This is the top story from our daily newsletter published on September 29, 2020. To have this and more delivered directly to your inbox scroll down and enter your email or click here to sign up.
Trump’s Taxes: On Sunday the New York Times reported that President Donald Trump paid just $750 in federal income taxes in 2016, the year he won the presidency, and in 2017, his first year in office. Trump also paid no income taxes whatsoever in 10 of the previous 15 years, largely because he reported losing more money than he made, according to the Times. The news broke just two days before tonight’s first presidential debate. Here’s what both sides are saying about the latest September surprise.
On the Left: In the New York Times’ Monday morning newsletter, David Leonhardt outlined his paper’s investigation saying, “Even while declaring losses, [Trump] has managed to enjoy a lavish lifestyle by taking tax deductions on what most people would consider personal expenses, including residences, aircraft and $70,000 in hairstyling for television.” Leonhardt says the investigation also found that “As president, [Trump] has received more money from foreign sources and U.S. interest groups than previously known. Ivanka Trump, while working as an employee of the Trump Organization, appears to have received ‘consulting fees’ that also helped reduce the family’s tax bill. Trump is [also] facing a series of large looming bills in the next few years, and it is not obvious how he will cover them.” Leonhardt then highlights reactions to the story.
- Susan Hennessey of Lawfare is quoted as saying, “Now we know for sure why Trump was refusing to release his tax returns.”
- Lily Batchelder of New York University said, “Trump’s tax returns suggest he has only ever been successful as a showman, not at running actual businesses.”
- Seth Hanlon, a Democratic policy adviser, noted that “In 2017, a single worker without children who made $18,000 would have paid $760 in federal income tax. Donald Trump paid $750.”
- Avi Asher-Schapiro of Thomson Reuters Foundation pointed to the note about Trump’s haircuts saying, “It really illustrates how easy it is for rich people to manipulate their tax burden, & pay less than us. Trump’s haircuts are a business expense […] but not my entire rent when I work from home.”
After the release, one of the top trending articles on the left Monday was from Ed Mazza of the Huffington Post. Mazza highlighted that “Obama in 2011 paid $162,074 in federal taxes on gross income of $789,674, according to the return he released that year.” Tom Porter of Business Insider notes that “Trump criticized Obama for only paying 20.5% income tax in a year when Trump paid nothing.”
On the Right: Leah Barkoukis of TownHall highlighted one of the most read responses to the Times’ report which was a Twitter thread from Ryan Ellis, tax expert and president of the Center for a Free Economy. Ellis says:
- “Let’s start with the obvious: while the reporters and newspaper are held harmless by the First Amendment to the Constitution, whoever leaked these tax returns is likely guilty of multiple felonies.”
- “As to the information, I think the reporters are guilty of some of the ‘truthful hyperbole’ Trump accuses himself of. They report normal, albeit large, tax deductions as extraordinary.”
- “Consulting fees, legal fees, debt deductions, depreciation, charitable contributions, capital losses, passive loss deductions, etc. are part and parcel of what tax returns look like for high-income folks. There’s nothing unusual about finding them.”
- “What is unusual about Trump’s tax returns are the size and velocity of these items. I suspect this is a man who has gushers of income and gushers of legitimate expenses, well placed to offset over time. Nothing wrong with that.”
- “Here is where the story could do a better job explaining the distinction between tax evasion (which is illegal) and tax avoidance (reducing taxes via legal planning, something we all do).”
- “As an example of small-time tax avoidance, imagine you have some appreciated Coca Cola stock. Rather than sell the shares and pay the capital gains tax, you donate them to your favorite charity and deduct the value as a charitable write-off.”
- “The tax code is full of these legal, legitimate tax planning opportunities. In order to use them, you usually have to risk significant capital, be willing to endure years of losses, and generally be in the business of business.”
- “If you want the certainty of a nice, warm W-2 and a home mortgage and a 401(k) plan, you’re not in business. You work for those who put themselves out there to take risks. So tax avoidance is not available to you. Want them? Start a small business!”
- “Just be ready to pay a lot in taxes. You wouldn’t know it by reading this hatchet job of a story, but our tax system is extremely progressive. The more you earn, the more you pay in taxes. Trump did in years where he wasn’t recovering business losses.”
- “Whether Trump’s tax planning (and those of his advisors) meets tax law obligations is a matter between him and the IRS. But the items themselves are perfectly legitimate. And we have no insight into the discreet details of the claims.”
- “This story is nothing more than the ‘Orange Man Bad’ version of ‘gotcha’ pieces liberal journalists routinely run about how big companies don’t pay taxes. The stories invariably cherry-pick years and items favorable to the story’s bias.”
- “I strongly suspect that only blue checkmark types and liberal activists will care about this story. Tax experts see a ‘tie goes to the runner’ aggressiveness, but not much more than that. Rich guy wheels and deals.”
- Ellis ends by saying that “Tax avoidance isn’t just for the Trump family. Joe Biden does it all the time. So do I. So do you.”
Ashe Schow of the Daily Wire also wrote that “Among the many findings in The New York Times’ analysis of tax documents relating to President Donald Trump is the ‘revelation’ that the records do not ‘reveal any previously unreported connections to Russia.’
Flag This: Just hours after the Times’ bombshell report was published, Joe Biden’s campaign released an ad targeting Trump over details about his tax payments. The closely-timed ad-release has led some people to question whether or not the Times tipped off the Democrat’s campaign staff before publishing the story. It’s also completely feasible that Biden’s campaign whipped up the ad late Sunday night since it’s only 30 seconds long and features still images. Nevertheless, this is the type of perceived coordination that bolsters the right-leaning argument that “Mainstream Media is only an extension of the Democratic party.” As for what’s next, the Times’ authors wrote that this is just the tip of the iceberg and that “additional articles will be published in the coming weeks.” October was already shaping up to be a myserious month. The slow drip from the Times’ unidentified sources is sure to make the month extra spooky.