Shocking revelations! Trump tax accountants are efficient at reducing his tax obligations. In further shocking news: There is no evidence of anything to do with Russia! But wait, there’s more! Trump really is being audited! For these and other amazing revelations -- like the fact that you can deduct depreciation from taxable income: who knew? -- go to our excessively long article here. [Headlines that should be in the NYT]
That’s pretty much the sum of the long piece in yesterday’s New York Times, which they labelled a “bombshell”.
Their opening para was that Trump paid only $750 in tax in 2016 and 2017. That is incorrect. Further on in the article, buried deep in its bowels, is this:
Each time, he requested an extension to file his 1040; and each time, he made the required payment to the I.R.S. for income taxes he might owe — $1 million for 2016 and $4.2 million for 2017. But virtually all of that liability was washed away when he eventually filed, and most of the payments were rolled forward to cover potential taxes in future years.
In other words: he paid a total of $5.2 million in 2016/17. (We would call that provisional tax). When the actual tax owed was calculated -- by the government -- it came to a nominal $750 because of extra deductions that were introduced by... (drumroll).... President Obama! That is, what was owed was $750. What was paid was $5.2 million.
Trump’s accountants accepted that assessment (natch). Therefore Trump was owed a tax refund of $5,198,500 ($5.2 m less $750x2) from the Internal Revenue Service.
Added:
.... it is worth keeping in mind that the tax provision under which Trump was able to carry back (as opposed to carry forward) some extraordinary losses and thus claim a huge tax refund was not some arcane tax scheme — it was part of the Obama administration’s stimulus package. [Here]
And here’s a thing... Trump’s accountants did not apply for the refund -- they left it as a credit with the IRS, against future tax obligations. (“…rolled forward to cover potential taxes in future years”). That’s not something done by a company with tight cash flow, which would certainly have asked for the refund.
In short in 2016-17 Trump: . PrePaid $5.2 million. Owed $750. Was owed refund Didn't claim it, but rolled it over.
Thus the Times characterisation as “Trump paid only $750” is deeply misleading.... in fact, plain wrong.
As for the rest of the article, it shows, at length, that the accountants for Trump Inc, tried to minimise its tax, by applying all the relevant laws and regulations. There is no suggestion anywhere -- and this in a Trump-hating outfit -- that anything was done against the law. I don’t know a single person, anywhere anytime, who offers to pay the government more than it owes. Not even Warren Buffet, who has said he’s embarrassed whenever his corporate taxes are less than his secretary pays. But even Buffet doesn’t pay the government more than he owes. Money to charity, sure… in the mega billions. But noone, anywhere, anytime, on any side of politics, offers to pay the government more than it legally owes.
The Left media hammers Trump for paying so little tax. The Right media wonders if this “bombshell” will harm him. None appears to have read the article, which shows no wrongdoing, including with Russia. If politicians are upset by so little tax being paid, they need to change the law.
The article also confirms that Trump did and does still have an Audit of one of his deductions (of some $72 million, iirc). That’s been going on for some years. I’d thought in 2016 that maybe it was just a Trumpian excuse for not making his tax return public. But it appears, from this very report, to be correct. Again, I don’t know of anyone, right or left, who would willingly open up their books to the public when they are being audited.
There is the issue of debt, raised in the article. But it’s not possible to tell if the debt is a problem or if it’s over-leveraged. Maybe it’s a problem. As Trump often says “we’ll see”.
All up, apart from learning that there is nothing illegal in the tax returns — as far as the Times can tell — and that there is indeed an ongoing audit, this article is less “bombshell” and more hit piece
ADDED: My comments may come across as apologia for Trump. But I’m no Trump fanboy, and clear on his manifold shortcomings. It’s more that I’m incensed at MSM malfeasance. The Times is the “paper of record”. But it puts out manifestly bad faith articles like this one, in which the lede is belied by the content.
Another thought: the Times has long hammered Trump for not revealing his tax return. Now it has them. And refused to make them public. Presumably to keep the ability to spin them. But do they have any principled argument for keeping them hidden?
