For a number of months now Donald Trump has refused to release his tax returns for public review, and the speculation has been that he either pays no or minimal federal taxes or that he gives very little to charity. Over the past month revelations about the Trump Foundation being used to buy six foot oil paintings of Donald, making illegal political contributions and paying off private lawsuits with Foundation funds indicate folks were right about Trump and charity.
Now the New York Times reports that Trump may also have been able to avoid paying any federal tax for almost two decades based on 1995 state tax returns for CT, NY and NJ and almost a billion dollars of business losses.
The 1995 tax records, never before disclosed, reveal the extraordinary tax benefits that Mr. Trump, the Republican presidential nominee, derived from the financial wreckage he left behind in the early 1990s through mismanagement of three Atlantic City casinos, his ill-fated foray into the airline business and his ill-timed purchase of the Plaza Hotel in Manhattan.
If you take a loss in one year on your federal tax form the only result for that year is that you don’t pay federal income taxes. However, the feds allow you to spread that loss over a period of 18 years — three before and 15 after — to offset future income. This meant that from 1992 to 2010 Donald Trump could have made $916 million in adjusted income and paid no federal income taxes.
And the experts hired by the NY Times say this is very likely.
“He has a vast benefit from his destruction” in the early 1990s, said one of the experts, Joel Rosenfeld, an assistant professor at New York University’s Schack Institute of Real Estate. Mr. Rosenfeld offered this description of what he would advise a client who came to him with a tax return like Mr. Trump’s: “Do you realize you can create $916 million in income without paying a nickel in taxes?”
And let’s not forget that while Trump was blithely taking his losses to offset his profit making enterprises, small businesses and contractors in New Jersey were getting screwed by the Donald.
[The losses offset the] $45 million he was paid between 1995 and 2009 when he was chairman or chief executive of the publicly traded company he created to assume ownership of his troubled Atlantic City casinos. Ordinary investors in the new company, meanwhile, saw the value of their shares plunge to 17 cents from $35.50, while scores of contractors went unpaid for work on Mr. Trump’s casinos and casino bondholders received pennies on the dollar.
The Trump campaign went into full Dada mode with this ridiculous response:
“Mr. Trump is a highly-skilled businessman who has a fiduciary responsibility to his business, his family and his employees to pay no more tax than legally required,” the statement said. … The statement continued, “Mr. Trump knows the tax code far better than anyone who has ever run for President and he is the only one that knows how to fix it.”
Translated from the absurd, they’re saying that losing a billion dollars on failed investments and management is the result of highly-skilled business practices.
Further translated from the absurd, they’re saying that Donald Trump is qualified to fix the federal tax system because he knows how to cheat the tax system.
This is the guy who, in the first debate, stated that hoping to profit off market failures is “good business” and avoiding taxes “makes me smart.”