Tax lawyer explains why rich people like President Trump pay less federal income tax
Tax lawyer Trey Gerhardt pointed out that business tycoons might not pay as much in federal income taxes based on the performance of their assets.
SAN ANTONIO – A San Antonio tax lawyer explained why the wealthy like President Donald Trump tend to pay less federal income taxes than the average American.
Trump would have paid $ 750 in federal income taxes in 2016 and 2017 and no income tax for another 10 years, according to a New York Times article.
“I think Warrant Officer Buffet said he pays less percentage tax than his secretary because he owns shares,” said Trey Gerhardt, tax law specialist.
The Congressional Budget Office reports that the average to middle-income U.S. household paid $ 2,200 in federal income taxes in 2016.
Gerhardt said the changing value of assets generating passive income could help reduce federal income taxes.
“You have to have money to make money and therefore you have to buy assets and you have to be able to own them. Real estate is an asset that you get deductions for its depreciation on, but we all know real life assets appreciate, ”said Gerhardt.
The subject of tax cases is expected to be one of six topics to be discussed during the first presidential debate on Tuesday. Gerhardt noted that Trump’s low tax burden could be largely linked to the performance of his companies.
“If his businesses haven’t been doing well, which I know in the past in Las Vegas and places like this, you can make a deduction from your income and therefore the only way businesses can be taxed. is to be profitable, ”he said. .
The highest tax bracket in the United States is 37%, which impacts single filers earning more than $ 500,000.