Last week, the New York Times revealed in a leaked document the details of Trump’s tax returns. Notably, Trump paid only $750 in federal income tax in 2016 and 2017. In 10 of the last 15 years, Trump didn’t pay a single dollar in federal income tax. Trump denied this claim at the debate last week after some prodding, saying he paid much more, but the fact-gathering by the Times seems pretty undeniable.
Obviously, this only makes sense given Trump’s history of manipulative and con-like business ventures. One of Trump’s tactics to avoid paying these taxes is to use his business failures as write-offs in order to not pay tax on his current income sources. By deducting losses from his failed investments, he can appear to have negative income for a year, giving him a trivial amount of income tax. Trump also went further, possibly violating laws, such as when he took stock from a venture despite claiming he was completely detached from it to avoid taxes.
However, I think it’s important to remember that Trump’s actions are a direct consequence of the current tax code, not an exception to the rule. Do we expect the ultra-wealthy to pay their fair share when there is a legal path around it — or at least one that won’t face any serious punishment? The entire goal of businesspeople is to maximize profits while minimizing expenditures; taxes are just another expenditure to minimize. When profit is the ultimate goal, tax evasion, legal or illegal, is actively encouraged by the system. It would be foolish to believe other multi-millionaires are doing anything different from Trump.
The tone of the New York Times article seems to suggest that Trump’s frequent business failures and bankruptcies prove that he himself is a failure. The main way he avoided his taxes in the first place was through writing off massive losses on his income. You can argue that he isn’t a good businessman, but it’s pretty difficult to see him as a failure. He has lived in extreme opulence and has had access to the absolute highest channels of power and influence — even before he became president. Who cares if his businesses have failed? He has still had control of absurd amounts of capital throughout his life, and it doesn’t seem like the failures have stopped that from happening.
Surely, the bigger story here is how ridiculously manipulable the tax code itself is. Even without manipulation, the top federal income rate has shrunk from over 90 percent in the 1940’s to 37 percent. With manipulation, the ultra-wealthy and mega-corporations can pay absurdly low taxes — lower than normal citizens. It’s no secret that neither party has any real interest in stopping the loopholes and tax breaks that have been expanding for the past decades. In fact, the article quickly mentions that one of Trump’s tactics was to use a proposal created by President Obama to dodge over $50 million in taxes in 2009. Recognizing the bipartisan and hegemonic nature of the tax code, of course, will never be in the interest of the New York Times.