The New York Times dropped a bomb over the weekend with its revelation that it obtained 20 years of the president's tax returns. The documents show that either the president is one of the worst businessmen in American history, or he has committed (and indeed may still be committing) one of the largest tax frauds in American history. Actually, it looks like both:
The tax returns that Mr. Trump has long fought to keep private tell a story fundamentally different from the one he has sold to the American public. His reports to the I.R.S. portray a businessman who takes in hundreds of millions of dollars a year yet racks up chronic losses that he aggressively employs to avoid paying taxes. Now, with his financial challenges mounting, the records show that he depends more and more on making money from businesses that put him in potential and often direct conflict of interest with his job as president.
The picture that perhaps emerges most starkly from the mountain of figures and tax schedules prepared by Mr. Trump’s accountants is of a businessman-president in a tightening financial vise.
Most of Mr. Trump’s core enterprises — from his constellation of golf courses to his conservative-magnet hotel in Washington — report losing millions, if not tens of millions, of dollars year after year.
His revenue from “The Apprentice” and from licensing deals is drying up, and several years ago he sold nearly all the stocks that now might have helped him plug holes in his struggling properties.
The tax audit looms.
And within the next four years, more than $300 million in loans — obligations for which he is personally responsible — will come due.
I've had a security clearance, and let me just say that debt will keep you from getting one. You can be a paid-up member of the Communist Party and have a secret drug stash in your basement and still get a top secret clearance—as long as you have no significant debts and you admit the drug stash in your SF-86. But that's just one of the president's problems, according to the documents:
He appears to have paid off none of the principal of the Trump Tower mortgage, and the full $100 million comes due in 2022. And if he loses his dispute with the I.R.S. over the 2010 refund, he could owe the government more than $100 million (including interest on the original amount).
In the 1990s, Mr. Trump nearly ruined himself by personally guaranteeing hundreds of millions of dollars in loans, and he has since said that he regretted doing so. But he has taken the same step again, his tax records show. He appears to be responsible for loans totaling $421 million, most of which is coming due within four years.
Should he win re-election, his lenders could be placed in the unprecedented position of weighing whether to foreclose on a sitting president. Whether he wins or loses, he will probably need to find new ways to use his brand — and his popularity among tens of millions of Americans — to make money.
You can predict the reactions. The president called it "fake news," which means it's true. The Wall Street Journal appears to have ignored it—there's not a single story on their main or opinion pages about it at this writing. Fox News highlighted the president's and his press secretary's responses, but below the fold, in small headlines.
On our side, NBC's Jonathan Allen believes this is "devastating for his campaign:"
The vast majority of his base voters won't care whether he paid taxes or lied about being a successful businessman. His ability to pull one over on the public or the government — perhaps both — will be accepted by most of his supporters as evidence of his cunning, his acumen and his strategic brilliance.
But that base is simultaneously Trump's greatest strength and weakness on the electoral battlefield.
His inability to expand beyond his base and court the less strident is the main challengeto his re-election hopes. And the tax records make things worse. The documents reinforce narratives about Trump that fire up Democrats and give pause to Republican-leaning voters who might be persuaded either to cast ballots for Democratic nominee Joe Biden or simply stay home.
So while the tax records don't contain many surprises for those who have paid close attention to Trump's business dealings — and the distance between his boasts and the reality of his record as the head of the firms that make up "Trump Inc." — they do put Trump in a position he would like to have avoided.
Catherine Rampell of the Washington Post agrees with me:
For his part, Trump has previously argued that shirking his tax obligations made him “smart.” He suggested that he merely took advantage of legal loopholes, the kind available to deep-pocketed Americans who can afford top-notch tax preparation advice. And as I’ve written before, the real estate industry enjoys tons of loopholes and other opportunities for legally minimizing tax obligations, most notably through depreciation deductions. But per the Times, Trump’s “three European golf courses, the Washington hotel, Doral and Trump Corporation reported losing a total of $150.3 million from 2010 through 2018, without including depreciation as an expense.”
That is: They were money pits.
Additionally, Times reporters Russ Buettner, Susanne Craig and Mike McIntire include details of tax practices that were, at best, extraordinarily aggressive and, at worst, suggest possible fraud on a massive scale.
These include deducting lifestyle expenses, such as the cost of haircuts, as if they were business expenses. Or appearing to pay Ivanka Trump consulting fees on the same hotel deals that she helped manage as part of her job at her father’s business, an arrangement that may have been a way to transfer assets without paying gift taxes.
One might reasonably wonder why Trump, who appears to tweet, watch TV and golf more than he exercises his duties as president, has ever wanted a second term. Well, in addition to his desire to finally build his border wall or continue dodging potential indictments, we now know that Trump has about a half-billion dollars’ worth of motivation to stay in office four more years.
These documents show what we've really known all along: the president has perpetrated the biggest con on the American people in the country's history. But you can't fool all of the people all of the time.
Will this really change the election? Well, a 1% swing in any of the battleground states would have done it four years ago.
In related news, Showtime's The Comey Rule will frustrate the hell out of you. I strongly recommend it.