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We now know---via leak and implicit White House confirmation---that President Donald Trump paid $36.6 million in federal income taxes on $153 million in income in 2005, for a 24% effective rate, reported Forbes (US).
But given Trump’s income and his membership back then and now on the Forbes list of the 400 richest Americans, was that rate high, low or average for his peer group? And how does it compare to yours?
Data from the Internal Revenue Service provides some intriguing answers. In 2003, inspired by the Forbes 400, the IRS began publishing an annual report on the 400 tax returns reporting the highest adjusted gross income. (Unfortunately, in December the IRS announced it was ending the report.)
While there's no doubt considerable overlap, it should be noted that the folks who land on the IRS 400 aren't all the same as those on the Forbes 400. Some of the nation's very wealthiest, such as Berkshire Hathaway CEO Warren Buffett, currently #3 on the Forbes list, hold down their reported AGI by realizing few capital gains.
Still, the IRS 400 provides some useful comparisons, suggesting that Trump’s effective tax rate was higher than average for the uber-rich, but only because of the alternative minimum tax. Without that backup tax system---which Trump proposed eliminating during the campaign ---his tax burden would have been abnormally low.
In 2005, the IRS 400 had an average adjusted gross income of $214 million and paid income tax averaging $39 million each, for an effective tax rate of 18.23%. But of that $39 million tax tab, only $1.4 million, on average, was due to the AMT. By contrast, the AMT made up $31.3 million of Trump’s total taxes. Without the AMT, his taxes would have been a paltry $5.3 million and the tax rate on his income just 3.5%, instead of 24%.
For sake of comparison, in 2005, IRS figures show, the average tax rates for all income groups ---except those with AGI under $10,000---was greater than 4%. Middle class taxpayers with AGI between $50,000 and $100,000 paid an average of 9%. Those between $100,000 and $200,000 paid 13% on average, while those between $200,000 and $500,000 paid 20%. The rate peaked at 24% for those earning $500,000 to $1 million.
How did the IRS 400 get away with paying a lower rate in 2005 than those earning $200,000 to $1 million, without getting clobbered with AMT as Trump was? Some 60% of the IRS 400’s AGI came from realizing capital gains and dividends which were taxed in 2005 at a top rate of just 15%, compared to the 35% top rate for “ordinary” income, including wages, self-employment earnings, interest and the sort of pass through business income and rental income that made up most of Trump’s earnings.
(The current top rate on capital gains is 20% and on ordinary income, 39.6%. There's also an added 3.8% surtax on net investment income for couples with income in excess of $250,000; the House Republican bill to repeal and replace Obamacare would eliminate that surtax as of January 1, 2018.)
In 2015 numerous publications including Fox News, Bloomberg, and Forbes reported that George Soros owed billions of dollars in unpaid taxes after finding ways to avoid the IRS, reported The American Lookout (US).
Fox News reported: George Soros may soon face a monumental tax bill — of nearly $7 billion — after years of playing hard-to-get with the IRS.
Despite Soros having advocated for higher taxes on the wealthy, the liberal billionaire reportedly has delayed paying his own for years thanks to a loophole in U.S. law.
That loophole was closed by Congress in 2008. But before that, Bloomberg reports, Soros used it to defer taxes on client fees. Instead, he reinvested them in his own fund, and they grew tax-free.
Bloomberg, citing Irish regulatory filings, reported that Soros has made $13.3 billion in this way. Factoring in the various tax rates that would apply, one tax expert estimated this would leave Soros with a roughly $6.7 billion bill.
While Soros did not comment on the estimate, Bloomberg reported that Soros deferred his taxes for so many years by reinvesting client fees. While he technically was able to do this for U.S.-based funds, offshore funds were apparently preferred because otherwise clients would face negative tax implications.
The American Lookout did some digging around the internet and could NOT find any articles showing that Soros had paid this massive tax debt.
Forbes reports that Donald Trump has an estimated net worth of $4.5 billion which would mean that George Soros potentially owes more money than Donald Trump is worth.
show source https://www.forbes.com/sites/janetnovack/2017/03/15/how-trumps-2005-tax-tab-compares-to-other-billionaires-and-to-yours/#5d4d7aa66622 http://americanlookout.com/rms-flashback-george-soros-owed-7billion/