“Lo and behold, we have Donald Trump’s tax returns here in the state of New York and we can provide them to Congress if the Treasury Department won’t.”
8 thoughts on “The NY Senate says “have a heapin’ helpin’ of Trump’s tax returns””
Comments are closed.
I love that a story breaks about Trump businesses losing $1b over a decade in the same week that Uber, a company that loses 1b per quarter issues its IPO making its founder a multi billionaire. Also billionaire Elon musk is a “genius” while Tesla loses billions of dollars a year. WeWork, Twitter, Lyft…. on and on. I don’t love conservatives, but there is nothing more terrifying than putting economic simpletons like AOC, Sanders, Warren, Harris, and Booker in positions of power. Btw, carry forward net operating loss and depreciation are standard accounting techniques. NYT and liberal media should be ashamed of themselves.
The rules for financial accounting and tax accounting are very, very different. One is a matter of generally accepted accounting principles; the other is a matter of laws made by Congress, so you can bet it’s a mess.
Basically, Congress has given people and corporation many tax breaks that reduce their taxable income in the short run compared to what it would be under normal financial accounting. These tax breaks include things like ACCELERATED depreciation, and the carry-forward of prior year losses, as Don mentions.
So, income tax returns do not reflect the actual financial performance of business and individuals as well as properly prepared and audited financial statements do. This is because they serve different purposes.
Still, it would seem to me that the tremendous losses reported by Trump on his tax returns cannot possibly reflect good underlying health.
I would also remark that the advantage conveyed by things as accelerated depreciation eventually come to an end, and then tax returns begins showing HIGHER income than statement prepared under financial accounting principles would. This is called “a burned out tax-shelter.”
I very much doubt if properly prepared, audited financial statements exist for Trump and his businesses. He never has the slightest interest in the truth. He believes what he wants to believe, and otherwise is only interested in deceiving people to his advantage.
Finally, it should be needless to state that Trump is the one who should be ashamed of himself, for failing divulge accurate financial information about himself, such as presidents have done for 40 years now, and for failing to relinquish his business interests after becoming president.
I don’t disagree with what you wrote here. Trump also is a real estate developer and as such is structured as an LLC tree rather than as a corporation. He has a ton of complicated flow through gains and losses. However many real estate developers have built and maintained empires under this siloed and insulated structure. Fact remains that companies like Tesla, Uber, Wework etc don’t pay federal income taxes either and lose massive amounts of money while their shareholders, employees, and management become filthy rich. There is nothing wrong with this. If free markets believe a banana peel is worth a billion dollars, then its worth a billion dollars. These companies employ many thousands of people, pay employer payroll taxes, Medicare, social security and unemployment. And spend those billions into the economy creating growth and wealth for many more people. My point is not about whether or not trump should release his taxes. He should. My point is that many of the now “mainstream” liberals and the overeducated members of the media outlets who have never run businesses, simply are showing an embarrassing lack of understanding of the basic fundamentals of capitalism.
Btw, Tesla and the many others who have become unicorns while burning through stockpiles of cash are simply Silicon Valley backed Ponzi schemes. They should just be consistent in how they portray the “evil” of wealth creating wealth.
Thank you for your civil reply, Don. I would point out that unlike the corporations you mention, these were Trump’s PERSONAL returns. I would like to make two other points connected to your post:
A) My knowledge of accounting, and of tax law, is woefully out of date. I have the impression that the LLC and LLP forms of ownership were not developed until after the Enron disaster of 2001, particularly the LLP form, which I thought was developed in response to the collapse of Enron’s accounting firm Arthur Andersen. So there were no LLC’s in the period covered by Trump’s returns, IIRC. (BTW, it has long been the case that corporations can be looted by those who control them – as opposed to those who own them – for their own benefit. Mark Twain remarked on it during the days of the Nevada silver rush.)
B) I would gently suggest that not understanding the difference between profit and loss under tax law, and in accounting terms does NOT show “an embarrassing lack of understanding of the basic fundamentals of capitalism.”
Tax law as it now exists has, as you understand, very little connection with the “real” profit and loss of a corporation or individual. It is a patchwork of benefits given to various causes, industries, pressure groups, and so on. The taxes of a large real-estate developer like Trump, would be complex beyond the understanding of anyone except an advance professional.
Most people do not even understand the basics of accrual accounting, for which they are not to be faulted any more for lacking an understanding of how to prepare a lawsuit or write a binding contract.
For those reasons, then, I cannot fault people who think that Trump’s tax returns should bear SOME connection with his actual gains and losses. Indeed, I myself believe they show at least the DIRECTION in which his businesses moved – which is to say, downward, ever closer to the financial disaster that ultimately sent his business into bankruptcy.
(I rewrote this post several times. I hope it still make sense.)
Don
I’m not sure you’re on point here. You might or might not be. It depends on the relationship between Trump’s businesses and his own personal wealth. Remember that all of the losses detailed in these tax returns are not those of the Trump businesses, which would all file their own returns. (I think.) These are his own personal tax returns.
Sure, I guess it’s possible that his cash flow was actually very positive and it was all offset by various shelters and deductions to produce negative taxable income, but I don’t really know the details, and I’d prefer to withhold judgment on the meaning of those returns without knowing more precisely how he managed to accumulate those massive negatives.
But it should be noted that those are certainly very unusual numbers for an individual taxpayer.
This one will almost certainly face a court challenge or two. To the best of my knowledge, and I’m no expert, the Federal government and state governments cannot pass a law that affects only ONE person. This law would have to be written so that it affects every person in the state of New York who is or might be in Donald Trump’s position (other than being US President).
The law states that NY Tax returns will be provided upon the request of three different congressional committees. There is no mention of Trump.
William W Stanley, I think you want to look up something called “a bill of attainder”. That is what is unconstitutional. This is not one of those.