Rudy Giuliani, a key adviser to Donald Trump on Sunday, October 2, called the Republican presidential candidate a "genius" and suggested Trump hasn't released his taxes due to concerns people might misinterpret them, a day after a New York Times report suggested Trump may have been able to avoid paying taxes for up nearly two decades.
Trump declared a $916 million loss on his 1995 income tax returns and the large tax deduction may have allowed him to avoid paying federal income taxes for up to 18 years, the New York Times reported on Saturday, October 1.
Trump's familiarity with the tax code would make him better suited to reform it and remove loopholes, Giuliani said.
"He understands the tax code better than anyone else," Giuliani said, adding, "a lot of the people that are poor take advantage of loopholes and pay no taxes. Those are loopholes also."If having too little income to pay income tax is a "loophole," perhaps he is right. But if he is referring to tax deductions, he is mostly wrong.
Scott Greenberg writes at The Tax Foundation:
As tax filing season gets underway, many taxpayers are figuring out whether to take the standard deduction or to itemize. How many Americans choose each option?
According to the most recent IRS data, for the 2013 tax year,
These statistics show that most American taxpayers choose to take the standard deduction. However, this is not the case for higher-income taxpayers. When it comes to households with incomes over $75,000, a significant majority itemizes deductions:
- 30.1 percent of households chose to itemize their deductions (44 million returns).
- 68.5 percent of households chose to take the standard deduction (101 million returns).
- 1.6 percent of households had zero or negative adjusted gross income, and were unable to take any deductions. (2 million returns)
The IRS data shows a clear trend: the higher a household’s income, the more likely it is to itemize deductions. Only 6.0 percent of tax returns with under $25,000 in income chose to itemize deductions in 2013. On the flip side, 93.5 percent of tax returns with over $200,000 in income were itemizers.