Your accountant comes to you and tells you he knows of a legal tax strategy you can use to keep millions of dollars that would have otherwise gone to the IRS. Not a cheat. Not a “loophole.” Not fraud. A completely legal way to minimize your tax burden.
Would you say no? Would you say, “Oh, well, I feel it’s my duty to overpay my taxes. It’s the way George Washington would have wanted it.”?
But apparently, that’s what the New York Times, the Clinton campaign, and the rest of the liberal media believes. By acting as though it is a “bombshell” to reveal that Donald Trump claimed a $916 million loss on his 1995 tax returns, they are operating under the assumption that Americans are so dumb and jealous that they’ll turn away from the Republican nominee in droves. How DARE he use the system to his advantage! The rest of us understand it’s our patriotic duty to send as much of our money to the federal government as we can possibly afford! Good Americans let the IRS keep it all.
There are a few aspects of this worth highlighting, but the silliest part is this: Donald Trump never sold himself as an innocent little angel. From the beginning of his campaign, he admitted using money to influence politicians, using regulatory loopholes to further his real estate empire, and using every tax break he could get his hands on. A major component of his pitch comes down to this: I know how to fix the system because I’ve been using it to get rich and powerful for decades! And now we’re supposed to be shocked and appalled?
Second, Trump’s strategy was completely above board. From the Wall Street Journal:
The tax treatment of losses, bound to become a subject of national debate, is a typically noncontroversial feature of the income tax system. The government doesn’t pay net refunds when business owners lose money, but it lets taxpayers use those losses to smooth their tax payments as they make money. That reflects the fact that “the natural business cycle of a taxpayer may exceed 12 months,” according to a congressional report.
In other words, it may get under your skin, viscerally, to see a billionaire get away without paying federal income tax, but it makes no sense to hold it against Trump. If you feel the need to be angry at someone, direct your rage at the IRS.
There is also, hilariously, a Pot-Kettle situation here. According to Zero Hedge, Hillary Clinton claimed a $699,540 capital gains loss in 2015, using the very same “carryover” strategy that Trump used in 1995. Furthermore, The New York Times, which broke the Trump story, paid no income tax in 2014. Despite making a pre-tax profit of nearly $30 million that year, the Times got a TAX REFUND of $3.5 million.
This was meant to be the culmination of the Trump Tax Returns story that the Democratic Party has been pushing for the last six months. When you move past the headlines, though, it’s just another liberal illusion.