SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
The Real Scandal of Trump Paying No Taxes
According to the New York Times, Donald Trump declared a $916 million loss on his 1995 tax returns - which could have allowed him to legally avoid paying any federal income taxes for 18 years.
The loss stemmed from Trump's investments in the early 1990s.
Ordinary investors in Trump's business empire saw the value of their shares plunge to 17 cents from $35.50, bondholders got pennies on the dollar, and scores of contractors went unpaid.
Oct 03, 2016
According to the New York Times, Donald Trump declared a $916 million loss on his 1995 tax returns - which could have allowed him to legally avoid paying any federal income taxes for 18 years.
The loss stemmed from Trump's investments in the early 1990s.
Ordinary investors in Trump's business empire saw the value of their shares plunge to 17 cents from $35.50, bondholders got pennies on the dollar, and scores of contractors went unpaid.
But Trump got a bonanza because the tax code allows "net operating losses" to cancel out taxable income in future years. And the bankruptcy code allows wealthy people to stiff the people they owe by reorganizing their debts under Chapter 11.
Trump didn't do anything illegal. Real estate losses are notoriously easy to create. Trump bought buildings with borrowed money. He could then deduct interest paid on that debt. On top of that, he could take depreciation deductions, even when his real estate was appreciating in value.
Presto! Trump claimed almost a billion dollars of losses that would cancel his gigantic income gains for years to come.
Bankruptcy is also easy to utilize, if you're wealthy enough to find a good bankruptcy lawyer who can use the bankruptcy code repeatedly to shelter your fortune and avoid paying your debts. Trump has used bankruptcy to stiff his creditors at least four times.
The real scandal here is that Trump and other hugely wealthy people can get away with this, and do so all the time. It's just another way the system has been rigged - by rich people who buy off politicians to alter tax, bankruptcy, and other laws and regulations to their advantage, just like Donald Trump has done.
"As a businessman and a very substantial donor to very important people, when you give, they do whatever the hell you want them to do," Trump told The Wall Street Journal in July 2015. "As a businessman, I need that."
Trump isn't and was never a smart businessman. He was and is smart at gaming the system. There's a difference.
An Urgent Message From Our Co-Founder
Dear Common Dreams reader, It’s been nearly 30 years since I co-founded Common Dreams with my late wife, Lina Newhouser. We had the radical notion that journalism should serve the public good, not corporate profits. It was clear to us from the outset what it would take to build such a project. No paid advertisements. No corporate sponsors. No millionaire publisher telling us what to think or do. Many people said we wouldn't last a year, but we proved those doubters wrong. Together with a tremendous team of journalists and dedicated staff, we built an independent media outlet free from the constraints of profits and corporate control. Our mission has always been simple: To inform. To inspire. To ignite change for the common good. Building Common Dreams was not easy. Our survival was never guaranteed. When you take on the most powerful forces—Wall Street greed, fossil fuel industry destruction, Big Tech lobbyists, and uber-rich oligarchs who have spent billions upon billions rigging the economy and democracy in their favor—the only bulwark you have is supporters who believe in your work. But here’s the urgent message from me today. It's never been this bad out there. And it's never been this hard to keep us going. At the very moment Common Dreams is most needed, the threats we face are intensifying. We need your support now more than ever. We don't accept corporate advertising and never will. We don't have a paywall because we don't think people should be blocked from critical news based on their ability to pay. Everything we do is funded by the donations of readers like you. When everyone does the little they can afford, we are strong. But if that support retreats or dries up, so do we. Will you donate now to make sure Common Dreams not only survives but thrives? —Craig Brown, Co-founder |
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License.
Robert Reich
Robert Reich is professor emeritus of public policy at Berkeley and former US secretary of labor. His latest book is the No. 1 New York Times best-seller, "Coming Up Short."
According to the New York Times, Donald Trump declared a $916 million loss on his 1995 tax returns - which could have allowed him to legally avoid paying any federal income taxes for 18 years.
The loss stemmed from Trump's investments in the early 1990s.
Ordinary investors in Trump's business empire saw the value of their shares plunge to 17 cents from $35.50, bondholders got pennies on the dollar, and scores of contractors went unpaid.
But Trump got a bonanza because the tax code allows "net operating losses" to cancel out taxable income in future years. And the bankruptcy code allows wealthy people to stiff the people they owe by reorganizing their debts under Chapter 11.
Trump didn't do anything illegal. Real estate losses are notoriously easy to create. Trump bought buildings with borrowed money. He could then deduct interest paid on that debt. On top of that, he could take depreciation deductions, even when his real estate was appreciating in value.
Presto! Trump claimed almost a billion dollars of losses that would cancel his gigantic income gains for years to come.
Bankruptcy is also easy to utilize, if you're wealthy enough to find a good bankruptcy lawyer who can use the bankruptcy code repeatedly to shelter your fortune and avoid paying your debts. Trump has used bankruptcy to stiff his creditors at least four times.
The real scandal here is that Trump and other hugely wealthy people can get away with this, and do so all the time. It's just another way the system has been rigged - by rich people who buy off politicians to alter tax, bankruptcy, and other laws and regulations to their advantage, just like Donald Trump has done.
"As a businessman and a very substantial donor to very important people, when you give, they do whatever the hell you want them to do," Trump told The Wall Street Journal in July 2015. "As a businessman, I need that."
Trump isn't and was never a smart businessman. He was and is smart at gaming the system. There's a difference.
Robert Reich
Robert Reich is professor emeritus of public policy at Berkeley and former US secretary of labor. His latest book is the No. 1 New York Times best-seller, "Coming Up Short."
According to the New York Times, Donald Trump declared a $916 million loss on his 1995 tax returns - which could have allowed him to legally avoid paying any federal income taxes for 18 years.
The loss stemmed from Trump's investments in the early 1990s.
Ordinary investors in Trump's business empire saw the value of their shares plunge to 17 cents from $35.50, bondholders got pennies on the dollar, and scores of contractors went unpaid.
But Trump got a bonanza because the tax code allows "net operating losses" to cancel out taxable income in future years. And the bankruptcy code allows wealthy people to stiff the people they owe by reorganizing their debts under Chapter 11.
Trump didn't do anything illegal. Real estate losses are notoriously easy to create. Trump bought buildings with borrowed money. He could then deduct interest paid on that debt. On top of that, he could take depreciation deductions, even when his real estate was appreciating in value.
Presto! Trump claimed almost a billion dollars of losses that would cancel his gigantic income gains for years to come.
Bankruptcy is also easy to utilize, if you're wealthy enough to find a good bankruptcy lawyer who can use the bankruptcy code repeatedly to shelter your fortune and avoid paying your debts. Trump has used bankruptcy to stiff his creditors at least four times.
The real scandal here is that Trump and other hugely wealthy people can get away with this, and do so all the time. It's just another way the system has been rigged - by rich people who buy off politicians to alter tax, bankruptcy, and other laws and regulations to their advantage, just like Donald Trump has done.
"As a businessman and a very substantial donor to very important people, when you give, they do whatever the hell you want them to do," Trump told The Wall Street Journal in July 2015. "As a businessman, I need that."
Trump isn't and was never a smart businessman. He was and is smart at gaming the system. There's a difference.
We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.