No, You Idiots. That’s Not How Taxes Work. – An Accountant’s Guide To Why You Are a Gullible Moron

I posted that last night on Facebook, and sure enough, this morning my feed is filled with people who don’t know shit about taxes retweeting the stupid opinions of other morons who also don’t know shit about taxes. This is just as annoying as last week when these same idiots all suddenly became Constitutional Scholars. Or the month before that when they were all experts on use of force laws and police tactics. Or the month before that when they suddenly got their epidemiology degrees from the University of Internet and turned into infectious disease experts.  

Holy shit, you Dunning-Krugerands are annoying. Of course the comments are all about the “morality” of paying your “fair share”. Which isn’t how any of this works in real life. Just stop it with your vapid hot takes already. You clearly have a child-like grasp of a complex topic, and your words are making America dumber.

As a former accountant, please allow me to explain why all of today’s newly formed tax experts are fucking morons, and we should metaphorically put a brick in a sock and beat them over the head with it until they shut up.

I’m going to keep this blog post simple. I’m not going to get into any of the specifics of the leaked Trump taxes. Why? Because:

  1. We don’t know how full of shit the NYT is, and you don’t do taxes based on rumors and innuendo. You do taxes based upon financial statements and the company’s books.
  2. This shit is super complicated and my happy ass is retired and likes getting paid more money to write books instead of reading through thousands of pages of IRS regs.

So big picture time…

First off, “morality” doesn’t have jack shit to do with taxation. You pay what you legally owe. Nobody willingly pays the government more than they legally owe.

This has always been this way since America has had income taxes. There is endless court precedent. You pay what you legally owe. That’s it. If you pay less than you legally owe, then the government will fine or imprison you. If you pay more than you legal owe, the government will laugh and laugh, because you are an idiot, and you deserve to be poor.

Every single person who barks about how somebody else should be paying more? They themselves are paying the minimum they can get away with. As they should. As should you.

I remember when I was taking my first tax class back in college. This class was all accounting majors by this point. At the beginning of the semester the professor (who’d had a long career as a tax guy) gave us an imaginary family as our clients and had us do their taxes. One kid didn’t take advantage of all the obvious deductions for his clients. When the professor asked why, the kid said some mushy thing about how he didn’t think it was FAIR to keep that money from the government… Holy shit. The professor ripped this kid a new asshole. HOW DARE YOU!?! IT IS NOT THE GOVERNMENT’S MONEY! IT IS YOUR CLIENT’S MONEY. YOU OWE THEM YOUR BEST! IT IS YOUR SACRED DUTY TO SAVE THEIR MONEY! YOU DISGUST ME AND YOU SHOULD NEVER BE A CPA!

That class was one of my favorites.

Basically, you pay what you owe, no more, and anyone who claims otherwise is full of shit.

Second, “loopholes” is a term most often used by people who don’t understand accounting or tax law, to complain about how somebody else used the existing laws created by congress to pay less than what that person thinks is “fair.” Regular people have heard the bullshit term loopholes tossed around so much that they start to believe that it is some magical easy button that rich guys can just push that makes it so they don’t have to pay taxes.

Nope. They’re just laws. These “loopholes” exist because at some point in time congress (both democrat and republican both!) decided that they wanted to promote some type of behavior or discourage some other behavior. So they basically put a reward into the law saying if you do this thing we like, you’ll pay less taxes! Or the opposite, congress wanted to discourage some behavior, so if you do that thing we don’t want, it will cost you more.

Both sides have done this forever, state and federal. We want you to drive electric cars so if you buy an electric car you get a tax break this year. YAY! Uh oh, we want you to stimulate the economy by buying this kind of machinery faster, so you have to depreciate your assets this other way or you’ll pay more! BOO! You get a discount for paying your employees health insurance, YAY! Oh, wait… Not that kind of health insurance. BOO!.

So on and so forth, up and down, these perks come and go, all based upon whatever behavior congress is trying to promote at that time (or what favors they are doing for their friends). Why was mortgage interest deductible? Because at one point congress said “we really want people to own houses!” Even regular people have things that are considered “loopholes” to somebody.  

So when the blue check mark journalism major (who probably dropped out of PoliSci because “there’s too much math”) declares that it is immoral that some rich dude didn’t pay his fair share because he used loopholes, those are basically a bunch of meaningless buzz words strung together to prey on the feelings of the gullible.

Joe Biden has been making shit like this up for forty something years now. Congress meddles in business and your personal lives to try to steer outcomes. And as a result the tax law just keeps getting bigger and bigger, and more complicated and confusing, until it is the bloated leviathan we have today.

How big is the US tax code? NOBODY KNOWS! (and I’m only partially kidding with that answer, because there’s thousands of pages of actual laws, and I don’t think anybody can actually pin down how many thousands of pages there are of supporting documentation and IRS regs and findings that translate those broad laws into the nitty-gritty real world application accountants have to deal with).

It is this complexity that makes it hard to figure out what anyone actually owes. The more complicated your affairs, the more of these laws you run into, the more “loopholes” you may be able to take advantage of.

We’ve already determined, nobody willingly pays more than they owe. The real problem is determining what you actually legally owe. And this is where it gets sticky. Because the laws are very complex, the more complicated your finances, the more likely you are to have confusion over your taxes.

Let me give you an example. I can’t remember the exact details because this was over 20 years ago, but when I was getting my accounting degree we learned about this challenge someone did, where they got something like a hundred different tax preparers, ranging from Big 5 (back then)firms, medium size firms, small firms, individual CPAs, TurboTax, H&R Block, the works… to do the taxes of the same hypothetical family of five. This family had a small business, some investments, some rental property, so on and so forth, but nothing super complicated. Then they had the hundred different preparers do their taxes… And they got a hundred different answers of what they owed that year. And each of those answers could be argued as being correct… And yet each of those answers could also be determined as wrong by an IRS auditor.

Sometimes there is confusion about what can or cannot be deducted. Some things are clear. Others are questionable. Some things the IRS has clearly stated are good to go, others you make your best guess, and then hope the auditor doesn’t disagree. There is an old tax preparer saying, pigs get fat, hogs get slaughtered.

Which brings us to today, with people freaking out about how Trump allegedly didn’t pay taxes for 10 out of 15 years and how that’s UNFAIR. Assuming that the anonymous tip isn’t total bullshit—and this is the New York Times we’re talking about and they love to just make shit up—and that the information is accurate (which means that whoever leaked it committed a felony, but that’s a whole different discussion)… my answer is so?

Is it plausible that a billionaire paid no taxes for a period of several years? Yep. Totally. See all that stuff I wrote above about the complicated tax code and how it is an accountant’s sacred duty to take advantage of all the stupid laws congress has passed to save their client’s money? Pretty much that. It has happened many times before, and it will happen many times again.

One thing that’s really unfair about our tax system is that it is rigged in favor of people who have more resources. Government meddling makes it more costly to conduct business. The more complicated the regulatory burden, the more smaller companies can’t compete. Make the laws complicated enough and the only companies that stay in business are the ones who can afford to pay for twenty guys like me. (my last regular accounting job paid extremely well, and nearly everything I did was jump through government mandated hoops, filling out government mandated paperwork which nobody in the government would probably ever read)

Trump has those resources. I bet he’s got a room full of accountants, and their leader is probably a grizzled old CPA with an eye patch and a raven who sits on his shoulder. The raven also has an eye patch and an accounting degree. This man has wrestled bears, and he’s going to take advantage of every tax break in the US Code for his client, and do so gleefully, knowing that many of those laws were signed by Barack Obama and Bill Clinton.

On the other side, you know damned good and well that the IRS has sent their most fearsome auditor against him. This man sold his soul to the devil, and then fined the devil for failing to list that soul as a depreciable asset. When he shows up to audit your company, he appears a flash of fire and brimstone, as a Finnish death metal band plays his theme song. He is an auditor bereft of mercy, compassion, or pity, and beneath his leathery wings serve a legion of IRS goblins, who will crawl into every nook and cranny of the Trump Corporation’s P&L looking for errors, and if a mouse so much as shits a turd large enough to unbalance that ledger, there will be hell to pay.

Is it unfair that rich guys can employ Gandalf level CPAs and take advantage of more complicated tax laws, while regular people use TurboTax? Yep. But in the meantime, as long as those tax laws are there, the rich guys would be utter fools not to take advantage of them.

I recall a similar freak out several years ago when it came out that some giant mega-corp (I think it was GE, but I don’t remember) didn’t pay any taxes due to some Obama green energy tax breaks. Only that time the freak out was coming from the right (who hate Obama) and the Bernie Bros (who hate all business). It’s the same kind of thing though. If the laws are on the books, of course companies (and individuals) are going to take advantage of those laws. THAT IS WHY CONGRESS PUT THEM THERE.

Now, it is perfectly okay to get mad at congress for writing stupid laws and needlessly complicating everything with their endless meddling. But it’s stupid to get mad at the people for obeying the laws that are in place.

If it comes out that Trump broke the law, then it goes back to that soulless abomination from the IRS (which again, I say with all due respect, Mr. Auditor Sir, please don’t hurt me) to hook his ebony talons into the Trump Corp’s meaty flank, to pull it down and feast upon the carcass.

Why yes… During the course of my accounting career I did go through several audits with various government agencies. Why do you ask? 😀  (that said, the IRS auditing the various corporations I worked for was always way nicer than being audited by the DCAA. What a fucking nightmare clusterfuck that organization is. I’ve been through ATF audits and they were way better than the DCAA. Though for pure incompetent malfeasance, the SBA still takes the cake.)

That’s how it works. On one side CPAs, and the other, hellspawn audit demons, and they’ll argue, and battle, and go to court over what is and is not owed to the government, and then the client will pay what is legally owed plus any applicable fines and penalties (and not a dime more). Both sides of this titanic eternal struggle are far smarter than anyone at the New York Times and they have access to the actual financial data, unlike all the blue check mark idiots on Twitter who are whinging on today about their feelings. Barf.

Your feelings don’t mean shit. Same as the rest of us, Trump owes what he owes. And the IRS will determine if that number is accurate or not.

Destroyer of Worlds is out tomorrow!

Available in bookstores everywhere on September 1st (the audiobook had a production delay, but I will post as soon as I know that release date)

The Great Extermination has begun.

In the Capitol, Grand Inquisitor Omand Vokkan hatches a plot to kill every member of the untouchable caste in all of Lok, down to the last man, woman, and child. As a member of the Order of Inquisition, Vokkan has no official say in the creation of Law, but he has powerful allies willing to do his bidding. Through them, he has convinced the Judges that the genocide will be swift, complete, and without complication. Nothing is farther from the truth.

Lord Protector Devedas has sworn to uphold the Law. Once, he and the traitor Ashok Vadal had been like brothers. Now, he hunts Vadal and the Sons of the Black Sword, heretics and rebels who seek to live outside the rule of the Law. All Devedas must do is find and kill his best friend and order will be restored to Lok.

The rebels seek the secret kingdom spoken of by the Prophet Thera, a paradise where water is pure and food plentiful, where there are no castes, where the people rule themselves, and are not slaves to the Capitol. Ashok Vadal is not sure he believes in such a Paradise, but he—along with his allies—do seek refuge in the rebellion’s hideout in Akershan. But Vadal, a former High Protector who has turned his back on the corrupt Law, will not merely wait meekly, hoping that fleeing to Akershan will spare the rebellion from the clutches of the Great Extermination. No, if it’s a war the Capitol wants, Vadal, who has faced down gods and demons, will be all too willing to give it to them.

Destroyer of Worlds

 

Destroyer of Worlds

About House of Assassins:

“Correia piles on the intrigue, action, and cliffhangers in the invigorating second Saga of the Forgotten Warrior epic fantasy. . . . Correia also weaves in elements that question the value of belief and the cost of giving authority to those who find more profit in preying on the weak. . . . Brisk fight scenes, lively characters, and plenty of black humor continue to make this series a real pleasure.”—Publishers Weekly

About prequel Son of the Black Sword:

“This book has everything I like in fantasy: intense action scenes, evil in horrifying array, good struggling against the darkness, and most of all people—gorgeously flawed human beings faced with horrible moral choices that force them to question and change and grow.”—Jim Butcher, creator of the New York Times best-selling Dresden Files

“Best-selling fantasy author Correia casts a compelling spell with this India-influenced series opener. . . . Correia skillfully sets in motion this story of plots within plots, revealing complex, sympathetic characters and black-hearted villains with equal detail and insight. Full of action, intrigue, and wry humor, this exciting series launch promises many more thrills to come.”—Publishers Weekly (starred review)

“Fans who like Correia’s fast-moving style will be pleased with the plethora of action scenes, and epic fantasy readers interested in delving into a new universe should be equally satisfied.  A solid choice for admirers of Brent Weeks and Brandon Sanderson’s Mistborn series.”—Library Journal

“Correia is, above all, a storyteller, and he weaves a unique and entertaining tale. Without question, his action sequences pop on the page, his magic system has a nice wrinkle, and he has the foundations laid out for some excellent character growth as the series continues. . . . [A] definite hit.”—Bookreporter

“The lore here is fascinating and well told. I enjoyed learning the history of the world and the legend of Ramrowan. The politics are just complicated enough to feel real without being too difficult to follow. Where the book truly shines, however, is in the characters. All are well drawn and distinctively voiced.”—SFCrowsnest

“I loved the book, it was great, fast paced, with wonderful characters, and also a lot of wonderful scenes that screamed to be painted.”—Larry Elmore, legendary, award-winning artist, and cover artist for Son of the Black Sword.

Son of the Black Sword: Saga of the Forgotten Warrior tells of what happens after the war with the gods, when demons were cast out and fell to the world to nearly destroy these unstoppable beasts until the gods sent a hero to save them. Centuries have passed since this event and the people have regulated these events to legend. One Ashok has been chosen to be a protector with a powerful weapon in hand, uncovering those who still practice old ways and are potential dangers to the order – but when he discovers all his efforts have been based on a lie, everything’s about to change. A powerful epic fantasy evolves into a solid, compelling read.”—Midwest Book Review