It’s becoming clearer and clearer why Donald Trump – breaking yet another norm of presidential campaigns – won’t release his tax returns.
They would likely reveal to voters not only that he didn’t pay federal income taxes for years, but that he played fast and loose with loopholes to avoid doing so.
The New York Times reports that it obtained documents showing Trump potentially escaped tens of millions of dollars in taxes in the early 1990s by using a maneuver his own lawyers warned would likely be declared improper if he were audited. Congress later closed this loophole, which has to do with taxation of debt.
As his casino empire crumbled, Trump pressured the investors and banks who financed his three Atlantic City resorts to forgive hundreds of millions of dollars he owed them. But the Internal Revenue Service treats every dollar of canceled debt as a dollar of taxable income.
So he used this highly technical, legally dubious maneuver to avoid reporting the canceled debt to the IRS as income. It’s impossible to know for certain how much in taxable income Trump avoided declaring because he hasn’t released even a summary of his tax returns. But it could help explain how he was able to claim $916 million in losses on his 1995 return, which he then used to offset income in later years.
It appears that Trump wasn’t really “smart,” as he likes to brag, by taking advantage of loopholes available to any billionaire. He was just tip-toeing the line to illegal tax evasion.
It’s not just his past personal taxes that are a problem. It’s that the tax plan he pledges to enact as president would mean a windfall for millionaires like him and shortchange the working-class families he claims to champion.
Trump wants to lower the top income tax bracket from 39.6 percent to 33 percent and to end the “death tax,” which is only imposed on estates topping $5.45 million for individuals and $10.9 million for couples.
Hillary Clinton, on the other hand, promises tax relief for the middle class and to raise taxes on the richest Americans.
Trump pretends to look out for the little guy and bashes Clinton as part of the wealthy elite. But on the issue of taxes, voters need to realize it’s the exact opposite.