Trump’s Tax Returns
Those who have been following this space for several years know my position on income tax returns.
And they’re complicated. The tax returns of a man whose empire includes 500 separate businesses and 26,000 employees? Beyond complex.
Little wonder Donald Trump is being audited.
Audit or not, when we file with the Internal Revenue Service we have a right to expect that our personal financial information will not become public. That’s goes for the rich and the poor.
Anyone who leaks - “steals” is a better term - our information commits a felony.
And that’s what’s happened. Someone with access to Donald Trump’s tax returns has stolen them and leaked them to The New York Times.
Let’s be clear about what’s going on: Government officials are committing federal crimes to influence the outcome of this presidential election. Frankly, that concerns me way more than allegations that Donald Trump’s businesses hemorrhaged so much money that he didn’t owe any federal income taxes for years.
Look, Trump has refused to release his tax returns. He’s not required to make them public.
You’re free to infer whatever you like from any candidate for president who balks at letting you see his or her income tax returns.
Trump’s lawyers insist he’s paid millions in taxes and that the Times sources are wrong. The Times won’t show the documents it relied upon because they were stolen and the sources would be headed to federal prison.
So there’s that.
Most people don’t understand how taxes work, anyway. How could we? The Internal Revenue Code, part of the U.S. Code, was 6,550 pages long in 2017, according to PolitiFact. It’s longer than that now.
In addition, there were 60,000 pages of case law involving federal taxes and 7.7 million words in tax regulations.
There’s a reason even ordinary folks hire tax preparers. The mega-rich hire armies of them.
This much I do know: When you compare the income taxes most workers pay with the income taxes of business owners you’re comparing, well, businesses with individuals.
Not the same.
Here’s how The Washington Post explained it:
Most Americans’ tax payments to the IRS are derived from the income they receive from their wages and salaries from the employer. In this traditional formula, Americans’ employers — often formed as a “C-Corp,” or corporation — also pay a separate additional tax payment to the IRS on the corporate tax rate.
By contrast, Trump runs his firms as “pass-through” entities. This legal structure — such as an “S-Corporation” or “Limited Liability Corporation” — requires business owners to report both the income and losses from their business operations on their personal tax returns. There are almost 30 million pass-through entities in America.
For those in the back, this is LEGAL. And there are 30 million others filing the same way as Trump in the U.S.
Their goal is the same as ours: To pay as little income tax as is legally possible. And, yes, businesses are able to write off items that ordinary taxpayers cannot.
Blame Congress. They write the tax laws.
On Sunday afternoon, two days before the first presidential debate and after obtaining purloined tax information about Trump, The Times published a story alleging that the president didn’t pay taxes for 10 years, due to heavy losses in many of his businesses, especially his golf courses.
Within two hours the Biden campaign had a slick ad ready, based on that reporting.
Coincidence? Not a chance.
Late Monday night the Times released another installment. Stop the presses. Seems the newspaper discovered that “The Apprentice” made Trump millions and rescued his other businesses.
I read the Times pieces. What struck me was that despite lots of insinuations, the newspaper found no evidence of illegal behavior by Trump. Neither did it show any nefarious dealings with Russia.
Naturally, House Speaker Nancy Pelosi - whose own tax returns would make interesting reading - griped on Monday that Trump “abused” the tax code.
Memo to Pelosi: You and your Congressional cronies wrote the damn tax code. Stop yapping.