The editors of the flailing NY Times have lost the plot and lost their minds. They have now run not one but two stories hailing tax shelters for and tax avoidance by the rich. OK, they hate Trump but really - what has happened to decades of progressive orthodoxy regarding "tax the rich"? weird.
The first story (from a week ago) assures us that high-tax Blue State leaders are lying awake nights scheming up tax shelters for the rich:
Democrats in High-Tax States Plot to Blunt Impact of New Tax Law
Democrats in high-cost, high-tax states are plotting ways to do what their states’ representatives in Congress could not: blunt the impact of the newly passed Republican tax overhaul.
Governors and legislative leaders in New York, California and other states are considering legal challenges to elements of the law that they say unfairly single out parts of the country. They are looking at ways of raising revenue that aren’t penalized by the new law. And they are considering changing their state tax codes to allow residents to take advantage of other federal tax breaks — in effect, restoring deductions that the tax law scaled back.
Left under-emphasized in this article (but not elsewhere) - these changes cause concern primarily to those with high property tax and state/local income tax bills. The Blue State working class will be seeing a tax cut. No new taxes on the rich! An unexpected progressive rallying cry, yet here we are.
This idea is creative:
Another idea would be to allow residents to replace their state income tax payments with tax-deductible charitable contributions to their state governments.
I know what you are thinking, if you are an active (or even casual) philanthropist - there are quid pro quo rules and disclaimers that make it impossible for me to, for example, "contribute" to a charity in exchange for seats behind the dugout at Yankee Stadium. So wouldn't that preclude the idea that I could contribute to a "state charity" and get instant relief on my state taxes?
Too Good to Be True? How State Charitable Tax Credits Could Increase Federal Funding for California
By: Phillip C. Blackman and Kirk J. Stark (Prof. Stark is noted in the NY Times piece)
Date Written: September 17, 2013
An IRS chief counsel memorandum published in 2010 found that a taxpayer was permitted to claim a charitable contribution deduction for the full amount of a gift, even thought a substantial portion of the gift was effectively refunded to the taxpayer through a charitable state tax credit. In this article, Blackman and Stark explain that the IRS memorandum permits states to adopt charitable tax credits that effectively enable taxpayers to convert state taxes to charitable gifts — a strategy that would be attractive to alternative minimum taxpayers.
No kidding. In 2013 the AMT angle was emphasized because normal high-income filers could get a full deduction the old-fashioned way. But the presumption in some circles is that the current legal guidance will still apply.
Of course, the legal foundation for that counter-intuitive guidance may shift. As to what the logic was, I am not a tax lawyer but I do notice that an Obama-era ruling helped guide Federal funds to California. Coincidence or politics? I don't know, but I sense a lack of outrage in this coverage of the tax shenanigans adopted by the California Legislature to exploit this ruling.
OK, no more taxes! We are moving on to the NY Times support for tax cheats and the Swiss bankers who enable them. Read this story about the Swiss private banker and his US clients and tell me who is portrayed sympathetically.
The gist - a few years back, US authorities moved hard on the Swiss banks with their secrecy laws, demanding info about US clients who might be cheating on their taxes. Big Swiss banks with banking operations and assets in the US had a lot of pressure points and eventually melted like Swiss chocolate on a radiator.
But a tiny private Swiss bank with no US presence stepped into the breach. The result is a gripping tale of greed, crime and possible punishment, but read it and see for yourself whether the Swiss private banker is depicted as a money-grubbing sleaze or a young man seizing opportunity and defying The Man.
For my money it was a weird story. I would have said the guy was a sleaze enabling tax cheats but the Times saw it differently. Strange times. I blame credit Trump.