After fighting tooth and nail for years to keep his tax returns secret, Donald Trump has been thwarted. Not by one of several court orders that he turn them over, but by an unnamed source who gave them to the New York Times.
(Anticipating angry reactions, I will say here that based on my very brief research, whoever leaked the tax returns probably broke federal law. However, the Times is very likely safe in publishing them on First Amendment grounds.)
The major bombshells from the Times’ overview article:
- Trump paid $750 in federal income taxes the year he won the presidency. In his first year in the White House, he paid another $750.
- He paid no income taxes at all in 10 of the previous 15 years.
- He is in a years-long fight with the IRS over a $72.9 million tax refund he claimed and received. If he loses, he’ll owe $100 million or more.
- The majority of his main businesses report losing millions, and in some cases tens of millions, every year.
- Over the next four years, he is personally responsible for more than $300 million in loans coming due.
There is far more information in the article, of course, including the revelations that he wrote off as business expenses $70,000 worth of hairstyling during his time on The Apprentice, as well as the fees paid to the defense attorney who represented him during the Russia investigation.
The report has touched off a firestorm of speculation and political calculations. The president has called it fake news. (If the leaked returns are fake, he could easily set the record straight by releasing his actual tax returns.) There are massive amounts of information stemming from this reporting, and hundreds of rabbit trails to follow. I want to present you with some of the perspectives and possibilities I find most compelling and important to consider:
First, the president’s attorney points out that he did pay some income taxes in the 15 years preceding the election; that’s why he was able to claim a $72.9 million tax refund. (The second half of that sentence seems to me to cancel out the first, but I wanted to note it.)
Many of the president’s defenders are pointing out that virtually everyone takes advantage of every method possible for reducing tax liability, and Trump is no different; in fact, he is just better at it than everyone else. I suppose this is possible. If true, and legal, we need major tax reform, because there is no universe where it is fair for an actual billionaire to pay less in taxes than my family, and approximately half the families in the US. But I think three other scenarios are far more likely: 1. He is a terrible, terrible businessman. 2. He has committed tax fraud. 3. He is a terrible, terrible businessman who has committed tax fraud.
Many of Trump’s detractors are claiming these returns prove he is broke, and not really a billionaire after all. Forbes disagrees, saying he is still a billionaire, albeit one who is carrying over $1 billion in total debt, and that this makes his $750 tax payments even more scandalous.
Two Trump truisms in one here: His criticisms are always projection, and there is always a tweet.
There’s a lot more to this story than just the taxes, though. People who know a lot about security clearances are alarmed at the high level of debt carried personally by the president. Mark Zaid, a verified account on Twitter, is an attorney specializing in national security, security clearances, and government investigations. He had this to say:
Jason Kander, attorney and former Secretary of State for Missouri, said this:
I’m not aware of any evidence that the president is being blackmailed or having his debts exploited by foreign interests, but it’s obviously a concern whenever anyone is being considered for any level of security clearance—let alone the very highest. When the person with that highest clearance has fought for years to keep those debts hidden, concern turns to red flags and alarm bells.
The most extreme reactions have been those claiming that Trump has committed crimes in his tax and business dealings. I’m taking these allegations with a big grain of salt, but Michael Bromwich joining in really caught my attention. He is a former Inspector General of the Department of Justice, as well as former prosecutor for the Southern District of New York, which I’ve written about before. Of all the people who could comment on this topic, he is certainly one of the most knowledgeable. And he did not mince words:
He is referencing the Justice Department’s Office of Legal Counsel memo, which set the standard that a sitting president cannot be indicted. He’s agreeing with those who believe Trump may refuse to leave office even if he loses the election, because it’s the only way to protect himself from facing charges. Others have wondered whether he may resign if he loses, making Pence president temporarily—long enough to pardon Trump for any crimes. This is, of course, all speculation. I only mention it because I believe someone of Bromwich’s stature gives this conjecture a lot more weight than your standard rumor.
It remains to be seen whether these revelations will affect the election. A lot of people who voted for him may be surprised to learn that the brilliant businessman they hired because he puts America first actually paid far more in taxes in 2017 to Panama, India, and the Philippines than he did to the US, and that most of his business ventures are hemorrhaging cash. It probably won’t. The vast majority of voters have already made up their minds. What is less certain is what will happen after the election, especially if Trump loses. Plenty of rich celebrities have been convicted of tax evasion, and even done prison time, but to my knowledge, no former presidents.
Regardless of what happens, I just keep thinking about all the things my family could have done this year if we’d only had to pay $750 in income tax.