The “bombshell” report published by the New York Times yesterday on President Trump’s taxes will be another Rorschach Test for America.
- Conservatives will see it as more proof that this President is smart enough to avoid paying taxes.
- Progressives will see it as more proof that this President is an enormous tax cheat and a gigantic conman.
I see it as proof that this President is an enormous tax cheat and a gigantic conman. But I don’t think that conclusion was ever in doubt.
This is part of an epic New York Times investigation, wherein the Times has previously published extensively on President Trump’s finances.
- On October 2, 2018, the Times published a long piece on how Trump engaged in suspect tax schemes as he reaped riches from his father.
- On May 7, 2019, the Times published a long piece on how tax information from the last decade show over $1 billion in business losses for President Trump.
In a way then, the latest information is not new, but it does fill in a lot of gaps relative to information that was not previously disclosed. It lays out the degree to which this President really does appear to be a major, criminally liable tax cheat.
One of the ways that the Times got access to previous tax information about Trump family finances is through Mary Trump, the President’s niece, who had access to the information as a client in a long-settled litigation involving the Trump family cheating her and her brother out of their share of her father’s estate. Mary Trump was able, back in 2018, to provide the Times with a treasure trove of information relative to the Trump family finances.[1]
I’m not going to bore you with all the details from the Times report. Suffice to say that you will read and hear plenty about it over the next few weeks; trying to follow it in detail will make your head spin. But four of the highlights do include:
- That Trump paid no federal income taxes in 11 of the 18 years that the Times examined.
- That his tax bill was only $750 in the first year of his Presidency.[2]
- That he really is under audit, and is likely to owe the IRS about $100,000,000 when all is said and done.
- That he took some deductions that are likely to embarrass him, such as $72,000 in the cost of hairstyling for his television work on “The Apprentice.”
Dear first daughter Ivanka may also be in trouble, as it appears that she received millions in illegal “consulting fees” designed to reduce the Trump family tax burden while she was a principal of the Trump organization. (That’s a serious no-no for those of you who are wondering.)
The Times report also underlines things that others have previously said, including his former fixer Michael Cohen, who emphasized how much Trump’s run for the Presidency was intended as a “branding exercise” designed to renew his brand and revitalize his finances.
The report also indicates that there are four things which are combining to put enormous financial pressure on the President[3]:
- His business operations are currently hemorrhaging cash, losing as much as $50 million per year.
- Trump has personally guaranteed as much as $400 million in loans, and the repayment of those are coming due.
- Trump has a long-running dispute with the IRS over the legitimacy of a $72.9 million tax refund that he claimed in 2010, and which is the subject of his long-discussed audit.[4]
- Trump has exhausted most of his “one off” gimmicks with which he can fill his cash gap.[5]
Some of you may remember that it was tax fraud that finally took down the legendary gangster Al Capone back in the Prohibition era. And tax fraud may take down President Trump as well.
So far, his Presidency has operated as a kind of “get out of jail” card, which some people – including his former fixer, Michael Cohen – say is part of the reason that Trump is so desperate to hang on to the Presidency.[6]
But back to the Rorschach Test: will this make any difference to his supporters? Of course not. We all know that. It will embarrass him to a certain extent, and there may be a very few voters on the fence for whom this will be the last straw. But it won’t be many.
And for the rest of us, we’ll have the slim satisfaction of saying “I told you so.”
[1] What she got back in return was the knowledge that her own family completely deceived her in the litigation, and that the case was settled on false pretenses. So now Mary Trump has filed renewed litigation against the family based on their lying to her during the settlement negotiations.
[2] However, in that same year he did pay $15,598 in Panama, $145,400 in India, and $156,824 in the Philippines for taxes. So it looks like it’s not “America first!” when it comes to tax time.
[3] Several commentators have noted that having an American President under this much financial pressure presents a security risk to the nation.
[4] It is, of course, this audit that Trump has been using as the basis for refusing to release his taxes – any of his taxes – to the general public.
[5] These gimmicks include such things as a $100 million mortgage on the commercial space in Trump Tower, or selling off most of the stocks and bonds that he used to own.
[6] The President’s immunity for prosecution dates primarily to a 1973 memo authored by the Office of Legal Counsel for the Department of Justice – in the midst of the Nixon impeachment investigation – that opined that a sitting President cannot be subject to indictment and prosecution. It’s the reason that nothing came of the Mueller report.
