The New York Times ran this bombshell: Trump avoids taxes bigly. Since there really wasn’t anything new in this news story (we already knew about the huge, near billion dollar loss claimed a long time ago and his tax avoidance from the bombshell report just before the 2016 election) what we’re left with is that the Times really hates Trump and really wants to influence elections, which come to think of it we already knew that too.
Well, what is new is that the Times wants to mislead you that they were not part of a felony, namely the release of his tax return data: “it obtained printouts from his official Internal Revenue Service tax transcripts, with the figures from his federal tax form, the 1040, from someone who had legal access to them.” And it’s a felony for someone who has that legal access to provide it to someone who doesn’t (i.e. the New York Times). There was a time not that long ago I had legal access to certain classified information, and as part of that access it was made quite clear it would be a crime for me to provide it to someone who didn’t (like the New York Times). I’m not claiming that the Times did anything illegal by receiving or publishing the information, I’m just claiming that it was a crime for the leaker to provide it to the Times although if it’s a crime to knowingly accept stolen property in many jurisdictions, one has to wonder at the difference. There was a crime committed here, and it wasn’t by Trump, it was by the Time’s source.
The Times tries to draw a lot of conclusions from the returns. While you can’t make up stuff from whole cloth on a tax return, keep in mind that while an accountant’s job is to provide a client a clear, complete, and accurate picture of the client’s finances to the client, a tax accountant’s job is to provide a legally defensible picture of the client’s finances to the IRS that minimizes the client’s taxes – so the less clear, less complete, and less accurate while remaining legally defensible the better. I don’t think you can tell exactly how successful a businessman he is from his returns because they will always look less successful, and how much less is a factor of how good their tax accountants are. Nobody brags to the IRS how much money they make.
While Trump’s image as a super successful businessman, not deserved in my opinion, may have been somewhat important in his 2016 campaign, I don’t think it plays much of a role in 2020. Trump wasn’t the first, or last person, to relentlessly sell themselves far beyond their reality (what else is the Kardashian empire built upon), or to discover that if the debt you owe is a significant fraction of the lenders worth suddenly your success becomes very important to the lender. If a bank has to write off a few thousand dollars when it forecloses on a house that’s covered in the interest rate it charges; if a bank has to write off over a 100 million dollars when it forecloses on a real estate empire, executives at the bank lose their jobs. To me Trump isn’t the poster child of how do you make a small fortune – start with a large fortune; he’s more of how do you make a small fortune – keep the small fortune you start with.
We all try to avoid taxes just like we all try to avoid stepping in dog poo. It’s just most of us don’t have a lot (either money or scope) to work with. I mean, when TurboTax tells you it was able to save you $312 in federal taxes, do you whip out your check book and send the treasury a check for that amount? You could, you know. Of course not, you wonder why it couldn’t find more. Do you contribute to an IRA – why then you’re a tax avoider. The financial side of retirement planning consists of maximizing your income in retirement and deciding if that income is sufficient for your needs and desires, and a huge part of that maximization is tax avoidance. Tax avoidance is just finding legal ways of keeping more of your money and sending less to the government which spends it so carefully and wisely. Tax evasion is doing it illegally.I’ll tell you something I think is of interest on a tax return: charitable giving. You have every incentive to brag to the IRS about how much you give. I didn’t see anything in the Times about how much Trump has given over the years, just a lot of he has very complex finances and does everything he can within the law to minimize his taxes. But you have to wonder how much he gives, and if it reflected poorly on him I would expect the Times to note that.
We do have Joe Biden’s tax returns and the Bidens are not generous people. Before 2007 they never gave more than $400, as in a couple tenths of a percent in income. Then until 2017 they stayed below 2%, except for 2013 when it jumped for a year to 5%. So please, don’t tell me how compassionate Joe is.
