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And Another Thing About The Donald’s Tax Returns



Something we’ve not seen mentioned as yet. Something important. The tax system does, always, get you in the end. It’s not in fact possible to swan off into the sunset without ever paying anything. Not alive at least.

That losses are offset against profits is something we’ve pointed out already. Any and every tax system that even allows private enterprise is going to allow that.

But there’s another point here. There wasn’t space to mention it but it derives from this:

As to whether Trump is actually rich or not, tax returns won’t tell anyone that. While loans against assets are discussed, by the very nature of the documents, the value of the assets won’t be. Wealth is assets minus debts, something that just cannot be calculated with what’s in tax returns.

We can, if we wish, point out that The Donald hasn’t been making anything, that the Orange Man is a bad business man. OK, if we like. But the corollary of that is that he’s not made any money that he should, righteously, be paying taxes upon. Belief in the first part precludes shouting about the size of the tax bill.

But perhaps he is actually good in business. His business being to build wealth in the form of property, rather than income? For what we don’t get told is how much those golf courses and hotels are worth. We get to see the losses made. The debts assigned to them. But not the value. So we don’t know what that residual, Trump’s wealth, is.

Let’s assume it’s nothing, that net number. OK, go back two paragraphs and how much tax should someone with no wealth be paying? Or, alternatively, it’s a nice great big fat, bigly, number. So, how much tax should a wealthy man be paying on his wealth?

Nothing, as we don’t charge tax to wealth. We do charge it on the crystallisation of wealth, upon transactions. Capital gains etc. Yes there are rollover provisions for real estate and so on but cashing out and moving on causes tax to be due.

That is, if Trump has made lots of money all that is true is that the tax system hasn’t got him yet. And that tax system, barring death (American tax law can be weird on that what with step up basis and all that) which makes it a bit difficult to actually tax Trump himself, does eventually gain its pound or seven of flesh.

Which means that all of this tax debate collapses down to – either Trump’s got no money in which the complaint is what? Or, he’s got it all stashed in wealth, not income, which gets taxed later. And?



  1. In 2016 when someone defended his capability by pointing to his business success I often heard people claim that he “didn’t really have any money, it’s all a shell game”. To which I would respond – So, he has a supermodel wife, private jets, a luxury penthouse apartment in a building with his name on it and luxury resorts all over the world with is name on them and he managed this without having any money? Freaking genius, that!

  2. I think there’s a huge “hold on a second” to this story that’s being overlooked. It’s illegal for anyone to leak his actual tax returns and the IRS cannot weigh in on whether what the NYT has is legit. Therefore, no one can verify if these “tax returns” are real. How about we print some up and claim they’re Joe Biden’s? Anybody know what Dan Rather has been up to lately?

    The NYT may be able to verify that the documents came from someone who could have gotten his hands on the real thing (at the IRS or within Trump’s organization or an accounting firm), but they cannot verify that these are legit.

  3. They’re not even claiming “tax returns”. The NYT reports are all based on the Donald’s “tax data”, whatever that is. (I’d guess whatever the IRS released to SDNY but who knows.)

  4. A terrific example of all this is American sports teams, especially American football. Sure, the team throws off a few million a year to support the extravagancies of the owners’ trophy re-load wife (and mistress) but the real game is the ever increasing value of the club. How the gains are treated in a sale is a mystery to the layman.

  5. As an aside many will forget that people pay substantial taxes ‘above the EBITDA line’

    Mar-A-Lago property tax bill is $970k per year and Trump’s property in Doral, FL is paying $1.8mn in property tax.

    Sure, real estate investing has certain benefits with respect to depreciation, particularly being able to depreciate properties that are actually appreciating in value. However, the asset is subject to a perpetual wealth tax that isn’t inconsiderable.


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