This is a guest column; ‘Mihael Willman’ is the pseudonym for a concerned Canadian -JG.
Here we go again! Several parts of this lengthy column seem speculative, and there are no references, but Mihael is certainly entitled to his opinions… JG.
Trump and Taxes
Many Republicans, while claiming they are upset by and disagree with some of the things Trump has said, still support him because they say that other issues are of greater importance. One of these is the economy, which they believe he, as a “successful businessman,” is in the best position to address. However, as everyone is aware, while Trump has managed to amass considerable wealth, he has often done this at the expense of others, his partners in businesses that have gone bankrupt, the banks which held the loans and small contractors and employees who were not paid what was owed. In one instance, he told his contractors to take a fraction of what he owed them or fight his lawyers in court for years.
When Clinton campaigned in Atlantic City in front of a closed Trump hotel and raised this issue, a Trump spokesman countered: “you would put an oxygen mask on first, before helping someone else.”
A clear picture of just how he has carried on business over the decades would be available if he had the courage to release his tax returns. But Trump knows that what is contained in them would probably shock Americans, particularly his adoring supporters. That is, of course, only if they have not been completely blinded by the halo they have surrounded him with.
In 2011, when he first considered running, Trump promised to release his tax information “at the appropriate time,” if Obama first released his birth certificate. Well we all know how that turned out. The “appropriate time” (another favorite Trump phrase) apparently never came and Americans are still waiting with bated breath to see just what he’s hiding and what he doesn’t want them to learn about his business tactics.
Over the years Trump has made it appear as if he was an upstanding corporate citizen, dutifully paying his share of taxes to support the operations of government. In 2011 he said, reminiscent of Romney’s 47 per cent, that half of the country was not paying anything in taxes, while hedgefund people should be paying more in taxes. At one time he even went so far as to say: “even if you don’t earn a lot you should pay a little. . .” He also commented on the fact that people were evading taxes which in his opinion was unfair. Talk about ultimate hypocrisy.
Though Trump claims a personal wealth of $10 billion, (Forbes placed his net worth at $4.5 billion in 2015) in his financial disclosure form he reported that his worth was at least $1.5 billion. This is a far cry from his usual claim of being worth $10 billion. Yet this doesn’t provide an accurate picture of his finances. Several of his companies have a debt of at least $650 million, though in his campaign filings he reported just under half that amount, namely $315 million.
One office building, of which he is part owner, has a $950 million loan held, among others, by the Bank of China and Goldman Sachs. In addition, according to The New York Times “a substantial portion of his wealth is tied up in three passive partnerships that owe an additional $2 billion to a string of lenders.” Two of the lenders are, once again, the Bank of China and Goldman Sachs.
With investments all over the world, their location hidden in those tax returns, there is no way to know just how his personal business might impact his decisions on foreign issues. Whereas other presidents and vice-presidents have placed their investment holdings in a blind trust, so as not to have a conflict of interest, Trump has no intention of doing so. While he plans on turning over daily control to his oldest three children, he said he would keep his companies and investments. During a debate he declared if he becomes president “I couldn’t care less about my company. It’s peanuts.” Does anyone believe that, after all he has done to amass his fortune, as president he’ll no longer be interested in how it’s doing? Not likely.
As president, The Times reported, Trump would be in a position to make decisions which would have enormous effect on both his personal net worth and his business empire. Can anyone spell “corruption?” So-called “crooked Hillary” would be a minnow to Trump’s whale. And anyone who believes that Trump would not use the presidential office to enrich himself and his family, even at the expense of the best interests of the United States and its citizens, still believes in the Tooth Fairy.
Almost from the beginning, Trump has refused to release his tax returns, claiming that his returns were under audit. (In some interviews he actually said it might not make political sense to release his returns. Probably because it would contradict his various claims of business acumen, charitable generosity and much more.) However, being audited doesn’t prevent him from releasing them, while tax returns from 2008 and earlier are not under audit. The same excuse was parroted by everyone in the campaign. In September, Donald Trump Jr. went off script and stated that the reason for not releasing them was that they would create a distraction and would result in raising a lot of questions. What kind of questions might one ask? Questions about his actual worth, how much he really gives or doesn’t give to charity, in which countries he has investments? The list is long indeed.
We do know that for 1978, 1979, 1984, 1992 and 1994, he paid no income taxes from reports of the New Jersey Casino Control Commission. Anyone want to bet that the reason he’s not releasing other tax returns is that there are probably more years he hasn’t paid then years he has, or possibly even no years? In 2015 Trump said he knew people who didn’t pay taxes and while he was saying this he was probably laughing and saying to himself “I’m probably the worst of the bunch, but that’s something you’ll never know, if I can help it.”
A glimpse of what he probably is hiding came to light when his 1995 tax return was leaked to the media. It showed he claimed losses of $915,729,000 that year which could have him avoid paying federal taxes for the next 18 years!
David Cay Johnston, author of “The Making of Donald Trump” in a recent PBS interview stated that the average American taxpayer saves $6,000 a year, at most, from depreciating real estate. Trump, on the other hand, can take all the money he earns from all sources and “wipe out that income for tax purposes with depreciation.” By spending at least 15 hours weekly (which according to Congress is full-time) managing his own real estate, unlimited depreciation can be used to offset all other income, thus paying little or no tax. Rather a strange system where one can depreciate properties, at the same time that they are actually increasing in value. And who makes up the difference? The suckers who are supporting and voting for him, and all the other law-abiding tax-paying citizens.
An important point raised by Johnston was: “I don’t think most Americans understand that, for certain very wealthy people, our federal income tax system is a subsidy system that makes them richer.”
While these actions are legal, thanks to tax exemptions or loopholes which favor the rich, Johnston raised the possibility that Trump has committed tax fraud. In 1984, Trump appealed his New York state and New York City audits which were initiated because he reported no income from his consulting business, while at the same time claiming $600,000 in deductions for which no receipts, checks or other documentation was produced. When his accountant was shown a photocopy of the return, the original copy somehow having mysteriously disappeared, he admitted that it was his signature, but he hadn’t prepared the return. According to Johnston: “Now, those two elements, zero income and huge deductions, combined with his own tax guy testifying under oath, that’s my signature, but I didn’t prepare that tax return, those are very strong badges of fraud.”
Trump is guilty of committing sales tax fraud in what is known as the “empty box scam.” Apparently non-residents of New York state can avoid paying sales tax if goods, in this case jewelry, was mailed to an out-of-state address. Trump purchased jewelry worth $65,000 from Bulgari and empty boxes were sent to an address in another state. While he was never charged, the store manager and one of the owners were prosecuted. The state prosecutor felt that the store was the greater violator, while Trump and other customers helped it build its case. Yet it is Trump and those who didn’t pay the sales tax who benefited from this scam.
Is this the kind of citizen his followers would like to emulate? One who looks out only how to fill his own pocket at the expense of society at large, not paying his fair share of taxes to support the country that has given him such wonderful opportunities? Someone who has engaged in questionable conduct, but who now claims that because he has taken advantage of these tax loop-holes, there is no-one better than he, himself, to close them.
The list of other examples includes avoiding payment of $1.75 million on the purchase of a luxury yacht in 1986 for which Trump paid $30 million, and depriving New York City of $3 million from the profits from the Grand Hyatt Hotel.
Another attempt to evade paying his share of taxes occurred with his Trump National Golf Club in Westchester County, NY. On a candidate disclosure form he declared that the club was worth more than $50 million. Yet when it came to tax time, his lawyers claimed it was only worth $1.35 million, a valuation which would reduce his property tax by 90 per cent. While houses may be cheaper in the U.S. then they are in Canada, a 147 acre golf course with luxury clubhouse is certainly worth considerably more. Bought for $8 million, Trump spent another $45 million to build the golf course and clubhouse and then has the gall to claim it is only worth $1.35 million.
Just how many “brilliant” businessmen would invest $53 million in a property which was then worth less than 3 per cent of the original investment? Only if they wanted to lose all their money. After this information was published, Trump’s lawyers raised the value of the golf course to $9 million, still far below its actual value. Apparently this is not the first time his lawyers have challenged his property taxes throughout the U.S. Wouldn’t it be nice if all of us could personally estimate the value of our properties and reduce our taxes as low as possible?
Dana Levenberg, the Ossining town supervisor said what everyone, especially Trump supporters should be saying: “Personally, I would hope that anybody that is representing our country as president of the United States would also be willing to pay their own fair share of taxes on properties and on whatever it is on their income. That’s really, in my opinion, what makes America great, is everybody pitching in and doing their part.”
With release of the 1995 tax return, disclosing a loss of nearly $1 billion, which meant he could avoid paying taxes for the next eighteen years, Trump’s various spokesmen tried to put a positive spin on this news. They claimed, without a single blush among them, that by managing not to pay taxes, Trump was showing “unparalleled business acumen.” No mention here that anyone losing nearly $1 billion in one year actually reveals the exact opposite.
Some of the spin is absolutely mind-boggling. Governor Christie, came up with Trump’s excuse that knowing how to use the tax system made him “uniquely qualified” to reform the tax code, as well as a genius to be able to manouver around the tax code. Rudy Giuliani, former mayor of New York City also called Trump “a genius” and that he was just acting like any other “responsible” businessman to save money for his businesses. To show how disconnected he is from ordinary people, Guiliani actually accused the poor of also exploiting the tax code in order not to pay taxes!
These statements make one think of Queen Marie Antoinette and her “let them eat cake” response to the poor who were rioting because they didn’t have bread to eat. Trump has probably paid more to his lawyers and accountants to find legal and possibly illegal tax loopholes, then he has ever paid in taxes. He is the “Poster child” for the widening gap between rich and poor and not someone who is now suddenly interested in improving the lot of ordinary Americans. His entire business career is proof of that.
Having spent the last 50 plus years looking out for number one and how to exploit every loop-hole for his own benefit, he is now suddenly going to become altruistic? Sorry, a leopard doesn’t change its spots, a shark doesn’t become a minnow. A person who champions greed his entire life, doesn’t become a generous, charitable humanitarian concerned about the rest of society.
During the debate when Clinton stated that Trump refused to disclose his tax returns because he didn’t want Americans to know that he paid no federal tax, Trump arrogantly responded: “That makes me smart.” He went on to say that Clinton’s donors do the same thing, as if she was somehow responsible for any of their actions. One of the names later raised was that of investor Warren Buffett. In reply to Trump’s accusation, Buffet said that he has paid taxes since 1944 when he was 13 years old, and still has copies of all his 72 tax returns. Last year he paid $2 million and has frequently commented on the fact that because of U.S. tax codes, as an investor he pays a lower tax rate than his own secretary.
Trump later had the temerity of blaming Clinton for not having done anything over the last thirty years to reform the tax code and close all the tax loopholes he has managed to take advantage of. One lone individual, no matter how well motivated, is totally powerless to undertake such a reform, especially when faced by legions of lobbyists hired by rich and powerful people, like Trump, to ensure that nothing is actually done. But of course, Trump didn’t mention that.
Trump may have “brilliantly used those laws” as he says, to avoid paying federal taxes, but his tax plan doesn’t mention anything about closing those very same loopholes.
The New York Times reported that Trump received New York City tax breaks amounting to nearly $885 million over the last 35 years for his real estate projects. When the city tried to deny him tax breaks for a pair of skyscrapers he successfully sued three city administrations.
In an interview in which he was asked to characterize Donald Trump and what he stands for, Ralph Nader described him as a “corporate welfare king.” He went on to say: “He’s a freeloader. He’s a freeloader on the backs of taxpayers who have to make up the difference for the taxes he doesn’t pay, or get less public services.”
A favorite accusation of Trump is that the political system is corrupt, with influence being bought by wealthy individuals through political donations. One would think that this means he disapproves and would never do anything of the kind himself. To the contrary. Trump has often bragged that he gives political donations to curry favor. “I give money to everyone and when I call them, they kiss my ass.” Yet he continually attacks Clinton for being part of a corrupt system wherein rich donors influence politics and using “pay to play” tactics.
In October, the Wall Street Journal reported that records showed Trump, his family and business associates have frequently donated to New York state attorneys general since the 1980s, while they were in the process of considering decisions affecting his businesses.
In the 1980s he contributed tens of thousands of dollars through 18 subsidiary companies to bypass contribution limits, to New York City Council president. The next decade he was fined for exceeding the annual limit on campaign contributions by $47,050. Then in 2000 he was fined $250,000 by the New York state lobbying commission for not disclosing the extent of his lobbying of New York legislators.
From 2001 to 2014 Trump gave $140,000 to twelve people who were state attorney generals or candidates for that post according to records. Some of these individuals returned the money.
In recent years he has donated tens of thousands of dollars to attorneys general in Florida, Texas, New York and California whose offices were investigating complaints regarding Trump University. To show that he didn’t discriminate between Republicans and Democrats, two belonged to each political party. The greatest controversy arose with regards to the recent $25,000 donation to a PAC (political action committee) supporting Florida attorney general Pam Bondi. Not only did it occur just days before her office decided not to investigate Trump University, but the check came from the Trump Foundation, which is illegal. When made public, the Trump organization bent over backwards to explain a simple “clerical error,” as the result of a “remarkable string of coincidences,” was responsible for the check being sent from the foundation’s funds.
While there is still a lot we don’t know about his business dealings, because of lack of access to his tax returns, there are two other interesting bits of information. Trump conducted illegal business in Cuba in violation of the embargo, at the same time as he publicly declared that he supported the embargo because he disagreed with Cuba’s regime. So how can anyone believe anything that he is saying today? He may also be involved in a fraud involving the Trump Soho hotel in New York City. The executives of the property development firm Bayrock sought to evade paying tens of millions in taxes. Trump licensed the use of his name and owns 15 per cent share of Trump Soho, while his children Ivanka and Donald Jr. own 3 per cent.
While Trump appears to have avoided paying taxes for possibly decades, legally or illegally, from 2007 to 2014, Bill and Hillary Clinton paid a federal tax rate of 31.6 per cent.
Trump and the Economy
Trump regularly parrots that he will “Make America Great again” and promises that he will bring jobs back to the U.S., yet both he and daughter Ivanka produce their line of goods in China and elsewhere. Why? What’s his excuse for not producing in America? Not enough profit margin? But according to Trump, that’s what businessmen do.
In 2011, in a CNN interview, he declared: “When it comes to manufacturing, China is making all these products. They could be made in North Carolina. They could be made in Alabama. They could be made in lots of our places and right now they’re not.” The simple respond would be, and why are they not made in the U.S.? It’s not as if China is producing these goods on its own. Sweaters, warm-up tops, golf hats, Trump teddy bears, ties, dress shirts, cufflinks, leather belts, etc., sold under the Trump brand name, are all made in China, while suits are made in Mexico and Vietnam. The decision comes from the top. If Trump was really so concerned about the loss of jobs, he would lead by example and have all these goods produced in the U.S. But that would probably mean a smaller profit margin, and in his world, his bottom line is more important than American jobs.
When it was pointed out to him this year that he outsources his goods to several low-income countries, Trump blamed the countries in question for their lower wages and for devaluing their currency.
He promises that if he becomes president, American corporations who move their production offshore will be hit with 30 per cent import duties on goods brought back to the U.S. Will that tariff also apply to the goods he and Ivanka produce offshore? Somehow I doubt it.
Trump’s support in large part comes from workers without a college education, many of whom have probably lost their jobs because of outsourcing to lower-wage countries. They have accepted his rhetoric about making America great again and bringing good paying jobs back to the U.S. Yet he is one of those people responsible for lost American jobs.
Not only that. $7.25 an hour is the minimum wage in U.S. Rather than raise the minimum wage, which is the policy of Clinton and the Democrats, Trump believes that states should have the right to lower the minimum wage below $7.25, at the same time as he pushes for tax cuts for the ultra-rich like himself. I suppose if wages were to be decreased to the same levels as China, then he might consider repatriating production to the U.S.
And while people were losing their homes in the mortgage security crisis, Trump was rubbing his hands together and salivating about the profits he could make buying up the depressed properties. In one interview he was hoping for a real estate crash so he could step in and buy saying: “I’m a businessman.” Clearly a caring individual concerned about the financial health of ordinary Americans.
So we have years and years of paying no federal taxes, sales tax fraud, donations to influence politicians to make favorable decisions on his behalf, frequent bankruptcies, outsourcing of production, etc., and Trump’s supporters believe he is the one to revitalize America’s economy?
The following was received after publication of the above article. Mihael objects to my suggestion that some of his comments are speculative. I am posting his objections, but here are three examples of what I consider to be speculation (and/or presumption) in the above article, whether or not taken from other sources:
“Trump knows that what is contained in them (his tax returns -JG) would probably shock Americans, particularly his adoring supporters.”
“Trump would be in a position to make decisions which would have enormous effect on both his personal net worth and his business empire. Can anyone spell ‘corruption?’.”
“And anyone who believes that Trump would not use the presidential office to enrich himself and his family, even at the expense of the best interests of the United States and its citizens, still believes in the Tooth Fairy.”
Here is the message:
Thanks for posting my article. I think the following should be attached to it, since you believe that there is speculation in the article. All the info came from reliable sources.
In all the years I have conducted research, whether primary or secondary, I have never speculated, relying exclusively on trusted sources for my information. If I should speculate on something, I say so outright. With regards to Donald Trump, no-one in their right mind would dare to “speculate” or base writings on unreliable sources. The reason for this is that Trump has initiated over 3,500 lawsuits over the last thirty years, or on average about one every three days.
Beyond mentioning the occasional publication in which some information may have been published, I didn’t quote or provide sources. However, as this appears to raise questions as to the accuracy of my data, I include the original sources for further reading. Extensive and in-depth research has been done by a number of reputable reporters. There is more than enough information regarding Trump’s questionable financial dealings easily available on the internet. Who knows what is hidden within the unreleased tax returns.
Donald Trump is the consummate self-promoter, revealing a public self which is often in contradiction to his actual self, with the result that his supporters believe without question just about everything he says, no questions asked.
Some of the articles examined were:
Trump used US$258,000 from his charity to settle lawsuits and to buy a portrait of himself