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Wealth & Economics > Hey! If Mnuchin, nominee for US Treasury Secretary can do it, so can I, right?

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message 1: by Alex (last edited Jan 19, 2017 09:28PM) (new)

Alex (asato) Hey! It isn't fair! After Mnuchin's made his millions, now he's going to close the loophole and now I can't have my own tax haven?
"He [Senator Wyden] also attacked Mr Mnuchin's use of tax havens such as Anguilla and the Cayman Islands to shelter hedge fund profits, questioning his qualifications to oversee a major revamp of tax laws to make them fairer to working Americans."

"Mnuchin, a former Goldman Sachs executive, hedge fund manager and Hollywood film financier, said he moved his Dune Capital Partners LLC registry to the Caymans to allow for some pension fund clients to invest in his funds, not to avoid taxes.

"But Mnuchin, 54, added that it "makes no sense" for the U.S. tax code to encourage the use of such entities. "In the hedge fund world these are only set up to make the accountants rich and I would love to work with the IRS to close these tax issues that make no sense."
Anyone have any contrary information? Or are the 0.1% attempting to padlock the country club doors?

Tara Woods Turner | 2063 comments So his investors couldn't do the same in the US? as I say, peasants, not as I do lol.

message 3: by Nik (last edited Jan 20, 2017 02:07AM) (new)

Nik Krasno | 13834 comments Alex G wrote: "Hey! It isn't fair! After Mnuchin's made his millions, now he's going to close the loophole and now I can't have my own tax haven?..."

But of course, Alex, you can't!
Besides, what's the big surprise? If the allegations that Trump hasn't paid much taxes using losses 'shield', i.e. offsetting losses from many years before are correct, why can't a prospective Treasury Sec excel in the same? -:) But I don't really know Mnuchin's achievements or lack thereof and as I understand the Senate confirmed his nomination, didn't it?
Generally speaking:
Can one working on the payroll offset his/her losses from years as a student or unemployed, from profits made in more successful years? NO
Can anyone working on payroll realistically make taxation planning? Not really, for usually their income is taxed at the source, i.e. an employer withholds the amount of tax, before the money is paid to an employee.
But biz and proprietors can. They calculate their own taxes. Very frequently any business idea of a sizable magnitude involves 'tax planning'. As you can imagine, it's not about simply paying taxes as due. It's about inventing a multi-jurisdiction structure to minimize or skip paying them altogether. And doing so allegedly LEGALLY, by the way. At least until some authority comes and says it's not, like EU did to Apple recently.
Is it appropriate that a person earning 100K annual salary, would pay relatively high taxes and another one making a few millions in biz pay 0? You decide.
Imo, it's pretty often that the middle class just pays for everything in many countries, because poor don't pay tax since they have little to pay it from and rich don't pay, because they know how to avoid it. Of course, it's a generalization and you don't need to understand it literally -:)
That's why you have all those loopholes in taxation laws. And that's why it would be very hard for a layman (it's even pretty hard for a lawyer or an accountant) to fully understand the taxation laws.
Is it easy to close all the loopholes? Sure, but you need a political will to do so.
It's all known figures about estimates of trillions of dollars sitting off-shore un-taxed and calculations of many billions of dollars that could alleviate or solve many problems, were those taxes collected.

message 4: by Ian (new)

Ian Miller | 9811 comments In most countries, getting an education is not considered suitable for tax deductions, and maybe that is unfair, but the argument is that the education is capital that enables higher income later. However, I think it is quite fair that losses in one year for a company (as well as for self-employed) can be used to deduct from future years. A payroll/salary is a guaranteed income that will be uniform (until fired) whereas if self-employed, it is quite possible for conditions to be so bad that one year can run at a loss. Also, some of the self-employed (and I was one) can get income in large but infrequent amounts and it is unfair if the tax you pay depends on the timing of someone else's payment.

It is reasonably easy to close loopholes - you just don't have special deductions. However, the rich would most certainly not approve of that.

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