Election 2020
The Political Implications of Trump’s Tax Avoidance
The October Surprise came early this year, but what does that mean for the race?
Working people all across the country — nurses, teachers, and waiters alike — have paid more in federal income taxes than the billionaire president.
Caught in one of the more predictable scandals during his tenure as President, The New York Times reports that Donald Trump paid just $750 in federal income taxes in 2016 and 2017. With over two decades of tax documentation obtained, the amount he paid in taxes represents just the tip of the iceberg in comparison to the write-offs and refunds Trump has enjoyed deep below the surface.
Trump paid zero in income taxes for 10 of the last 15 years, and this was due primarily to the losses he reported to the IRS. The Times make clear that this tax information shows the reason Trump’s accountants were able to write in “0” on Line 56 of his 1040 Form:
“The answer rests in a third category of Mr. Trump’s endeavors: businesses that he owns and runs himself. The collective and persistent losses he reported from them largely absolved him from paying federal income taxes on the $600 million from “The Apprentice,” branding deals and investments.” — The New York Times
By using the available tools in the tax code, Trump’s team was continuously able carry over significant portions of his business losses forward to the next year in order to reduce his tax burden. A tax provision the Times refers to as, “the background music to Mr. Trump’s life.”
So, the President of the United States routinely and aggressively avoided paying income taxes in the country where he is the chief executive. Working people all across the country — nurses, teachers, and waiters alike — have paid more in federal income taxes than the billionaire president. Instead, Trump has siphoned million upon millions in refunds with the largest sum of $72.9 million in 2010 during the Great Recession. This refund regained all of the money Trump dished out from 2005–2008, including interest.
This return in 2010 is the point of greatest contention with the IRS where Trump is still litigating what the federal government suspects was an illegitimate request. As of now, the case is largely stalled. However, if the IRS were to retract the 2010 refund, then Trump would owe the full $72.9 million sum with interest — around $100 million.
For me, and many Americans, the details surrounding Trump’s tax evasion, revenue losses, write-offs, and audits are unsurprising. It is vindicating to know that this information has been obtained and confirmed by a news source, but really the American people gained details that provide clarity to something we already knew: Trump ignored calls to voluntarily release his tax returns because the contents were damaging to both his reputation as a successful and profitable business giant and his unsupported claim to have paid his fair share of taxes.
This news is hardly breaking.
Throughout Trump’s tenure as President, we have learned of countless scandals in his personal and professional life. Further, it should not be lost on us that this tax evasion phenomenon is commonplace in the United States where American billionaires rarely pay the taxes they should — and the tax code is written to allow for it.
Robert Reich, former Secretary of Labor under President Clinton, tweeted that, “Donald Trump is not alone. The richest 1% of Americans is responsible for 70% of all unpaid taxes.”
Recently, I wrote a piece on how this month’s news, most notably the death of Ruth Bader Ginsburg, would hardly move public opinion and vote choice heading into the election. In short, Biden’s roughly 7 point lead hasn’t wavered, no matter the news cycles, since June. 90% of voters are already decided in their vote choice this Fall, so it is difficult for the campaigns to gain more ground by overtaking the news cycle.
Due to this New York Times report mostly confirming what many Americans already suspected, I do not anticipate major changes in public opinion and polling following this news cycle. None of the major stories of this year have changed the frozen-solid polling we’ve seen. However, these new and detailed revelations may hurt Trump’s re-election bid on the margins, especially with political independents. If the election comes down to a small number of votes, damaging news cycles like these can make a difference.
It shows not his genius aptitude for business, but morally bankrupt narcissism rooted in a harmful life-long philosophy — to absorb as much wealth and status as possible at the expense of others.
I do want to acknowledge the effect that this report can have on the race, especially given that the Times will be releasing new information in the coming weeks. Yet, a story like this does little to convince either party’s base of anything they didn’t believe already. We’ve been through this before.
Trump’s base, as well as most GOP officials, spelled out in black and white their exoneration of the President’s alleged conduct years ago when the nation called for the release of his returns. Republicans, pointing to the fact that Trump utilized the already written tax codes to his advantage, will attempt to re-frame this new report by pointing to what they perceive as an excellent business intellect.
Even so, the details of Trump’s concentrated attempts to avoid paying income taxes solidifies the notion that he only takes and never gives. It shows not his genius aptitude for business, but morally bankrupt narcissism rooted in a harmful life-long philosophy — to absorb as much wealth and status as possible at the expense of others. This is not the first example, but just the latest in a sequence of failures by this President. Now the failure is to financially support, as is our duty as citizens, the collective funding of our communities. Unfortunately for Trump, we are very close to Election Day.
Since Joe Biden is already enjoying such a strong nationwide lead, as well as in the tipping point states, it may be that the Biden campaign is reaching a ceiling of support. That’s not necessarily a bad thing given that Biden’s current polling held up through Election Day would provide him a large and decisive victory. Also, much of the effects of this story will depend on how much the Biden campaign chooses to focus on it and whether or not they believe it to be an important talking point among the multitude of other dominant stories we’ve seen this year.
Headlines detailing a $750 tax bill for Trump requires damage control by the Trump campaign. This will likely come in the form of switching the story to something else, possibly their own October Surprise, instead of attempting to spin the story in their favor. This isn’t the kind of story any strategist wants to focus on for longer than they must. While the Trump campaign braces for the potential impact of this story, the Biden campaign will obviously need to be on the look-out for retaliation closer to Election Day.
The President will not want $750 to be the number voters think of when they fill out their ballot. It is clear that Trump is not on track to re-election.
