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It-s-All-About-

Trump's tax troubles

I arrived back from another trip to the U.S. today and must admit it was a little overwhelming to be there and turn on the TV to see nothing but Donald Trump coverage.

It was either rampantly supportive or equally as negative. What is for sure, by design or by accident, Trump is a master of TV ratings and many media outlets are having a serious bump in viewership as a result.

I was stunned by the reference to the recent New York Times article with two words associated with the reporting – tax evasion.

To qualify right up front, you will, if you get caught, very likely face an unsettling future including possible jail time if you evade taxes. 

Journalist speaking about the article were saying everything that Trump had done was tax evasion. Of course, it makes a good headline, just like New York Times article, but in fact, from what I read, it is not at all true. 

The challenge in my mind comes from the fact that the word evade and avoid sound very similar and may be defined similarly, but in tax law, they are quite different.

It is the word “avoid” that is an inappropriate descriptor.

Evading taxes is illegal. It is ignoring your legal liability to the taxman. It is illegally structuring systems that hide taxable income and incorporates elements of tax management that are considered illegal.

Avoiding taxes is quite the opposite. It is sound management of your financial affairs within the context and the regulations of the tax system. 

One example was the Trump family setting up an intermediate logistics company to source, purchase and supply their real estate company with products required on a day-to-day basis for the efficient running of the real estate empire.

The commentators were stating that this is a classical tax-evasion ploy used by rich people around the world to hide money and make more money. 

Two things that rub me the wrong way are:

  • this is likely not evasion (not knowing all of the facts makes it hard to make the determination), it sounds extremely reasonable and plausible.
  • it is not only “rich” people, it is sensible people who have a professional accountant advising them on how to manage their tax affairs.

While I would not be surprised if there were all kinds of erroneous accounting within Trump’s affairs, the only conclusion you could draw from the article in my mind is that Trump is not as much a self-made billionaire as he would have us believe — and that is not new news.

What is even more interesting is that the news anchors talk about "those rich people” as if the anchors themselves eat in the same restaurants as you and I (normal people!) do.

They live in New York or Washington and with salaries as high as $15 million, so you can bet they have a professional accountant and a few tax structures that “all of those rich people” use.

And they eat in the most expensive restaurants in town.

Hypocrites!

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About the Author

Mark has been an entrepreneur for over forty years. His experience spans many commercial sectors and aspects of business. He was one of the youngest people to be appointed as a Fellow of the prestigious Institute of Sales and Marketing Management before he left the UK in 1988.

His column focuses on ways we can improve on success in our lives. Whether it is business, relationships, or health, Mark has a well-rounded perspective on how to stay focused for growth and development.

His influences come from the various travels he undertakes as an adventurer, philanthropist and keynote speaker. More information can be found on Mark at his website www.markjenningsbates.com

He is a Venture Partner with www.DutchOracle.com a global Alternative Investment company.

Mark Jennings-Bates:
[email protected]
 

Photo credit: www.SteveAustin.ca 



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The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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