Let’s (briefly) talk about tax (and Donald Trump).
Your (foreign) correspondent is very comfortably ensconced in the spare bedroom of her darling friend in Geneva. Reviewing my Facebook newsfeed – as well as giving me the most recent memory of my son and his girlfriend looking totally adorable going to a ball last year – was someone sharing this:
It discusses that Donald Trump claimed a $915 million loss in 1995 that could then be offset against any taxable income for the next 15 years.
Now the thing dear readers is – as I discussed in ‘The apple doesn’t fall far from the tree’ that is technically totes possible in New Zealand too. Putting capital into a business – spending it on business expenses – and then losing it will give you future losses to offset against other taxable income. But unlike in the US if you sell the business – rather than the company – for a capital gain the company keeps the losses and gets a capital gain that can be distributed tax free on liquidation.
And if it is done through a Look through Company the losses and the capital gains can pass through to the individual shareholders.
Now all of this could be totes fabulous as a means of encouraging entrepeneurship and innovation or simply entrencing dynastic behaviours. Couldn’t tell you.
Maybe Grant something for your ‘Fairness’ working group?