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Can’t we develop an AI to provide some analysis of the tax code on behalf of working Americans? Part of the advantage for the rich is that it is so large and complicated, most people can’t afford the lawyers and accountants to take advantage of it.
If there is a Grad student reading this, I am pretty sure you’d find a good audience and a lot of support for this kind of project.
This reminds me, the chinese billionaire benefactor on whose megayacht steve three-shirts bannon was arrested, has been in jail since March 15th. No bail for you! At least, not yet. His attorneys just proposed a $25 mil bail package with house arrest. The prosecution says “woefully inadequate”. https://abc7ny.com/guo-wengui-chinese-billionaire-fraud-case-court/13083197/
Teachers can’t deduct crayons they buy for their classroom, but rich fucks can fly all over the world and the same fucking teachers have to pick up the tab by paying more in taxes.
When can we start eating the fucking rich? They’re useless otherwise.
These seem like good opportunities for putting the burden of proof on the entities wanting these tax deductions. It shouldn’t meaningfully impact the less wealthy as flying on a private jet or riding on a yacht is not exactly a regular activity for average Americans.
Raise the limit on private jet usage to 100% for business to take the tax credit (meaning any non-business use of the jet would invalidate the credit). Give them an option to allow non-business use of the jet as long as they separate and subtract those costs from what they deduct as a business expense.
Chartering businesses (whose revenue is solely/primarily via use of their aircraft/yachts/etc) that lose money two years in a row are presumed to not be legitimate profit generating businesses, unless proven otherwise, and can’t be deducted.
The wealthy can still fly in their private jets or ride on their private yachts, but shouldn’t be able to deduct that from their taxes when their isn’t a direct business-related activity.
There are already rules about how often you have to make money to not be a fake business, but the problem is that (especially with good accountants) they can be gamed indefinitely. Make a little money one year, lose a pile the next, rinse and repeat. What you would want is some kind of rule where, say, you have to have a cumulative profit over some set of years to be deductible. And then you’d have to figure out a way to do that without screwing real startup businesses, where someone might invest for 5-10 years before a product started making money. (Perhaps by allowing all those losses to be carried forward indefinitely, I don’t know.)
(I have to admit, I have a little bit of sin in this direction myself. Back when I was a writer with a day job and the occasional freelance gig on the side, I would deduct that new PC I used for the freelance gigs, or part of my home internet connection. And some years I might not take the full deduction set to make sure that I showed a profit so as not to be disallowed. But it would take more than 10,000 of me to come close to even on of these folks.)
You deducting a few thousand annually on a new PC and internet connection is not a problem. Mr. Musk and friends using his “business plane” to jet-set his family and friends to exotic destinations around the world and deducting the costs is.
Maybe the solution is just to cap the max possible deduction per year to a much lower amount.
This story is really not news. The business deductions available in the USA is a well-known racket that allow small and huge corporations to deduct ridiculous items. That’s why many corporations pay no taxes.
This is also one of the reasons behind the growth of ridiculous SUVs and pickup trucks. Many bought by people’s businesses and deducted, because offroad dentistry and legal practice are such a crucial part of the economy. Not as big individually as the jets and the yachts and the vacation homes (aka rentable conference centers), but still a problem.
(I was just thinking: some of the rules about vacation homes probably encourage the super-rich – if you’re not allowed to spend more than a few weeks a year in a house without losing the deduction, then obviously you need to have even more houses to spread your time out )
I came here to make a similar comment to yours, @paulw. .
Mostly, I’d add that it’s been my understanding (for decades) that any business activity that failed to make a profit 2 years out of five was considered a hobby and disallowed.
…two years of profit over an eleven-year period.
ETA: Holy crap!?! According to IRS Publication 535 (Chapter 1, page 7), it’s actually THREE years out of five!?!
“Presumption of profit. An activity is presumed carried on for profit if it produced a profit in at least 3 of the last 5 tax years, including the current year. Activities that consist primarily of breeding, training, showing, or racing horses are presumed carried on for profit if they produced a profit in at least 2 of the last 7 tax years, including the current year. The activity must be substantially the same for each year within this period. You have a profit when the gross income from an activity exceeds the deductions.”
There should be no tax deduction whatsoever for any business expense. Ever.
The organization already gets more than enough tax break when the expense is subtracted from revenue, therefore decreasing profit and with it, the taxes owed.
No theory of nothing or other says the organization should get two or seventeen tax breaks for the same purchase.
This is why the rightist states are ditching ERIC, the interstate clearinghouse created to prevent people from double voting in different states. The single biggest group of illegal double voters, is Republicans voting twice at their vacation properties.
While I don’t disagree with the spirit of your argument J.A., teachers can deduct a paltry $300 for classroom materials purchased out-of-pocket. They can also deduct the cost of aviation fuel necessary to take an annual trip to the Cook Islands for R and R each June in their personal Gulfstream V (just need to find that one in the tax code).
Is this exempt from itemizing? Because the standard deduction was also raised in order to force millions of people from itemizing. So, I wonder if this is a bait-and-switch because how many teachers even make enough money to itemize? Even so, $300 is a fucking joke.