Related: Robert Reich posted earlier today that Tesla paid ZERO taxes on $5 billion in sales (earnings?), so that’s just fucking great.
this post was submitted on 03 Feb 2026
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That only matters when the value of those deductions exceeds the standard deduction though, isn't that right?
No, deductions for business expenses happen "above the line" so they reduce your taxable income. The standard deduction happens "below the line" and is applied to your taxable income after business expenses etc
Yes and for the purposes of reducing taxable income, not the overall tax burden.
An example in a vacuum: If you report $10,000 and itemize a $2000 deduction for an expense, you'd be taxed as if you made $8000.
Some take it to believe the $2000 deduction means they deduct $2000 from what they owe in taxes and then feel cheated and blindsided when they still owe.
The standard deduction is just under $16,000. So if we round things out: the tax bracket for the first $10,000 of taxable income is a 10% rate. If you made $26,000 you'd owe $1000 with the standard. (26k minus 16k, leaving 10% of 10k.)
In this same scenario if you could itemize $26,000 in deductions on $26,000 of income, you'd owe $0. No one self employed or any worker can actually do this reasonably. But large businesses can, and do.
This is how billionaires pay no taxes. They use their business expenses, loans, and losses to deduct the entire amount of their taxable income to eliminate any possible tax burden.
Above the line deductions reduce your taxable income, from there you take the standard deduction or itemize. You are conflating two separate events
Yes, that's how I always understood it