The New York Times indicated that the information they’ve obtained about Donald Trump’s taxes was received from a source that legally possessed the information. It’s unclear how professionals, an accountant, lawyer, financial planner or employee of Trump, could possess such personal data and legitimately (and legally and morally) share it with a newspaper.
Frankly, all of these unnamed source scandals are beginning to rub Americans the wrong way. For all we know, the British spy, who concocted the infamous dossier on Trump, invented this whole pre-election tax brouhaha over the past two weekends (I’m being facetious). There’s a lesson to be learned. In politics, if you want something to remain confidential, don’t share it with anyone other than your lawyer or clergyman.
The Times is milking the information for all its worth. Actual legal transgressions have not been revealed (yet). And the timing of the disclosures is convenient (just before the debate). Did Trump or his financial advisors commit crimes? Did they not report income, fail to pay taxes on reported or unreported income, overstate deductions, improperly use deductions to decrease reported income? I don’t believe there is anything in the disclosures so far that accuses the president of criminal misbehavior.
Accounting is an expertise that is not familiar to most Americans. Tax accounting is the most complex aspect of accounting in general. Millions of Americans go to H&R Block and similar companies seeking help with their personal taxes each year. Their tax returns are a few pages, not voluminous like Trump’s. It’s likely that most of those following the story are not sure what Trump has done wrong, other than being an aggressive investor and advocate of himself.
Most people don’t realize that public companies and many large private companies report their financials two ways. One set up books is prepared on a cash basis for the IRS, and another is prepared for public consumption. The difference between these statements could be gigantic, especially profits and losses.
One issue is depreciation. For the IRS, depreciation is subtracted from revenues on an accelerated basis (more in early years and less in later years); it’s perfectly legal. This results in higher expenses and lower profits early on and is used for tax purposes (lower earnings, lower taxes). The other form of depreciation is calculated on a straight-line basis for the public (equal amounts each year). The method will result in higher profits early on.
And then there are loss carryforwards, which are historical losses that can’t be used currently, but can be offset against profits in the future. If Trump owned a casino that went bankrupt and reported a huge loss, it may not be used in the year of the bankruptcy; he could, and does, shelter profits in the future with these losses.
To summarize the accounting issues, one only has to note that Trump has been under IRS audit at least since he took office in 2016. It would be virtually impossible for him to conduct a massive tax defalcation under the noses of the tax authorities.
What do we learn from the Times’ attack piece so far? Nothing we already didn’t know, for the most part. Trump was/is a snake oil salesman who is able to talk people into paying him to use his brand on buildings, hotels, consumer products, etc.
We also learned that Trump is a major player in many bad investments; he lost millions on some of them.
And finally, we know Trump uses other people’s money whenever possible, mostly banks, to make investments, milk companies of cash and abandon them, such as Trump’s casino investments and subsequent bankruptcies.
Trump is not a nice man. He’s a narcissist and a salesman extraordinaire. He’s a pathological liar and exaggerator of facts. But no one has yet proven that he broke the law. However, I will admit that I would prefer to have a president whose moral compass is greater than just borderline.
I seriously doubt Trump’s base will be materially impacted by the Times efforts to expose the man.
Note: Just finished viewing the first debate. It was awful. I’m saddened that we don’t have a better choice for president. I doubt many voters changed their minds based upon the debate.