The Politico commentary email had this summary of Trump's tax returns this morning:
TRUMP TAX BOMBSHELL: A blockbuster New York Times investigation dropped last night: The paper got hold of Donald Trump's tax returns going back two decades. Here are the story's five top lines …
TOP LINE 1: Trump paid $750 in income tax the year he won the presidency. He paid another $750 in his first year in the White House.
TOP LINE 2: In 10 of the previous 15 years, he paid no income tax at all.
TOP LINE 3: He did this despite raking in hundreds of millions of dollars a year, the NYT reports, by racking up huge losses to avoid tax. His top businesses lost millions per year – he blew $70,000 on “hairstyling” alone.
TOP LINE 4: Trump faces an audit over a $73 million tax refund he received after declaring massive losses – an adverse ruling could cost him over $100 million.
TOP LINE 5: Within the next four years, Trump faces more than $300 million worth of loans coming due.
From all I have read, that seems as good a summary of the New York Times story as there is. I should add, Trump deniers it all.
But just suppose that the denials are wrong. Suppose, instead, that this is a fair reflection of Trump's tax returns. What does they then say?
The first, and most obvious possibility, is that Trump is not a successful business person, at all. Instead he is an arch manipulator of borrowed funds, using them to give the appearance of a successful business career when he is, in fact, simply accumulating debt that he might well be unable to repay. The possibility that this might arise during the course of a second term in office is particularly worrying: how can the President go bankrupt?
The second, and again quite obvious interpretation of this information is to suggest that Trump is a massive tax avoiders, who takes what UK tax barrister Clair Quentin would describe as aggressive and uncertain tax filing positions to avoid paying tax in the first instance in the hope that this will not be noticed by the tax authorities, and with the aim of arguing for many years if they are, with the overall objective of deferring tax payment for as long as possible. It would seem that Trump is succeeding in this objective.
There is, however, one important point of commonality to note, whichever of these two positions is true. Both, absolutely fundamentally, suggest that Trump is a free rider. Investopdeia defines the free rider problem in this way:
The free rider problem is the burden on a shared resource that is created by its use or overuse by people who aren't paying their fair share for it or aren't paying anything at all. The free rider problem can occur in any community, large or small.
Of course, you could also simply describe free riders as those willing to cheat to secure those things to which they are not entitled. I prefer that version. And it would seem to very appropriately describe Trump.
Trump would appear to be living off borrowed money rather than money that he has earned.
And, to facilitate this, he is also taking substantial tax risk to reduce or eliminate payments owing in order to support an extravagant lifestyle.
There should be nothing surprising about this. This is the logic at the core of tax haven activity, after all. It is the so-called free marketeers position. And, as is becoming readily apparent, populist politicians have as their primary objective the personal enrichment of themselves or their friends, which is a simple variation on the free rider problem. Those without ability are seeking to secure riches by abusing the state, and in the process all the rest of us.
The New York Times has done us a great service by publishing this story. Trump could, of course, simply deny the claims in one very simple, and effective way: he could publish his tax returns. I very strongly suspect that he will not.
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He of course says it is “fake news”. So the simple question is “how much did you pay them”? He does not need to disclose his tax returns to state definitely the amount of tax he paid in dollars each year, although it would be good evidence of course. If he does not provide evidence then I think we are entitled to draw adverse inferences (and in this case I think the principle of taxpayer confidentiality is overridden by the public expectation of disclosure).
Just like our prime minister, Trump is lazy, immoral, a liar and a cheat, and it stains others in his party (particularly the so-called Christian Right) to be associated with him.
So, some of the rich are not really rich because they are in debt so they hate tax and get out of paying it in order to pay down their debts or just stay on the right side of solvent?
Is anyone surprised? I’m not. Paying down debt has been competing with paying tax in this country for example that has led to massive tax evasion for ages. Everyone I I know who avoids/evades tax has huge property or business debt.
What we need is more real money and less credit. Higher wages and better pensions would be a start.
But maybe people will stop seeing the poor as free riders which they have done for far too long?
As for Trump, the numbers have never seemed to add up to me – and I’m no accountant by any stretch of the imagination.
“The New York Times has done us a great service by publishing this story. ”
I thought you were against publishing individual tax return details? Would you support a newspaper that obtained your tax return details and published them? Or does your support or condemnation depend on your like or dislike of the individual concerned?
US Presidents have published their tax returns since the 70s
Somewhat different from advocating it for every one
Which is something I have not d0one
You were hedging your bets there Jack!
Must try harder!
Donald “Madeoff” for President!
https://en.wikipedia.org/wiki/List_of_Ponzi_schemes
What “price” democracy?
“Richard Neal, D-Mass., the chair of the House Ways and Means Committee who has tried unsuccessfully to obtain Trump’s tax records, said the Times (New York Times) report makes it even more essential for his committee to get the documents.
‘It appears that the President has gamed the tax code to his advantage and used legal fights to delay or avoid paying what he owes,’ Neal wrote in a statement. ‘Now, Donald Trump is the boss of the agency he considers an adversary. It is essential that the IRS’s presidential audit program remain free of interference.’ ”
https://abcnews.go.com/Business/wireStory/ny-times-trump-paid-750-us-income-taxes-73280930?cid=clicksource_4380645_1_heads_hero_live_headlines_hed
Why do you not get rid of the BUM? He is destroying the Republican party and worst he is destroying the country.
@ Paul Beaulieu
It would appear both the UK and US are similarly afflicted as far as “econocide” is concerned!
How can a president go bankrupt? Easily. The Constitution does not protect a sitting president from every eventuality. And the creditor will go after a Trump company. Any association he has with said company will make no difference.
I consider the USA to be beyond recovery.
The rest of the world is financing its debt.
No, using its currency, and that’s a mistake
Just like the UK will have to when it gets it ‘world beating’ trade deal with the U.S. who always insist on trade partners (or is it victims?) settling with dollars.
Our dollar holdings will have to go up – we will have to purchase the dollars BTW and then all of a sudden we’ll have lots of our pounds in a currency that we have no control over (controlled by the Fed). Even though we astutely avoided going into the Euro!
I wonder what our BREXITEER friends think about that with their cockeyed notion of ‘sovereignty’?
This blog featured in the Guardian:
https://www.theguardian.com/us-news/2020/sep/28/donald-trump-a-bad-businessman-or-a-tax-probably-both
Except Rupert Neate is wrong in one important detail. The New York Times has not published his tax returns. The journalism is based on data from them. Dean Baquet, the executive editor, explains they didn’t do so:
An Editor’s Note on the Trump Tax Investigation https://nyti.ms/2G7SJx4
Trump’s not going to be keen on leaving the White House with all that unpayable debt hanging over him. Once he loses what might be called his executive privilege, he’s toast. I expect a real tussle getting him to leave the premises should he lose.
“If you owe your bank a hundred pounds, you have a problem. But if you owe a million, it has.”
― John Maynard Keynes
That’s always been my view – I have seen bank managers sweat far more than their customers when the debt was unmanageable.
Alas I have never had the bottle to borrow large enough to get to that position.
I don’t think anybody will be coming to his rescue. Americans know all about taxes. They know what a pain in the butt it is having to file their not so straight forward tax return by mid April every year! Many of the British on the contrary were relieved of this pain a long time ago!
Alas, it seems that Trump’s core support will not see this as a problem.
What is needed on both sides of the pond, is for the suckers to realise they have been hoodwinked. I am not convinced that Biden can convey that. Probably best left to an episode of the Simpsons – the one dedicated to the steel workers of America being a particular favourite.