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Old 09-28-2020, 10:51 PM
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Default No, you idiots. That’s not how taxes work. – an accountant’s guide to why you are a g

A touch of funny with a whole bunch of reality...



NO, YOU IDIOTS. THAT’S NOT HOW TAXES WORK. – AN ACCOUNTANT’S GUIDE TO WHY YOU ARE A GULLIBLE MORON

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I posted that last night on Facebook, and sure enough, this morning my feed is filled with people who don’t know **** about taxes retweeting the stupid opinions of other morons who also don’t know **** about taxes. This is just as annoying as last week when these same idiots all suddenly became Constitutional Scholars. Or the month before that when they were all experts on use of force laws and police tactics. Or the month before that when they suddenly got their epidemiology degrees from the University of Internet and turned into infectious disease experts.

Holy ****, you Dunning-Krugerands are annoying. Of course the comments are all about the “morality” of paying your “fair share”. Which isn’t how any of this works in real life. Just stop it with your vapid hot takes already. You clearly have a child-like grasp of a complex topic, and your words are making America dumber.

As a former accountant, please allow me to explain why all of today’s newly formed tax experts are ****ing morons, and we should metaphorically put a brick in a sock and beat them over the head with it until they shut up.

I’m going to keep this blog post simple. I’m not going to get into any of the specifics of the leaked Trump taxes. Why? Because:

We don’t know how full of **** the NYT is, and you don’t do taxes based on rumors and innuendo. You do taxes based upon financial statements and the company’s books.
This **** is super complicated and my happy ass is retired and likes getting paid more money to write books instead of reading through thousands of pages of IRS regs.
So big picture time…

First off, “morality” doesn’t have jack **** to do with taxation. You pay what you legally owe. Nobody willingly pays the government more than they legally owe.

This has always been this way since America has had income taxes. There is endless court precedent. You pay what you legally owe. That’s it. If you pay less than you legally owe, then the government will fine or imprison you. If you pay more than you legal owe, the government will laugh and laugh, because you are an idiot, and you deserve to be poor.

Every single person who barks about how somebody else should be paying more? They themselves are paying the minimum they can get away with. As they should. As should you.

I remember when I was taking my first tax class back in college. This class was all accounting majors by this point. At the beginning of the semester the professor (who’d had a long career as a tax guy) gave us an imaginary family as our clients and had us do their taxes. One kid didn’t take advantage of all the obvious deductions for his clients. When the professor asked why, the kid said some mushy thing about how he didn’t think it was FAIR to keep that money from the government… Holy ****. The professor ripped this kid a new *******. HOW DARE YOU!?! IT IS NOT THE GOVERNMENT’S MONEY! IT IS YOUR CLIENT’S MONEY. YOU OWE THEM YOUR BEST! IT IS YOUR SACRED DUTY TO SAVE THEIR MONEY! YOU DISGUST ME AND YOU SHOULD NEVER BE A CPA!

That class was one of my favorites.

Basically, you pay what you owe, no more, and anyone who claims otherwise is full of ****.

Second, “loopholes” is a term most often used by people who don’t understand accounting or tax law, to complain about how somebody else used the existing laws created by congress to pay less than what that person thinks is “fair.” Regular people have heard the bull**** term loopholes tossed around so much that they start to believe that it is some magical easy button that rich guys can just push that makes it so they don’t have to pay taxes.

Nope. They’re just laws. These “loopholes” exist because at some point in time congress (both democrat and republican both!) decided that they wanted to promote some type of behavior or discourage some other behavior. So they basically put a reward into the law saying if you do this thing we like, you’ll pay less taxes! Or the opposite, congress wanted to discourage some behavior, so if you do that thing we don’t want, it will cost you more.

Both sides have done this forever, state and federal. We want you to drive electric cars so if you buy an electric car you get a tax break this year. YAY! Uh oh, we want you to stimulate the economy by buying this kind of machinery faster, so you have to depreciate your assets this other way or you’ll pay more! BOO! You get a discount for paying your employees health insurance, YAY! Oh, wait… Not that kind of health insurance. BOO!.

So on and so forth, up and down, these perks come and go, all based upon whatever behavior congress is trying to promote at that time (or what favors they are doing for their friends). Why was mortgage interest deductible? Because at one point congress said “we really want people to own houses!” Even regular people have things that are considered “loopholes” to somebody.

So when the blue check mark journalism major (who probably dropped out of PoliSci because “there’s too much math”) declares that it is immoral that some rich dude didn’t pay his fair share because he used loopholes, those are basically a bunch of meaningless buzz words strung together to prey on the feelings of the gullible.
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Old 09-29-2020, 05:08 AM
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Default Re: No, you idiots. That’s not how taxes work. – an accountant’s guide to why you are

"Basically, you pay what you owe, no more, and anyone who claims otherwise is full of ****."

I kind of agree with that statement. The reason I say kind of is because I remember back in 2011 Warren Buffet claiming he paid a lower percentage rate in taxes than his secretary and whining how that wasn't fair.That man made a conscience decision to take advantage of every tax law he could in order to pay the least amount he can and then had the gall to whine how he was paying less a percentage rate than his secretary. If he truly felt that way then he shouldn't be taking advantage of every tax break he can and just paid 37% or more if he felt 37% was not enough. Its like a person who hates food stamps but uses them or a eco-tard who says he hates cars but uses his car to drive two blocks to work instead of walking or riding a bike.
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Old 09-29-2020, 08:16 AM
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Default Re: No, you idiots. That’s not how taxes work. – an accountant’s guide to why you are

Quote:
Originally Posted by jamesrage View Post
"Basically, you pay what you owe, no more, and anyone who claims otherwise is full of ****."

I kind of agree with that statement. The reason I say kind of is because I remember back in 2011 Warren Buffet claiming he paid a lower percentage rate in taxes than his secretary and whining how that wasn't fair.That man made a conscience decision to take advantage of every tax law he could in order to pay the least amount he can and then had the gall to whine how he was paying less a percentage rate than his secretary. If he truly felt that way then he shouldn't be taking advantage of every tax break he can and just paid 37% or more if he felt 37% was not enough. Its like a person who hates food stamps but uses them or a eco-tard who says he hates cars but uses his car to drive two blocks to work instead of walking or riding a bike.

Warren Buffet was saying those things to ingratiate himself with those on the left. Notice that he made a big deal about it, but at no time did he really DO anything about it.
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Old 09-29-2020, 08:20 AM
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Default Re: No, you idiots. That’s not how taxes work. – an accountant’s guide to why you are

In the classic Stalinist tradition of show me the man, I'll show you the crime, Democrats have created another unique offense to hysterically denounce Trump for violating, tax avoidance. It doesn't matter that the practice of minimizing your tax liability is virtually universal, Trump is "guilty" of using the tax code "loopholes" to avoid paying his "fair share".
It's a made up offense with guilt determined by partisan political opinion.

Remember when Romney released his tax return for a recent year in response to Harry Reid's criminal slander that he'd paid no taxes for 10 years? Turns out Romney had directed his accountant not to claim some charitable contributions to boost his tax liability. This effort to pay his so-called fair share was derided by Democrats as manipulation. All that is needed is an accusation to a made up crime if the target is a Republican.

After the election Harry Reid boasted that his lie helped Obama get reelected. The media chuckled.
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Old 09-29-2020, 02:04 PM
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Default Re: No, you idiots. That’s not how taxes work. – an accountant’s guide to why you are

Quote:
Originally Posted by GetAClue View Post
Warren Buffet was saying those things to ingratiate himself with those on the left. Notice that he made a big deal about it, but at no time did he really DO anything about it.
And it gave him protection from the left, and the media.
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Old 09-30-2020, 05:43 AM
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Default Re: No, you idiots. That’s not how taxes work. – an accountant’s guide to why you are

Anyone here ever read "Rich Dad Poor Dad"?

there are several statements that the "rich dad" makes about taxes.
One has to do with how the rich ALWAYS try to pay less taxes or NO taxes. they have several ways of doing it. but summed up.
1 they have lobbyist deal with the congress to MAKE the laws that are more favorable to them.
2 they have accountants and lawyers exploit those laws to fullest extent possible.
3 they realize that if they have Assets that make money for them they can keep more cash than if they earn more hourly in an hourly wage. the Assets generally have more tax protection and much of their personal life/biz can be written up as biz expenses.

What do the middle class have, H&R block.

"Rich dad" mentions that since the creation of the tax codes the Rich have been figuring out ways not to pay them or the least amount. Always have always will.
Many people try to sell the public on the idea the the tax code is "fair", truth is it never was and never will be.
People like the late New York real estate heiress and hotelier Leona Helmsley in 2003 made it clear the idea the rich have about taxes
'Only the Little People Pay Taxes'
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Old 09-30-2020, 05:58 AM
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Default Re: No, you idiots. That’s not how taxes work. – an accountant’s guide to why you are

"An important point that isn’t emphasized is that among the vast majority of Trump’s supporters, not paying taxes isn’t even an option, regardless of how much they might want to chisel the IRS.
FICA taxes are automatically deducted, and the employer automatically files a W2. The option of setting up tax-exempt foundations, shell companies, and engaging in transfer pricing simply does not exist for these folks."

Also major corps are also famous for paying ZERO taxes.

60 of America's biggest companies paid no federal income tax in 2018
https://www.cbsnews.com/news/2018-ta...tax-last-year/

Bailed-out banks paid no income tax in some years, according to study
https://publicintegrity.org/inequali...ding-to-study/

Bank Of America Paid Nothing In Federal Income Taxes Last Year And Got Almost $1 Billion From Taxpayers
https://archive.thinkprogress.org/ba...-207309a6b45a/

How Fortune 500 Companies Avoid Paying Income Tax
https://www.investopedia.com/news/ho...ng-income-tax/



But hey, I'm sure if those big corps didn't pay zero taxes that they'd all cease to exist! Since they only survive on razor thin margins plus and if they paid more than minimum wage to the lowest workers, that'd just be to horrible to bear.
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Old 09-30-2020, 07:37 AM
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Default Re: No, you idiots. That’s not how taxes work. – an accountant’s guide to why you are

Quote:
Originally Posted by mr wonder View Post
"An important point that isn’t emphasized is that among the vast majority of Trump’s supporters, not paying taxes isn’t even an option, regardless of how much they might want to chisel the IRS.
FICA taxes are automatically deducted, and the employer automatically files a W2. The option of setting up tax-exempt foundations, shell companies, and engaging in transfer pricing simply does not exist for these folks."

Also major corps are also famous for paying ZERO taxes.

60 of America's biggest companies paid no federal income tax in 2018
https://www.cbsnews.com/news/2018-ta...tax-last-year/

Bailed-out banks paid no income tax in some years, according to study
https://publicintegrity.org/inequali...ding-to-study/

Bank Of America Paid Nothing In Federal Income Taxes Last Year And Got Almost $1 Billion From Taxpayers
https://archive.thinkprogress.org/ba...-207309a6b45a/

How Fortune 500 Companies Avoid Paying Income Tax
https://www.investopedia.com/news/ho...ng-income-tax/



But hey, I'm sure if those big corps didn't pay zero taxes that they'd all cease to exist! Since they only survive on razor thin margins plus and if they paid more than minimum wage to the lowest workers, that'd just be to horrible to bear.
Once again, you rail about corporations doing tax avoidance as if they are somehow bad people for doing such. What you fail to address is that they are actually following the tax code. If you want to hold someone accountable, start with Congress. They are the ones that write the tax code, not the corporations or private citizens.
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Old 09-30-2020, 08:05 AM
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Default Re: No, you idiots. That’s not how taxes work. – an accountant’s guide to why you are

Quote:
Originally Posted by GetAClue View Post
Once again, you rail about corporations doing tax avoidance as if they are somehow bad people for doing such. What you fail to address is that they are actually following the tax code. If you want to hold someone accountable, start with Congress. They are the ones that write the tax code, not the corporations or private citizens.
I'm just stating the facts, and the facts happen to put the corporations in a bad light from time to time.
light tends to exposes corruption.
and BTW...
Corporate lobbyist write the tax code for congress folks who make it law.
Corporate lobbyist have outsized influence over tax code that congress folks make into law.
Corporations support and donate well to congress people friendly to corporate bottom lines.
Why are you trying to spin it to make it seem as if corporations hands aren't deep up congresses back sides?
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Old 09-30-2020, 11:17 AM
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Default Re: No, you idiots. That’s not how taxes work. – an accountant’s guide to why you are

Quote:
Originally Posted by mr wonder View Post
I'm just stating the facts, and the facts happen to put the corporations in a bad light from time to time.
light tends to exposes corruption.
and BTW...
Corporate lobbyist write the tax code for congress folks who make it law.
Corporate lobbyist have outsized influence over tax code that congress folks make into law.
Corporations support and donate well to congress people friendly to corporate bottom lines.
Why are you trying to spin it to make it seem as if corporations hands aren't deep up congresses back sides?
Bad light? The point of the thread is that so-called bad light is often the product of ignorance based in political positions. According to the Left the tax code doesn't matter, the rich don't pay their so-called fair share. Naturally there is no precise definition of how much fair share actually is, that would disarm the fiery but hollow rhetoric of blind condemnation.

Let's look at 2 simple but key components underlying corporate tax calculations.

Just like individuals who suffer losses on investments corporations use loses to offset tax liability. Like individuals corporate losses can be carried forward. The fair share crowd would tax losses in the name of social justice.

Depreciation is the concept that capital equipment and facilities wear out with use. Most individuals understand the concept of depreciation in terms of their automobile. Depreciation allows businesses to accrue funds to replace worn out equipment. Individuals don't get depreciation for the most part.

It's easy to condemn businesses for using the tax code to minimize their liabilities without suggesting any reforms to the tax code.
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