Trump Thread

[Montmorency]

Hm. Well, as newly-revealed tax returns from 1985-1994 show, Trump's businesses were an even bigger failure than the near-total failure that was publicly known. He appears to have lost more money in those years than almost any single American known to the IRS. No kidding.

The numbers show that in 1985, Mr. Trump reported losses of $46.1 million from his core businesses — largely casinos, hotels and retail space in apartment buildings. They continued to lose money every year, totaling $1.17 billion in losses for the decade.

In fact, year after year, Mr. Trump appears to have lost more money than nearly any other individual American taxpayer, The Times found when it compared his results with detailed information the I.R.S. compiles on an annual sampling of high-income earners. His core business losses in 1990 and 1991 — more than $250 million each year — were more than double those of the nearest taxpayers in the I.R.S. information for those years.

Over all, Mr. Trump lost so much money that he was able to avoid paying income taxes for eight of the 10 years. It is not known whether the I.R.S. later required changes after audits.

Spoiler Alert, click show to read: 

But like with the Mueller Report, we've known most of this for a long time.

The first of the two previous glimpses of the president’s tax returns came from his 1995 filings, pages of which were anonymously mailed to The Times in 2016. They showed that Mr. Trump had declared losses of $915.7 million, giving him a tax deduction so substantial that it could have allowed him to legally avoid paying federal income taxes on hundreds of millions of dollars of income for almost two decades.

Unfortunately, we still don't have the more recent tax returns he is unlawfully ordering withheld from Congress.

Please keep in mind, there is no such thing as 'too stupid to be a fascist.'





By the way, just, can we get rid of this shit please, free money for being bad at being rich?

giving him a tax deduction so substantial that it could have allowed him to legally avoid paying federal income taxes on hundreds of millions of dollars of income for almost two decades.

Jog on.

[Strike For The South]

Hm. Well, as newly-revealed tax returns from 1985-1994 show, Trump's businesses were an even bigger failure than the near-total failure that was publicly known. He appears to have lost more money in those years than almost any single American known to the IRS. No kidding.

I mean, on some level we knew this. Donald Trump being a failure has been a punchline for years. In the political arena, he was able to metamorphosis. A celebrity with a bizarrely opaque centrist stance on most issue with no record? People painted on him what the wished.

But now he has a record and his hand has been played. Hamstring him and focus on 2020. I think Pelosi is doing the right thing by waiting and letting him twist in the wind.

[Seamus Fermanagh]

...A celebrity with a bizarrely opaque centrist stance on most issue with no record? People painted on him what the wished....

Quite the pithiest summary of Trump's 2016 success I have read.

[Strike For The South]

Quite the pithiest summary of Trump's 201 success I have read.

Never confuse my brevity with intellect.

[a completely inoffensive name]

By the way, just, can we get rid of this shit please, free money for being bad at being rich?

Deferred taxes due to heavy losses seems on its face to be a fair rule to prevent kicking those who are already down.

I don't have an issue if Trump legit lost the money, because the rule probably helps others who simply had a bad year.

If Trump abused the rule to run up losses for evading taxes, the issue isn't the rule but the lack of resources at the IRS to investigate fraud.

[Husar]

If Trump abused the rule to run up losses for evading taxes, the issue isn't the rule but the lack of resources at the IRS to investigate fraud.

Is that even fraud? Plenty of companies have subsidiaries in tax havens that own all their patents and then they pay them for the patents until no taxable income is left outside the tax haven, where the tax on the income is minimal or nonexistent. AFAIK this is public knowledge and not fraud because paying a company abroad for using their patents isn't fraud, it's a legitimate business transaction.

Many tax codes simply don't consider international relations in that sense. Nike uses some loophole where the US law says their subsidiary in the Netherlands has to pay the taxes but the dutch law says the mother corp in the US needs to be taxed. Neither country demands taxes from them as long as all their profit happens in the Netherlands and their HQ is in the US.

A more appropriate question might be why no politicians seriously want to close such loopholes or why there is no international cooperation to make sure all countries get their taxes. Surely Furunculus would be against it, because in "classical liberalism", "libertarianism" or "neoliberalism" the idea that countries compete against one another to grant anyone lower taxes is a great idea and makes everyone more free. Except that Jose the plumber can't just leave Mexico to pay lower taxes in the US, but Antonio the (inherited) billionaire can. That's freedom and equality of opportunity.

[Seamus Fermanagh]

Is that even fraud? Plenty of companies have subsidiaries in tax havens that own all their patents and then they pay them for the patents until no taxable income is left outside the tax haven, where the tax on the income is minimal or nonexistent. AFAIK this is public knowledge and not fraud because paying a company abroad for using their patents isn't fraud, it's a legitimate business transaction.

Many tax codes simply don't consider international relations in that sense. Nike uses some loophole where the US law says their subsidiary in the Netherlands has to pay the taxes but the dutch law says the mother corp in the US needs to be taxed. Neither country demands taxes from them as long as all their profit happens in the Netherlands and their HQ is in the US.

A more appropriate question might be why no politicians seriously want to close such loopholes or why there is no international cooperation to make sure all countries get their taxes. Surely Furunculus would be against it, because in "classical liberalism", "libertarianism" or "neoliberalism" the idea that countries compete against one another to grant anyone lower taxes is a great idea and makes everyone more free. Except that Jose the plumber can't just leave Mexico to pay lower taxes in the US, but Antonio the (inherited) billionaire can. That's freedom and equality of opportunity.

The US tax system is a byzantine thing, designed by special interests and tax accounts/attorneys so that there are any number of ways to legally 'game' the system. Trump almost certainly did nothing illegal with his taxes -- but paid fair money to reasonable shysters to insure that he did not have to pay much if anything.

All taxes are paid by individuals. The only thing various tax laws determine is who is responsible for collecting those taxes. The government collects some, but lets businesses collect even more on its behalf.

[a completely inoffensive name]

Legally, I guess you are right it isn't fraud.

But common sense tells us this is all a rigged game to simply move and hide money that otherwise should be going back to the state. And we all know it. Every dollar moved out of the country through these means is a dollar stolen from a hungry mouth on SNAP or from a sick person on Medicare or from a research grant.
Guess that makes me a dumb lefty, but whatever.

The argument that "he did nothing wrong...legally" gets more and more tenuous when the law clearly doesn't bind everyone together but partitions people apart. Ahhh fuck I became Monty.

[Husar]

The US tax system is a byzantine thing, designed by special interests and tax accounts/attorneys so that there are any number of ways to legally 'game' the system. Trump almost certainly did nothing illegal with his taxes -- but paid fair money to reasonable shysters to insure that he did not have to pay much if anything.

All taxes are paid by individuals. The only thing various tax laws determine is who is responsible for collecting those taxes. The government collects some, but lets businesses collect even more on its behalf.

I don't think this is in any way special in the US. Maybe a little worse, but other countries' tax codes are just as weird and partially written by lobbyists.
As for the last part, technically yes, but that doesn't make the effect the same, because there is a difference in which individuals pay more. When a corporation has to pay(collect) more taxes, it cuts into the profits, profits which would otherwise go to wealthy investors. It's more of a wealthy people tax than, say, an income tax that only applies to wages and not capital income. The argument that the big business will then create fewer jobs is invalid, because by taxing the little man less, he can start more smaller companies that also create jobs. If only billionaire investors can create jobs anymore, you did something else wrong and have basically made them your inofficial rulers who you depend on.

Legally, I guess you are right it isn't fraud.

But common sense tells us this is all a rigged game to simply move and hide money that otherwise should be going back to the state. And we all know it. Every dollar moved out of the country through these means is a dollar stolen from a hungry mouth on SNAP or from a sick person on Medicare or from a research grant.
Guess that makes me a dumb lefty, but whatever.

The argument that "he did nothing wrong...legally" gets more and more tenuous when the law clearly doesn't bind everyone together but partitions people apart. Ahhh fuck I became Monty.

I wasn't making a moral argument, if you were going to prosecute moral fraud and/or adjust the laws accordingly, two thirds or more of your billionaire class would probably be in jail. Though to be actually moral (throwing everybody in jail for revenge is a bad idea), you'd just nationalize most of their assets.
Then again nationalizing assets they have in Caribbean states might cause some moral issues again (invasion? bullying?).

[Montmorency]

I'm not sure where the thread's focus on international tax evasion is coming from. Maybe this deserves a fuller explication, but briefly to understand what was going on with Trump, we have to think about how income is defined and treated in the tax code. Crucial concepts are adjusted gross income (AGI) and business income.

Trump's businesses were typically structured as partnerships (1065) and S-corporations (1120S), so he ultimately calculated and reported business income taxes as personal taxes (1040) on pass-through income. This is distinct from any capital gains income such as stocks and dividends, as well as other earned income such as his own salary. The concept of income for tax purposes, especially as you get richer, tends to have little to do with income in the vernacular sense of 'money I made'. There's financial income and losses (such as the money Trump spends and the salary he pays himself, or revenue vs. expenses), and non-financial income and losses (typically capital assets such as buildings and equipment). You add them up on the tax form and apply certain deductions, credits, exemptions, allowances, etc. This is roughly analogous to "taxable income" (though there are further deductions applied to AGI to get the true taxable income).

If business losses are high enough you can shelter future income from tax, which is ideally intended as a boost for struggling companies.The concept of depreciation applies to the value of capital - it "depreciates" over time. This gradual loss of value of operating capital is counted like a business expense and can be deducted from income. The question is, what is the nature of Trump's reported losses, which in some years nudged 10 figures? Were they financial in nature such as in his expenses exceeding the revenues of his holdings, or was Trump reporting a loss of value in his buildings and casinos? But Trump's declared negative income was too astronomical to be explained fully by legitimate depreciation, like trying to obfuscate a missing pallet of grocery wholesale items by claiming you ate it all. It was likely a combination of both financial and non-financial losses reinforcing each other, but mostly the former - just with borrowed money. Trump's properties lose money and value operating even as he spends on them and buys other unproductive assets or launches unproductive ventures, he covers it up by over-leveraging his properties by taking out loans against their value to increase his cash flow, he can't pay back the principal on the loans (presumably he stretches to qualify for deductions on interest) and so bluffs into more debt while reporting further income losses based on negative equity and all the borrowed money he's spending, his insolvent business entities default on loans, Trump liquidates the relevant entities and capital with a tax advantage and suffers no liability for his business losses nor incurs net tax burden and gets to move on to the next grift, such as convincing people he's a brilliant salesman and securing no-risk branding deals for steady income. And that's the straightforward bit.

Where Trump possibly broke the law is in the case where much of the losses claimed were probably unpaid loans, that he claimed as losses what the IRS counts as gains. If you default on debt or have it forgiven, the cancelled debt counts as taxable income. If you invert income you should be paying taxes on into losses that further trigger an IRS-sponsored tax shelter, swindle creditors of millions to plug your business negative cash flow and tax burden, that's pretty bad. It is also conceivable he could have accomplished in a legally-grey way by taking advantage of the Gitlitz Loophole, closed by Congress in 2002.


The telling closing paragraph in the NYT article:

While Donald Trump reported hundreds of millions of dollars in losses for 1990 and 1991, Fred Trump’s [Donald's father] returns showed a positive income of $53.9 million, with only one major loss: $15 million invested in his son’s latest apartment project.

Telling quote from an interview with Ivanka Trump:

She tells a story—which may also feel familiar at this point—about walking down Fifth Avenue with her father around the time of his divorce from her mother, when Ivanka was 9 or 10 years old. They saw a homeless man sitting outside Trump Tower. “I remember my father pointing to him and saying ‘You know, that guy has 8 billion dollars more than me,’ because he was in such extreme debt at that point,” she recalls. “It makes me all the more proud of my parents, that they got through that.” It’s remarkable that Trump père was so frank with his very young daughter about his financial problems; it’s clear that he has always trusted her. Even a decade later, however, it does not seem to occur to Ivanka that her father was not actually poorer than the homeless man sitting outside the building with her last name on it. [lol] Instead, she frames the story as a revelation, using it as a canny opportunity to reflect on her father’s strength, resilience, and insight.

To be scrupulous one can't be confident what actually constituted Trump's reported losses without more tax and financial information. But look, Trump is a known tax fraud and a failed businessman. He is a tax fraud because that's how he and his family have always lived, as career criminals (established in so much reporting), and he is a failed businessman because his ventures routinely lost money and had to be liquidated or closed while Trump stiffed creditors of billions, all while hardly even growing his own personal fortune.

ACIN what I don't like is rich people shuffling their liabilities onto the government or other people. "Incentives" nothing, let them pay for their gambles.