New York Times Bombshell Nothingburger: During the Period When Four of Trump's Businesses Notoriously Declared Bankruptcy, Trump Himself Suffered Losses and Paid Little Income Tax on the Money He Was Not Actually Making (Due to the Bankruptcies)

John Sexton digests the New York Times' bomshell report that when a man suffers four bankruptcies of major companies he owns, he's not making much if any money.

Sexton notes that the Times gets cagey about how they got these illegally-leaked documents. The Times claims they were from someone with legal access to the documents, as if legal access means "the legal right to release, without the taxpayer's permission."

Nice little soft-shoe there, Times.

Who had legal access to the information in Trump's returns? Is that the CPA or attorney doing his taxes during those years? Even assuming this person had legal access to the information, how is it legal to leak that information to the media? This Bloomberg primer on tax confidentiality suggests there are very few circumstances where a tax professional can reveal information without the express permission of the person involved. I'm assuming whoever leaked this information didn't have Trump's consent.

In any case, I'm not sure how much impact this is going to have. It's not as if the fact that his casino empire was a money loser was a secret until now.

Your stockbroker has legal access to money in your account, and limited permission to use it to buy and sell stocks on your behalf.

That doesn't mean he has the legal right to take all your money and give it to the New York Times.

Times deliberately deceives readers in trying very hard, and by convoluted, lawyerly language, to suggest that this leak is somehow legal.

But they want you trust their word about everything else they say.

The New York Times has a point, though: Should we trust the word of a business that loses so much money on a business deal? Should we trust the political judgment of a brain trust that loses a billion dollars on a single acquisition, for example?

By the way, there's also the consideration that taxable income is only partly correlated with actual income.

I saw the NYT spread on Trump's taxes. They are trying to turn it into a scandal. It's not a scandal. Trump is a real estate developer and real estate developers can almost always show losses. This is a total disinformation campaign that takes advantage of people not knowing the tax code.

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I had dinner with a real estate developer a couple of years ago. He told me his goal was to build a building and only have it 60% occupied. That way, he could take a gigantic tax loss. So, like most things Trump, this is all about nothing.

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When you lose money, you can roll the losses ahead. They call this tax loss carryforward. If you are an entrepreneur with a variable income you become infinitely familiar with this provision of the tax code. It's never a goal to lose money, but when you do it’s nice that you can roll it forward as you dig out from the loss.

If memory serves, when Twitter and FaceBook-approved Conspiracy Theorist Rachel Maddow announced her BLOCKBUSTER! (nothingburger) Trump tax leak, it turned out that much of the losses in some years was just carried-forward losses from earlier YUGE years of losses.

The idea of this is simple: Let's say in one year you are absolutely wiped out. You lose one hundred million, and pay no tax.

The next year you earn $100 million.

How should you be taxed? You weren't taxed that one year you lost $100 million. But should you pay normal tax rates for the next year -- say, $50 million in federal taxes.

Or would a rational tax code look at these two years together and say that really, for both years combined, you actually made about zero dollars cumulatively?

Legislators have decided taxing half your money that second year wouldn't be a fair representation of your actual multiyear-term income, and so they let you take the losses from that one year and carry them over to reduce your income in later years.

But you know, we're in the End Times now, the Time of Chaos, and Democrats and their media masters (yeah, it's the media calling the shots now, especially social media tech monsters) will decide that following the law is now against the law.

posted by Ace of Spades at 07:15 PM

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