved the way for his now infamous tax debacle.
Trump as able to evade paying federal income tax because “one provision allowed real estate investors with highly leveraged properties to accept forgiveness of their bank loans without paying taxes on the money, in exchange for giving up other tax benefits. Another allowed them to apply some real estate losses against other kinds of income.”