When my house burned in 2012, I was compensated by the insurance company for my loss. But not all the way. I had about $175,000 in uncompensated losses.
IRS rules specify that your losses can be used to reduce your taxable income. Any amount of loss not used in one year can be carried forward into future years to reduce your taxable income in those years.
Because of this provision of the tax code, I have not paid any income taxes since 2012. I may not pay any federal income taxes again, as I still have carry forward losses that I haven’t used.
Obviously, anyone will use this part of the tax code if that person has losses. Both Donald Trump and Hillary Clinton have allegedly had such losses and used the tax code to legally avoid paying federal income taxes.
But only Donald Trump is being smeared for it. By hypocrite Hillary and her water carriers at the New York Times.
Try smearing me, you bitch!
Well this is a little awkward. With the leaked 1995 Trump tax returns ‘scandal’ focused on the billionaire’s yuuge “net operating loss” and how it might have ‘legally’ enabled him to pay no taxes for years, we now discover none other than Hillary Rodham Clinton utilized a $700,000 “loss” to avoid paying some taxes in 2015.
While not on the scale of Trump’s business “operating loss”, Hillary Clinton – like many ‘wealthy’ individuals is taking advantage of a legal scheme to use historical losses to avoid paying current taxes.
As Bloomberg notes, this federal tax break is among the wealthy’s most used avoidance schemes…
Those 1.1 million folks in the 1 percent, as measured by the TPC, have annual income that averages a little less than $700,000. The top one-tenth of that group, some 110,000 households, average about $3.6 million, according to Howard Gleckman, a senior fellow at the TPC.2
The middle of the pack, some 33 million people, have pretax income ranging from $45,000 to $80,000. The lowest one-fifth of taxpayers, a universe of about 47 million Americans, have income up to about $24,000.
Among the biggest of these givebacks, courtesy of the Internal Revenue Service (well, really Congress), are capital gains and dividends—these are the biggest way the wealthiest benefit.
In the words of Hillary Clinton’s campaign manager, “this bombshell report reveals [Hillary Clinton’s] past business failures… and may show just how long [Hillary Clinton] may have avoided paying taxes.”
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Finally, as we noted previously, the NYT itself is also perfectly happy to take advantage of the US tax to minimize the amount of money it pays to the government: in 2014 the company got a tax refund of $3.6 million despite having a $29.9 million pretax profit, an effective negative tax rate for 2014, which it explained was favorably affected by approximately $21.1 million for the reversal of reserves for uncertain tax positions due to the lapse of applicable statutes of limitations.