Capping off an extraordinary week of blunders and bumbles, Donald Trump learned Saturday night that The New York Times had obtained pages of his 1995 tax return showing that not only did he report a $916 million loss, but according to tax experts, that loss could have enabled him to avoid paying federal taxes for as many as 18 years, even as he made healthy profits after his failures in Atlantic City. For a man who just days earlier had responded "That makes me smart"-to the horror of his campaign advisers, no doubt-when Hillary Clinton accused him of refusing to show his tax returns because he may have paid no federal taxes at all, this was not exactly welcome news.
But Trump and his allies were ready to spin. Early Sunday morning, he tweeted, "I know our complex tax laws better than anyone who has ever run for president and am the only one who can fix them." If this argument sounds familiar, it's because he has said the same thing many times about legal forms of influence-buying and political corruption: as someone deeply engaged in that sordid activity, "I alone can fix it," in the words he used in his convention speech.
But in both cases, the truth is that Trump has neither any ideas about how to actually fix it, nor any evident intention to do so. If you're unacquainted with Trump's plan to change the system to eliminate political corruption, it's because he doesn't have one. Similarly, he doesn't have a plan to make the tax system more fair to ordinary people who don't have the benefit of accountants and lawyers who can bend the system to his will. Indeed, the guiding principle of his tax plan, such as it is, is that wealthy people like him should pay even less than they do now.
But let's take a moment to consider Trump's claim that only someone with his detailed and nuanced knowledge of the tax code could possibly address its problems. For its story, the Times tracked down Trump's accountant at the time, one Jack Mitnick, who verified that the documents were legitimate. He also said that Trump showed little interest in how tax law worked; when he and his first wife Ivana came to sign documents, Ivana would ask more questions than her husband. "But if Mr. Trump lacked a sophisticated understanding of the tax code, and if he rarely showed any interest in the details behind various tax strategies, Mr. Mitnick said he clearly grasped the critical role taxes would play in helping him build wealth. 'He knew we could use the tax code to protect him,' Mr. Mitnick said."
And how. As the Prospect's Justin Miller recently reported, the real estate industry has been extraordinarily successful in stocking the tax code with enough loopholes and deductions to enable developers like Trump to amass huge fortunes without the inconvenience of paying too much in taxes. And as tax law expert Edward McCaffrey pointed out, we shouldn't assume that the $916 million loss was Trump's own money; he could have lost other people's money, as he is fond of saying he's adept at doing, then used the losses to lower his own tax bill.
Trump's allies were plainly instructed to characterize the story of the lost near-billion and subsequent tax avoidance as evidence only of Trump's awe-inspiring intellect. "The reality is he's a genius," said Rudy Giuliani on Meet the Press, making clear that what Einstein was to theoretical physics, Trump is to tax law. Giuliani also appeared on This Week to repeat the hosanna to Trump's glory; asked by George Stephanopoulos to respond to the story, he said, "My response is he's a genius." Completing a glorious bootlicking trifecta, Rudy went on CNN's State of the Union to say, "The man is a genius. ... It shows what a genius he is." Over on Fox News Sunday, there was by sheer coincidence a similar chorus being sung. "There's no one who's shown more genius in their way to maneuver about the tax code as he rightfully used the laws to do that," said Chris Christie. "And the genius that Donald Trump has been" means that "there's no one who's better suited to change these laws than someone like him."
You might want to sit down before you hear the shocking news that Donald Trump's tax plan does not actually reorient the American tax code to make it less generous to the wealthy and more so to those unable to experience the daily wonder of crapping in a gold-plated toilet. According to Citizens for Tax Justice, the latest iteration of Trump's tax plan would give an average benefit of $200 to people in the bottom 20 percent of the income scale, and $818 to those in the middle 20 percent. Which is nice, but it doesn't quite compare to the average benefit of $88,410 that those in the top 1 percent would get. Among other things Trump would eliminate the inheritance tax entirely (a big relief for Donny Jr., Ivanka, and Eric, though if I were Tiffany I wouldn't be counting any chickens), and has suggested that he wants to allow individuals who get their income from "pass-through" entities (like his company) to pay tax at a new 15 percent corporate rate, an absolutely spectacular cut for wealthy people who now pay at the top marginal rate of 39.6 percent.
In fairness, we don't know for sure if he really wants this pass-through provision, because he says contradictory things about it depending on whom he's talking to. But the truth is that the details of Trump's tax plan are essentially irrelevant. If he's elected, he will almost certainly bring a Republican Congress with him, and it will be their tax plan, not his, that they will pass and he will sign.
And the plan released by Paul Ryan may be even more generous to the wealthy than Trump's. Ryan wants to eliminate the estate tax, cut rates on both wage income and investment income, and slash corporate rates, too. In fact, while the CTJ's analysis says that 44 percent of the benefits of Trump's tax plan go the top 1 percent, fully 60 percent of the benefits of Ryan's plan are scooped up by those patriotic job creators; they get an average benefit of $137,780, compared to $753 for those in middle and $107 for those at the bottom.
Donald Trump is hardly the only billionaire (if he indeed is one) whose accountants can get them out of paying taxes. But in order to believe that he has even the barest intention of changing the tax system to make that harder for people like him to do, you'd have to ignore what his actual tax plan is, and those of his congressional allies. And you'd have to ignore pretty much everything he's said and done during this campaign. But hey, the guy is a genius-maybe he's playing this at a level so complex none of us mere mortals can understand.
