Before diving into the meat of this column, a caveat — it may be that the leak of a 1995 Donald Trump tax return by the New York Times showing a loss of some $900 million or more, an amount which could have allowed the Republican presidential nominee to carry forward against taxable income for some 18 years, is merely the first of a number of bombs the Democrats have planned in order to destroy him in advance of next month’s election.
Should that be the case, we’re about to see a brilliant, and diabolical (not to mention highly corrupt and illegal as hell), political takedown executed against a highly vulnerable GOP nominee who should have protected himself and his party far better from just such an eventuality. We said in this space months ago that Trump should have disclosed his tax returns and moved that issue off the table to prevent just that possibility, and if there are multiple leaks showing dishonesty or illegality in his taxes, Trump’s campaign could be dead — and rightly, if unnecessarily.
But for the purposes of this column we will assume that what the Democrats, the Clinton campaign, and the New York Times, among which there are only imperceptible differences, have on Trump’s taxes they have already delivered to the public eye. And if that is true, Trump absolutely should have disclosed his returns.
Because he has nothing to be ashamed of.
At least not politically. No business leader likes to admit of a major financial reversal; to a real estate magnate, for example, the evidence of a deal gone bad or a deep pool of red ink can be a major disgrace and the loss of much of a hard-won reputation as a winner. In Trump’s case that would seem to be doubly true; his entire brand is based on selling himself as smarter, tougher, harder-working and shrewder than the competition, and the knowledge that 21 years ago he took almost a billion-dollar bath can’t be a pleasant memory.
But pride is one thing and politics is another.
A number of things are true here. The first is that Trump made a lousy bet on owning so much of the Atlantic City gaming and tourism market; there isn’t anything magical about a second-rate burg on the Jersey Shore, and once casino gambling became legal in places all around the country there was nothing in particular that would draw tourists to Atlantic City rather than the Mississippi Gulf Coast, for example. Trump’s losses in 1995, which came from the bankruptcy of the casinos he owned in Atlantic City, were a perfect reflection of what the competition of legalized gambling mushrooming all over the country in the early 1990s did to that market. He should have seen it coming, and he didn’t, and his investment was wiped out.
Those things happen, even to good people in business. Entrepreneurs will on occasion take it on the chin, and Trump did. Ordinary Americans can understand the loss, and while there might be other items available to demonstrate what a terrible man Trump is, this isn’t one.
Most disturbing here is the idea that Trump got some sort of government bailout because the law allows him to have carried a loss forward and thus wash away income for tax purposes in years following 1995. This flies in the face of fundamental principles of economics, as our readers know — if you don’t allow an investor to carry forward a loss he incurred on a bad investment, he will cut down on those investments he does make and the economy won’t benefit from the circulation of his money.
Ryan Ellis of Forbes explained this well…
In fact, a net operating loss is very common in businesses. As Alan Cole of the Tax Foundation pointed out this morning, about 1 million taxpayers had an NOL in 1995. It results from business deductions exceeding business income in a particular year. Under tax rules, this loss can be carried back up to two years, and carried forward up to twenty years. If this is a “loophole,” what are these political reporters suggesting? That a business loss should simply be eaten by the taxpayer? That Uncle Sam should be a full partner in your profits but not in your losses? How is that fair?
But it’s clear that the howling dunces who think Trump’s potentially carrying forward of his 1995 loss to minimize his tax burden in better years down the road don’t understand the fundamental principles of economics.
Nor for the principles of fair play or irony, as it happens. We find out that the New York Times itself is no stranger to the principle of carrying losses forward, and neither is Hillary Clinton. Rich people, and even not-so-rich people, who avail themselves of competent tax preparers will quite often make use of the tax code to hold onto their money — and if a bad year creates losses that can wash against income in a better year, those competent tax preparers will always make use of that practice.
It’s OK for the New York Times to do it, it’s OK for the Clintons to do it and it’s OK for Trump to do it.
What isn’t OK is for the New York Times to run with an anonymous leak of Trump’s tax information. As said above, Trump should have released his taxes as a matter of savvy politics. But as an American citizen he has the right to keep his returns private, and whether it influences anyone’s vote or not it should be a matter of no controversy that his right is respected and protected. Clearly this wasn’t done — and we can only speculate as to who conspired with the Times to violate the confidentiality of Trump’s records.
Was it the IRS? Was it someone in the state revenue departments in New York or New Jersey? Was it a lawyer or accountant breaching a fiduciary duty to Trump?
The identity of the leaker ought to be uncovered and the villain prosecuted to the hilt, though without Trump being elected next month we know that won’t happen. His taxes are no threat to our freedom and the rule of law, but the outlaw character of his corrupt enemies on the Left surely is.