Donald Trump didn’t have a very good weekend. The release of one of his 1995 tax returns by The New York Times put his campaign on the defensive, with surrogates out in force frantically spinning the numbers which show that during a booming economy Trump declared a loss of almost a billion dollars. The word that has been thrown about by those surrogates to describe the alleged billionaire’s tax avoidance is “genius.” And now one CNBC commentator is calling that spin just what it is — BS.
Ron Insana is a longtime market analyst and commentator for CNBC and MSNBC. In a scathing editorial on the CNBC website, Insana takes on the suggestion that Trump is some kind of financial genius who took a huge loss to save money for his investors. Insana writes,
“Donald Trump, and his surrogates, has said that by lowering his personal tax bill, maybe as low as zero dollars paid in federal and state income taxes, that he was serving his constituents.
“That’s hogwash! Horse hockey! Bull—-! Mr. Trump does have a constituency … but it is a constituency of one … himself.
“Reducing his personal tax bill does absolutely nothing for any business he may be running, public or private, and more than likely the losses he generated to reduce his personal tax liability very likely came at THE EXPENSE of shareholders, bondholders, employees and vendors.”
This is Trump’s modus operandi. People who get involved with him may lose money, but he always manages to avoid sharing their losses. Trump’s surrogates have thrown about the term “fiduciary responsibility” when claiming that by taking this loss, he was actually making a smart business move. But Insana correctly observes they are missing the fact that this $1 billion loss was claimed on Trump’s personal tax return. How does claiming a huge loss on a personal return help his business? As Insana notes, it doesn’t.
Insana says that you don’t have to be a genius to reduce your personal taxes. Then he hits Trump with this:
However, it does take a special kind of genius to LOSE a billion dollars and claim one is a business success.
And he raises a point that many commentators have missed about this issue. It has been reported that the debt Trump claimed was forgiven. When you have a debt forgiven, the IRS treats that as income.
“If, as has been reported, Trump’s $916 million dollars in debt was forgiven, why hasn’t the IRS billed him for the imputed income associated with debt forgiveness?
“It is customary to count forgiven debt as ‘imputed income’ which would then be taxed as ordinary income.
“The total tax liability, federal and state income tax, would run north of 40 percent of that number, close to $400 million! Mr. Trump should have a yuuuuge tax bill hanging over his head, not a billion dollar offset to income.”
Insana also notes that Trump stands practically along among the giants of capitalism when it comes to reducing his personal taxes by deducting business losses.
“While it’s true that the deductions taken by Mr. Trump are legal under the code, you rarely hear names like Gates, Jobs, Buffett, Bezos, or other builders of great companies, and great wealth, using business losses to reduce their personal tax bills.
“They also enriched their investors and employees as they, themselves, got fabulously wealthy. Not so, Trump.”
Trump, like other con men, is a “genius” insofar as he is an expert at making sure Donald Trump always comes out ahead, no matter what happens to those who hitch their fortunes to his wagon. Now he wants to bring his talents and abilities to the presidency. From what we’re seeing, that should be a huge cause for concern, as we don’t have the option of whether or not to participate in the venture. All we can do is vote, and hope for the best.
You can read Ron Insana’s commentary here.
Featured image via Spencer Platt/Getty Images