Some mysterious person, who happened to have a copy with an arrow pointing to where Trump’s ex-wife was supposed to sign, leaked three pages from Trump’s 1995 tax returns to the NYT. The Times extrapolates as follows:
Donald J. Trump declared a $916 million loss on his 1995 income tax returns, a tax deduction so substantial it could have allowed him to legally avoid paying any federal income taxes for up to 18 years, records obtained by The New York Times show.
This is essentially what Hillary hinted at/”asked about” in the debate, but for the Times, this approach does seem like the journalistic version of saying “wtf, I’ll just skip that bolt and see what happens”. Ezra Klein at Vox point out:
All the Times has is three pages of Trump’s records from 1995. Everything else is informed speculation, extrapolation, and the word “could,” which appears again and again through the article.
Think about how dangerous that was for the paper. Trump could have released his tax returns and proven them wrong. Trump could have shown their speculation to be mere speculation, and used it as a cudgel to discredit their reporting on his campaign. The Times was far, far out on a limb.
I’m not even sure that Klein is stating this strongly enough. Trump could trivially disprove the basic thesis by releasing far less than the full returns for any year since 1995. Then again, he didn’t, and kind of admitted that the NYT is correct in the debate.
But this just leaves another question. If the big secret is out, why doesn’t Trump release his tax returns? It must be horrible.
The popular guess right now is that Trump is engaged in some elaborate structuring, which is either barely legal or outright evasion. I first saw this in a blog post by John Hempton, who says:
There is a vehicle out there (say an offshore trust or other undisclosed related party effectively controlled by Donald Trump) - which owns over $900 million in debt and is not bothering to collect it.
The basic idea is that the NYT story doesn't make sense on a certain technical level. The widely believed story of Trump in the 90’s is:
- Trump became way way over-extended in the late 80’s by buying too many Atlantic City casinos, an airline, etc.
- The early 90’s recession effectively wiped him out, many times over.
- Trump’s “comeback” was effected by shifting most of the losses onto his lenders, small business creditors, and, later the public markets.
If that’s true, naively Trump didn’t have $900M in his account to lose, which would prevent him from claiming the deductions that the NYT is talking about.
Hempton, and also Josh Marshall at TPM, seem to think that this is at the core of what Trump is hiding. Somewhere, there is an elaborate and questionably legal entity that keeps Trump afloat.
However, I am still confused.
- First of all, the IRS must have been looking at this deal for 20 years. Trump could probably easily release audited tax returns from, e.g., 10 years ago, showing this structure was allowed, at least in part.
- Trump has never really shied away from saying he works the system. How is this any different?
Whatever is there must be much worse.
So here is a question: does Trump even have positive net worth? Is there something else? I have no idea, but things are getting weird.
