Economist Daniel Reck on why the Trump tax returns matter

[muriel_volestrangler]

Not that I think many here doubt that, but these are good explanations from someone who knows what they're talking about.

Link to tweet

Unrolled thread: https://threadreaderapp.com/thread/1310506379459866624.html

Here is a thread about the bad takes I am seeing on Twitter about the Trump tax story. If your gut reaction is nihilistic, cynical, or dismissive, I am going to try to change your mind.

BAD TAKE 1: this is all 100% legal, the rich have loopholes.” We can’t diagnose evasion conclusively from the return alone, but the reporting describes some super suspicious activity. Three things jump out:

1) He is in protracted litigation with auditors that could saddle him with >$70 million in taxes. This is over a dubious loss carryforward that he probably wasn’t allowed to claim.

2) >$20 million in consulting fees apparently paid to his kids. This is a common tactic to dodge estate/gift taxes, but paying higher than market salaries is illegal. Especially telling: some of his business partners apparently had no idea their business was hiring “consultants.”

3) a large number of personal expenses claimed as business expenses. Flights, hairstyling, you name it. Also commonly done, but not legal.

Honorable mention: the reporting about the Seven Springs estate looks pretty fishy as well.

Anyway, these really don’t look legal, these look like Trump violating the tax code and daring the IRS to enter into years of litigation to do anything about it, which in one instance they’ve actually done.

(There is some old-fashioned legal tax avoidance going on too though!)

BAD TAKE 2: “he’s either the worlds worst businessman or the world’s worst tax cheat.”

This one I’m forgiving of because this is where I was myself before the new reporting. But after reading all this, the inescapable conclusion is that it’s BOTH.

Ok he may or may not be the “world’s worst” tax cheat. But the activity above makes it plain he is trying every trick in the book to cheat.

So, is he actually making huge profits and just claiming all these losses to dodge taxes?

Well, he is also saddled with at least $400 million in debt, up to $1 billion by some others’ reporting. Some particularly huge loans come due in 2020 and he is making zero payment on the principle. That’s not something you’re a prospering businessman.

So both things must be true: he violated tax law repeatedly and his businesses are failing. It’s no longer either/or, not with what we know now.

BAD TAKE 3: “We knew all of this already.”

No, we simply didn’t. To use an old metaphor, we were stumbling around in the dark feeling out little pieces of the giant elephant in prior reporting, but now we’re seeing the whole elephant. We hadn’t even seen all the pieces before.

(Ok it’s not a perfect metaphor because there is even more beyond the tax returns that we still don’t know. We will probably never see the entire big picture, but further investigation by journalists or prosecutors could reveal a lot.)

BAD TAKE 4: “this doesn’t matter.”

This take is always bad because we the people get to decide whether it matters with our votes and our speech. But also, think about what a potential future Biden administration (*knocks on wood*) can do with this story.

This reporting created more public attention to tax avoidance and evasion by the rich in one day than we have ever had. It is a roadmap of ways the wealthy aggressively minimize their taxes. Democrats can and should leverage this story to level the tax playing field for everyone.

In summary: This really is news. He’s a terrible businessman, but he also seems to have actually cheated. And it matters. We can do something about it. The first thing we can do about it is go and vote.

My notifications are going nuts so a few corrections:
1) the loans are due in 2022 according to the Times story, not 2020
2) "principal" not "principle." Embarrassing.
3) Left out some words in the tweet about debt as well, I think you can work out what I meant.

[stillcool]

1. Cynical and dismissive right here...

hadn't thought of how this could shine a light on the written by the rich, for the rich tax codes. Seems to be a lot of stuff swirling and coalescing...l

[Cha]

2. Rt!

[pansypoo53219]

3. go biblical on their bible thumping asses. render unto Caesar what is his. INVEST in america.