The House Ways and Means Committee has released six years’ worth of Donald Trump’s tax returns. The returns revealed that Trump paid $0 in federal income tax in 2020. Many Americans were enraged to discover this, but what they may not know is that 60% of American households also paid $0 in federal income tax in 2020.
Not the Same
Unlike Donald and Melania Trump, American households who did not pay federal income tax did not have to because they earned less than the standard deduction. The standard deduction is $12,950 for single individuals and $25,900 for married couples who file jointly.
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The people who didn’t pay federal income tax did, however, still have to pay sales taxes, property taxes, as well as other types.
Americans who did not owe federal income taxes would have also had money deducted from their paychecks for Social Security and Medicare.
How the Rich Stay Rich
Trump and his wife reported paying $0 in income taxes in 2020, and the Joint Committee on Taxation also raised flags on his carryover losses, deduction-related tax write-offs and loans to his children that were reported as gifts.
The committee also agreed that it was odd that although the IRS is supposed to conduct mandatory audits of all president’s taxes, there was no audit conducted until Richard Neal, Chairman of the House Ways and Means Committee, requested it in 2019.
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Lacking in Resources
The lack of resources at the IRS was used as the reason for the failure to conduct the audits. An IRS memo described the process of auditing the president.
“Auditing the income taxes of the President of the United States is unlike auditing the income taxes of any other American. No one else has the power to sign bills into law—bills which could affect the President’s personal financial situation. Nor do they have the power to personally direct every department, agency, bureau, and office of the vast executive branch of government— opening limitless opportunities to affect the President’s personal finances. Unlike many nations, we operate a largely voluntary tax compliance system, supported by oversight and auditing,” the IRS said in an internal memo. “That means that our revenue system— and hence our democracy—hinge on public faith that our tax laws are administered fairly and without favor.”
This article was produced by Career Step Up and syndicated by Wealthy Living.
Featured Image Credit: Shutterstock / Christopher Halloran.