President Trump's taxes: much ado about nothing

The New York Times published an "exposé" of what it claimed were President Trump's tax returns.  The article doesn't say how the newspaper came by his tax returns, except to note that they were provided to it.  The Grey Lady might well be reticent about that - because it's a felony offense to release anybody's tax returns to a third party without authorization.  One hopes that an investigation is underway into that.

Be that as it may, the allegations that President Trump paid little or no tax for years are simply that:  allegations - and badly supported ones at that.  In the absence of detailed information, including source documents (which the paper does not present to support its case), it's impossible to say from an individual tax return how much tax a business paid.  Most of President Trump's income during those years came from business dealings.  A whole raft of taxes would have been levied on them, none of which would be reflected in his personal tax return.  As Donald Trump Jr. pointed out:

“Listen, it’s ridiculous, my father’s paid tens of millions of taxes,” he said. “If he does things in certain years where you get depreciation, where you get the write-off, where you get historical tax credits like we did when we took on the risk of building the Old Post Office in D.C., it’s the perfect example. That was literally a government contract. We bid against every hotel company in the world, historical tax credits that you use to offset tax payments for taking the risk to build that. That was done under the Obama administration. It literally took an act of Congress to get it done. So with that comes historical tax credits. That’s the reality. People don’t understand what goes into a business.”

“It doesn’t include property taxes, it doesn’t include payroll taxes, it doesn’t include real estate taxes, it doesn’t include so many of the things that he’s been paying taxes on forever, as he’s also putting thousands and thousands of people to work on an annual basis,” Trump continued. “But, of course, The New York Times does this, they put out a selective, you know, picture of all of these things the day before a debate ... That’s the lens by which the media looks at anything that they can try to spin about Donald Trump.”

His description of business taxation and tax credits is exactly right.  I was a company director in South Africa before I became a pastor, and I run a small company here in the USA to handle my books and publishing income, so I speak from personal knowledge and experience in two countries.  There are all sorts of tax credits and deductibles a corporation can use to claim costs and expenses against taxable income.  I do so myself, to the maximum possible extent - legally, of course.  I don't cheat on taxes by doing so;  I merely take advantage of "loopholes" or exceptions allowed for in our tax laws.  The same applies to every business in the country, and to President Trump and his businesses as well (not that he's running them while he's President, of course).

The NYT report also appears to conflate cash income with taxable income.  Just because someone made (say) $100,000 cash income in a year does not mean that they owe taxes on all of it.  If they had legally justifiable and tax-deductible expenses of, say, $80,000 that year, they'll pay tax on only $20,000 cash income.  That's what all Americans do when we prepare our tax returns every year.  If you own a home, you're legally entitled to deduct mortgage interest from your taxes.  Tens of millions do so.  If President Trump takes advantage of similar legally entitled deductions, why should anyone complain?  (He can also afford to hire very expensive and very competent accountants, like most businesses, and they make sure he claims every deduction possible - including what he pays for their services.  That's their job, and judging from the limited information available, they appear to do it very well.)

Finally, I note that President Trump isn't taking a cent of his salary while in office.  He's donating it all to various activities and departments of the US government.  He'll be taxed on that salary, but allowed to deduct donations of that kind, so he'll end up owing no taxes on it for the duration of his term(s) of office.  His Presidential income, minus his allowable deductions, will be zero, as will the tax he pays on it.  Is that something of which he's supposed to be ashamed?

I find the whole NYT article to be nothing but an attempted partisan political take-down of an opponent.  It's inadequately sourced and justified, contains incomplete information (to put it mildly!), and is written from a clearly biased perspective.

(BTW, go read Larry Correia's fisking of the NYT report.  Larry is a retired corporate accountant, and has been through a number of IRS audits of businesses and corporations, so he knows whereof he speaks - and he does so in his usual pungent, profane and delightfully entertaining style.  As I write these words, Larry's blog isn't responding, so if you encounter that problem, wait awhile and try again.  It'll be back up soon.)

Peter