Call it the September Surprise. Somehow, without saying how—The New York Times has gotten its hands on what it claims are two decades’ worth of President Donald Trump’s tax returns.
“The Times obtained Donald Trump’s tax information extending over more than two decades, revealing struggling properties, vast write-offs, an audit battle, and hundreds of millions in debt coming due.”
To which the only possible reply is: So what?
Oh, there’s more, of course—after all, Trump’s personal taxes have been the great white whale of the “resistance” from the time the president announced his candidacy and did not, as promised, release his tax returns. The newspaper breathlessly announces, for example, that the president “paid no federal income taxes in 11 of 18 years that The Times examined. In 2017, after he became president, his tax bill was only $750.”
Further: “Many of his signature businesses, including his golf courses, report losing large amounts of money—losses that have helped him to lower his taxes,” and “the financial pressure on him is increasing as hundreds of millions of dollars in loans he personally guaranteed are soon coming due.”
The newspaper alleges no illegality—“nor do [the records] reveal any previously unreported connections to Russia”—and it observes with a straight face that “Mr. Trump lost so much money that he was able to avoid paying income taxes for eight of the 10 years.”
If everybody tried to avoid taxes by earning a net total of zilch, we’d all soon be broke.
One case involving a Trump claim to a $73 million tax refund is currently being audited. Ironically, this refund was signed into law by President Barack Obama as part of his response to the Great Recession. Using essentially the same legal “loophole” as Trump, Amazon paid the princely sum of $0.00 in corporate income taxes in 2018—on a global revenue of $232.9 billion. The e-commerce giant paid the same amount in 2017: nothing.
Memo to the NY Times: People with no income as defined by IRS statutes have no federal tax liability. In fact, some people who owe nothing even get a “refund,” via the Earned Income Tax Credit.
Meanwhile, lifelong “public servant” Joe Biden and his wife earned more than $15 million by cashing in after his term as vice president ended in 2017 via speaking engagements and books—deals they wouldn’t have gotten otherwise were it not for his “service.”
Illegal to Release Without Consent
Also, no citizen is under any obligation to publicly release his or her private financial information and dealings with the Internal Revenue Service. It matters not that the “tradition” of candidates releasing their tax returns dates all the way back to the … Nixon administration. And Nixon’s returns were leaked to the media by a rogue IRS agent.
Indeed, it’s the media that has been driving this “tradition” all along.
Private tax information shouldn’t be subject to unauthorized release without the consent of the taxpayer. In fact, Title 26 of the U.S. Code, Section 6103, explicitly states, “Returns and return information shall be confidential,” and section 7213 sets a felony penalty of a $5,000 fine and five years in jail.
The IRS lists the exceptions to privacy, including sharing information with state tax agencies, law enforcement under certain circumstances, and the Social Security Administration. There is nothing that allows, say, state agencies to leak such information to journalists.
Where did the leak come from? The logical places to start looking are Albany and Manhattan. Under the radical leftist New York state attorney general, Letitia James—no doubt egged on by her malicious boss, Gov. Andrew Cuomo—the Empire State has been gunning for Trump since she took office in 2019. James, by the way, received financial support in her 2018 run for office from Jennifer Soros, the daughter-in-law of convicted financial criminal George Soros.
Meanwhile, Manhattan District Attorney Cyrus Vance Jr. also has been pursuing the president, winning a Supreme Court ruling in July that said the president wasn’t immune from criminal subpoenas, and thus gaining potential access to some eight years of personal and corporate tax material. The president, however, has appealed the validity of the subpoenas themselves to the 2nd Circuit Court of Appeals, and the case is likely to return to the Supreme Court, no matter which way the three-judge panel rules.
The NY Times notes: “All of the information The Times obtained was provided by sources with legal access to it.” And now—voila.
Q. What’s the difference between a fence and a journalist?
The whole thing stinks to high collusion heaven, but we’ve come to expect that from the Democrat-Media Complex. No sooner had the story broken than the Biden campaign pounced with a campaign ad: “Teachers paid $7,239. Firefighters paid $5,283. Nurses paid $10,216. Donald Trump paid $750.”
The problem with talking about taxes is that few Americans bother to distinguish between income taxes—which only about half the country pays in the first place—and other taxes, including Social Security and Medicare (FICA), and state and local taxes. What’s more, self-employed people actually pay double FICA taxes, since the fiction that employer and employee share the burden equally can’t be observed.
Filers who itemize—who generally make up about 30 percent of taxpayers, mostly higher-income—are allowed to write off such business expenses as capital depreciation and mortgage interest against their gross incomes to reduce their taxable income, although this number has dropped since the 2017 tax reforms.
The bedrock principle of the U.S. tax system, however, remains the same: You aren’t obligated to pay a penny more than you actually owe, after taking advantage of every possible provision and exception in the 70,000-plus pages of tax code, past statutes, rulings, and annotations. If rich guys want to write Uncle Sam a big extra check out of the goodness of their patriotic little hearts, there’s nothing to stop them—although few do.
In short, the NY Times’ bombshell is much ado about nothing, as far as Trump personally is concerned. It’s all designed to harm his candidacy by preying on resentment and ignorance. One thing it does do, however, is to make the best possible argument for the repeal of the 16th Amendment, which established the income tax in 1913—one of the “Progressive Era” amendments that also included direct election of senators, Prohibition, and female suffrage.
For the first century or so of its existence, the United States of America was primarily financed by tariffs, and consumption and excise taxes. Indeed, in 1895, the Supreme Court struck down an income tax on the grounds that it was not—as Article 1, Section 8 required of so-called direct taxes—apportioned among the states according to population.
But consumption taxes, it was felt, hit the poor harder than the rich, and so an income tax that hit the rich harder was deemed by progressives of both parties to be “fairer.” Accordingly, the 16th amendment legalized an unapportioned direct income tax. The result has been a century and more of untrammeled federal growth, the diminution of constitutional liberties as understood by the founders, and an out-of-control national debt approaching $27 trillion.
Not to mention the creation huge sub-industries of tax preparers, accountants, lobbyists, and easily influenced congressmen on the tax-writing House Ways and Means Committee. Or the zillions of man-hours and dollars lost to personal record keeping and tax prep.
But go ahead, worry about whether Trump is paying his “fair share.” And then be prepared for a surprise in November.
Michael Walsh is the editor of The-Pipeline.org and the author of “The Devil’s Pleasure Palace” and “The Fiery Angel,” both published by Encounter Books. His latest book, “Last Stands,” a cultural study of military history from the Greeks to the Korean War, will be published in December by St. Martin’s Press.
Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.