Tag Archives: new york times and trump’s taxes

A (Perhaps Surprising) Alternative View of Trump’s Tax Shenanigans

If you recently read or read about the New York Times’ exposé of the president’s tax maneuvers over the years you were probably pretty appalled.  Aside from the revelation that he’s probably not nearly as rich as he has claimed over the years, he still has made an awful lot of money and paid surprisingly little in taxes.  A lot of that money consists of gifts from his father, who, we understand, was even less a nice guy than Agent Orange, and neither one of the those Trumps paid what ordinary people might assume to be a reasonable amount of taxes on this earned and transferred wealth.

But before you go claiming that this was tax fraud and demand an investigation, play along for a moment with a rhetorical game.  The Curmudgeon trusts you will answer these questions honestly, especially since you will be answering them silently.

Question number one:  If you own a home, did you take a deduction on your taxes last year for the interest portion of your mortgage payments?

Question number two:  Did you report to your state government your online purchases and send a check for the sales tax you owe but did not pay for those purchases?

The Curmudgeon guesses that most people answer “yes” to question one and “no” to question two.  Let’s take a closer look.

Home mortgage interest is deductible on your income taxes, so of course you took the deduction.  You have no intention of leaving that money on the table, nor should anyone expect you to do so. Right?

We are required to report our internet purchases and pay appropriate state sales tax on those purchases.  You didn’t do that.  Instead, you assumed that no one was going to be interested in whether you reported those purchases and paid those taxes and you decided that you’d take your chances and not pay the tax.  In the unlikely event that you get caught, you reasoned, you’d pay the taxes plus an appropriate penalty for failure to do so the right way.

So what does this have to do with Donald Trump and the puny amount of money he’s paid in taxes over the years?

Everything.

While it may be reasonable to declare that Trump’s tax-paying practices are sleazy and unethical and even dishonest, were they illegal?  It doesn’t seem likely.  Rich folks are far more likely to get audited than ordinary folks like us – The Curmudgeon’s not aware of any truly rich people who visit this space – and we know Trump has been audited a lot over the years.  Did the auditors demand more tax money from him after they did their work?  Perhaps.  Did they accuse him of tax fraud and press charges against him?  They did not.  And do you know why they didn’t?  Because what he did may have been unethical and perhaps even dishonest but it wasn’t illegal.  Should there be a higher standard?  Of course there should.

In the end, Trump did what you do regarding your home mortgage interest:  he took advantage of the tax code as it is currently written and decided not to leave his money on the table, just as you did.

So then whose “fault” is Trump’s tax chicanery?  Not Trump’s.  It’s not the IRS’s fault, either:  those folks enforce the laws and regulations and requirements as they are written.

Written by whom, you ask?  Ah, therein lies the rub:  they are written by the U.S. Congress, that’s who – and that, ultimately, is where the fault lies:  all those sneaky maneuvers that you find so deceptive, dishonest, and disgusting have been written into the tax code over the years by Congress – by YOUR senators and YOUR representatives.  Sometimes constituents or the leaders of businesses located in their states and their districts ask for such provisions.  Sometimes, lobbyists ask for them.  Sometimes, there appears to be an implicit quid pro quo:  you do this for me and I’ll help you get into or stay in office.  And sometimes, our members of Congress do these things because they hope, even without being asked, that doing such things will help them incur the favor of people who can help them get into or stay in office.

So is the president a sleazeball for using these maneuvers to minimize his tax burden? Perhaps.  But those maneuvers were written into the tax law and he’s just taking advantage of them, just like you take advantage of the mortgage interest tax deduction, and the IRS has decided time and time again and after careful review and auditing that what he did was legal and that what you did is legal as well.

So don’t blame Trump for doing everything he can not to leave a dime of his (or his daddy’s) money on the table.  We may feel, with considerable justification, that the manner in which he conducts his financial life tells us a lot about him as a person, but it doesn’t appear to tell us about his willingness to abide by the tax laws. For that, for how he uses those tax laws, blame our members of Congress for letting him, and others, do this kind of thing.

And then, maybe, do more than just blame them:  demand that they fix it.