Trump, Taxes, and NYT’s Hypocrisy
The New York Times ran an article this past weekend implying that Donald Trump has paid no taxes for the past two decades, because of a large loss in 1995. The problem is that in 2014, the Times also paid no taxes, despite a profit.
… for tax year 2014, The New York Times paid no taxes and got an income tax refund of $3.5 million even though they had a pre-tax profit of $29.9 million in 2014. In other words, their post-tax profit was higher than their pre-tax profit. The explanation in their is, ‘The effective tax rate for 2014 was favorably affected by approximately $21.1 million for the reversal of reserves for uncertain tax positions due to the lapse of applicable statutes of limitations.’ If you don’t think it took fancy accountants and tax lawyers to make that happen, read the statement again.
So it’s bad for Trump, a run-of-the-mill billionaire, to use sophisticated tax planning, but what about the Times herself, which broke this story? They’re owned by Carlos Slim, a far wealthier man, and this trick they pulled is more complicated than anything I’ve seen and I was a professional tax consultant for corporations and very high net worth individuals.
The problem is not that Donald Trump and other wealthy individuals with armies of accountants and tax lawyers can use large losses to offset gains in future years. The problem is that the rest of us can’t. Of course losses should be allowed to offset gains. It’s an INCOME TAX, not a Gross Revenues Tax. Losses are part of calculating income. The injustice is that without very complex and expensive tax planning, the rest of us are limited to bringing forward only 3,000 dollars in losses and that’s for a limited time.
Justice is not forbidding the wealthy full deductibility of actual losses; justice is allowing all of us to do it. Sunset the tax code. Flatten the rates. Treat us all like billionaires!
Jerry Bowyer is a Forbes contributor, contributing editor of AffluentInvestor.com, and Senior Fellow in Business Economics at The Center for Cultural Leadership.
Jerry has compiled an impressive record as a leading thinker in finance and economics. He worked as an auditor and a tax consultant with Arthur Anderson, as Vice President of the Beechwood Company which is the family office associated with Federated Investors, and has consulted in various privatization efforts for Allegheny County, Pennsylvania. He founded the influential economic think tank, the Allegheny Institute, and has lectured extensively at universities, businesses and civic groups.
Jerry has been a member of three investment committees, among which is Benchmark Financial, Pittsburgh’s largest financial services firm. Jerry had been a regular commentator on Fox Business News and Fox News. He was formerly a CNBC Contributor, has guest-hosted “The Kudlow Report”, and has written for CNBC.com, National Review Online, and The Wall Street Journal, as well as many other publications. He is the author of The Bush Boom and more recently The Free Market Capitalist’s Survival Guide, published by HarperCollins. Jerry is the President of Bowyer Research.
Jerry consulted extensively with the Bush White House on matters pertaining to the recent economic crisis. He has been quoted in the New York Times, The Wall Street Journal, Forbes Magazine, The International Herald Tribune and various local newspapers. He has been a contributing editor of National Review Online, The New York Sun and Townhall Magazine. Jerry has hosted daily radio and TV programs and was one of the founding members of WQED’s On-Q Friday Roundtable. He has guest-hosted the Bill Bennett radio program as well as radio programs in Chicago, Dallas and Los Angeles.
Jerry is the former host of WorldView, a nationally syndicated Sunday-morning political talk show created on the model of Meet The Press. On WorldView, Jerry interviewed distinguished guests including the Vice President, Treasury Secretary, HUD Secretary, former Secretary of Sate Condoleezza Rice, former Presidential Advisor Carl Rove, former Attorney General Edwin Meese and publisher Steve Forbes.
Jerry has taught social ethics at Ottawa Theological Hall, public policy at Saint Vincent’s College, and guest lectured at Carnegie Mellon’s graduate Heinz School of Public Policy. In 1997 Jerry gave the commencement address at his alma mater, Robert Morris University. He was the youngest speaker in the history of the school, and the school received more requests for transcripts of Jerry’s speech than at any other time in its 120-year history.
Jerry lives in Pennsylvania with his wife, Susan, and the youngest three of their seven children.