According to a Trump tax return obtained and authenticated by the New York Times, Trump declared a huge loss in 1995. This loss could be carried over to subsequent years to offset income, and possibly have excused him from paying taxes for 18 years, according to analysts engaged by the Times. But their analysis said
I do not understand the bookkeeping gymnastics involved in stating his business losses as a personal loss for tax purposes, but it appears to be all legal. It would not surprise me if this were a common practice among people at his income level.
I don’t know why this is such a pungent point of criticism against Trump. He is not a tax evader; he is simply using our broken tax system against itself. Warren Buffet, one of the richest men in the world, famously stated that his effective tax rate is lower than his secretary’s. He was not boasting but rather pointing out the inequities in the tax code. But he did not write a check to the U.S. Treasury to square it all up, and his morality was not impugned.
Disclaimer: I am not posting this in support of Trump the person. I am not a Trump supporter. I think that electing him as president would be an unmitigated disaster. I am posting this because I simply don’t understand how this is a valid criticism. There is so much else to criticize.
That’s just a part of the story. If he’s running on his supposed business savvy, it’s reasonable to be skeptical of this if he lost a billion dollars during a time in which the economy was doing quite well.
Some risks don’t work out. That’s why they are called risks. Was Coca-Cola stupid for bringing out New Coke back in the day. Yes. What about George Lucas and Jar Jar Binks? Perhaps. Does that mean the corporation and people making these decisions are terrible at business in general?
You know I wonder how many people on SDMB own businesses.
You’re right. It’s not reasonable to question someone running on their business skills about failures in their businesses – we should just accept that they’re good at business because they say so.
Shame on those reporters for questioning the Word of Trump!
He has been a beneficiary of our system which is heavily skewed towards favoring the wealthiest, and increasing income/wealth disparity.
Is there any reason to believe that, should he have even more ability to influence policy, that he will encourage changes that will disadvantage himself financially? Is that the future Americans desire?
Add this to the (anecdotal) evidence of him failing to perform on contracts, and (apparently) questionable conflation of personal and charitable assets and liabilities. That might paint the picture of a lifelong ruthless SOB who is adept at pressing his personal advantage. If you admire that sort of a person, great. But I think it takes a considerable leap to imagine that he will now devote his efforts to the public good. Kinda like the scorpion and the frog…
…And THAT’S why some investments are classified high risk and some are low risk. Trump is a High Risk Taker… this loss is proof. A President can’t afford to be so happy-go-lucky with a roll of the dice with the fate of the country at stake.
We didn’t spent hundreds of years building this country so some Idiot can say. “Ooops, I guess it was another ‘Ishtar’… maybe Canada will take you.”
Really, the idea that this can be spin as “genius” is asinine. Specially when Trump himself criticized the “smoochers” for years. And Trump has reported that he will cut taxes even more for his kind and end the inheritance tax.
Pretty much this. The issue isn’t that Trump cheated or broke the law—the consensus is that he didn’t—but that these glimpses into his tax returns (along with the extant ones we already have thanks to his casino dealings) show that he’s a hypocrite.
From my chair, a big part of Trump’s campaign is about money… hes super duper rich so that means he’s smart. He’s a businessman so that means he’d make a better president than someone who isn’t. NATO countries don’t pay their fare share, there is trade deficit… it goes on. A significant part of his rhetoric is, basically, the world takes advantage of us, convincing us to foot the bill. As a result we (and him) are getting the shaft because we pay taxes for failed programs and useless spending. It seems to be part of his “outsider” image. This is nothing new, as he’s criticized people (including Obama) for not paying more in federal income taxes for years.
But now it appears that, unless he coughs up the rest of his return to prove otherwise, that he’s been bitching about the a crippling tax burden that for him personally simply doesn’t exist.
Complaining that Obama “only pays 20.5% on $790k salary” as he pays $0 while simultaneously bragging about being a multi-billionaire is the issue at hand. Thus the criticism.
If he fucks up that bad making high risk decisions as President, there IS no “writing it off” for the country, and there IS no monetary benefit for the country. When he is put in charge of the country we become the company he puts at risk, not the supposedly brilliant mastermind who gets away clean in the end.
It’s common for normal individuals to carry over losses year-to-year. If you sell a stock and take a big loss, you may be able to carry over part of that loss each year to offset profits from when you sold a stock and made a profit. It’s fair because losses are subtracted from profits to determine how much is subject to tax. But within a particular tax year, things might not line up. You may take huge losses in 2009, but then make huge profits in 2010. The ability to carry over losses helps even that out.
Of course Trump will do the same thing, but Trump has the benefit of a team of accountants who look to game the system any way they can. They can shift money around so that it looks like suffered a huge loss, then that “loss” is spread over many years to offset legitimate profits. An example might be that Trump sells a casino at a $900M loss to a foreign company, but that foreign company is a shell corporation who pays Trump in some other way. On paper it looks like Trump lost $900M, but that $900M is invested by the foreign corporation in Trump’s resorts in the US. Trump gets the benefit of the carryover loss and the benefit of the $900M invested in his companies at the same time.
Trump has criticized others for not paying taxes. He criticized Romney’s tax returns and said it did a lot of damage to his campaign just for this reason. Republicans traditionally have complained about “makers and takers.” They dislike people who don’t pay taxes because they don’t have “skin in the game.” This is actually directed at lower classes and not billionaire hypercapitalists, but they don’t tend to say that part out loud.
One of Trump’s supposed selling points is that he’s familiar with the system. He admits to buying politicians and taking advantage of the rules. With this knowledge he claims he’ll change the system to make it better for the little guy. However, he supports slashing taxes on the rich and gutting regulatory agencies, so his claims to be the people’s champion should be taken with a boulder of salt.
Candidates are often criticized for perfectly legal actions. It’s legal for Hillary to accept huge payments for giving speeches to financial institutions. In America, what’s often the outrage is what’s been made legal.
Trump claimed to be worth something like $10 billion. As may analysts have pointed out, this is unlikely. If it were true, he should pay taxes on the many billions he earned since then. If it’s not true, he doesn’t want to admit it. There’s one way he could clear this all up, but he refuses.
There is well-supported speculation (based on the incomplete tax return) than the $900B+ was NOT a cash or asset loss, but paper losses. If that’s true, Trump got to write off taxes on nearly a billion in income because of an essentially phantom business loss.
I posted this tweet elsewhere. ‘If you’re applauding Trump’s gaming of the system, I never want to hear your thoughts about who’s taking advantage of welfare again. Ever.’
This explains why Coke never stops crowing about the success of New Coke in all their advertisements, and is Lucas is currently traveling the country boasting that Jar-Jar is the most beloved character in the history of the arts.
One can imagine many things but this idea it is unlikely that Buffett would do anything to make him pay more in taxes than he has to. Buffett has structured his compensation so that he makes very little in salary and a huge amount in capital gains. Capital gains are not taxed until they are realized and they are taxed at a lower rate than salary.
If Buffett wanted to pay more he could just restructure his compensation toward salary.
His secretary is making a very high salary and thus pays the highest income tax rate. If Buffett wanted to he could pay her a low salary and give her shares of stock which would cut her effective tax rate. The fact that he pays a lower rate than his secretary is completely under his control and he could change it if he wanted to.
Furthermore he owns a large share of his business which pays a large amount in taxes. His share of the amount his business pays in taxes dwarfs his salary so depending on how you define it, he could either be paying a very small tax rate or a very high one.