Why Should Voters Care About Trump’s Tax Returns

Why Should Voters Care About Trump’s Tax Returns USA TODAY Opinion

Trump tax returns are not just good for gossip. Here are 2 reasons voters should care. 

• Is the President honest  First, he probably has not been honest with the IRS, and may even face potential criminal liability for his dishonesty. Presidents demand sacrifices from citizens and from public servants. Some of us are asked only to pay taxes; others are asked to face death to defend us all. A president who will not even pay his fair share cannot lead.  While that is a troubling possibility, it is not certain that Trump paid any less than he owed. It is difficult to judge the honesty of a tax return without examining the surrounding facts.  Still, there are red flags that would show up on his returns and several of those red flags are waving in The New York Times report on the president’s returns. One of them is using a family business’ money to pay for personal or other family expenses. Trump has run into trouble for doing just that before; a New York court dissolved the Trump Foundation in part because Donald Trump converted its assets to his own use.  A family business is not like a foundation, in that its assets belong to the family. It’s totally legal to take money from a business you own. But when you do, you have to report that money as taxable income. In the case of a partnership, such as the Trump Organization, that income might not be taxed until a later year, but it still must be reported at the time it is withdrawn.  A common trick that tax-evading business owners use is to have the business buy things for them directly, and then not report the purchase as income for the owner. So when we read that the president claimed deductions for hair styling, private jets and big parties at his home, we are seeing behavior typical of expenditures investigators see in tax-evading family businesses. Sometimes these expenses are legitimate. No, you can’t deduct your hair stylist expenses. But for many questionable business expenses, an IRS auditor would have to give the taxpayer a chance to prove that, say, his mansion really is an investment property, not a playground for his adult children. Consider the consulting expenses the Trump Organization reportedly claimed for payments that lined up with payments reported by an entity controlled by the president’s daughter Ivanka. If these were fair payments for valuable services rendered, they'd raise no tax issues.  But this is also quite similar to the transactions the president’s father, Fred Trump, used several decades ago to avoid taxes, as also reported in The Times. The elder Trump reportedly set up shell companies, owned by his children, and had these place-holder businesses overcharge him for services. In effect, Fred Trump gave gifts to his children, without paying income taxes on the value he took from his business or estate taxes on the money he passed to his heirs.  Was the president inspired by his father to set up businesses, overpay them and then use them to route money tax free to his kids? To know for sure, we’d need to learn more about what Ivanka’s company did, and whether experts think it charged a fair price for those services.  Often this kind of investigation is difficult and expensive, making it challenging for the IRS to discover wrongdoing. Most experts think the IRS is badly understaffed. And small business owners know both these things. By some estimates, the IRS collects less than 50% of the taxes owed by America’s self-employed.
• Is the President a security risk  So whether Donald Trump underpaid or not, a second lesson the president’s returns teach us is how broken our tax system has become. By the admission of the IRS itself, it can no longer afford to audit significant fractions of our wealthiest citizens. When it discovers what it thinks is wrongdoing, it often is outgunned by taxpayers’ lawyers and experts.  If his returns don’t clearly reveal he did anything wrong, why is President Trump so aggrieved about the revelation? He has reneged repeatedly on promises to reveal his tax returns, fought tooth and nail in court to protect them, even secured the appointment of a business associate of his tax lawyers to be chief counsel of the IRS. We can’t be sure what he finds so embarrassing, or so damaging. Maybe it’s the simple fact that he owes about $400 million to persons or powers unknown. If Trump loses the election, he'll lose his job. When public officials engage in very aggressive tax planning, right or wrong, that planning itself can be a security risk. For whatever reason, the president did not want us to know what was in his returns. And that means those who held bits of that information — his creditors, the folks who worked with Ivanka’s maybe-consulting company, even his hairdresser — had potentially valuable information. Do we know what they wanted in exchange for keeping it to themselves?  That’s the kind of compromising situation that usually prevents federal job applicants from obtaining security clearance. As voters, we all have to pass judgment on whether this president should have clearance to govern for another four years.  Chances are if Donald Trump was not the president, with his history of loans and debt he could never get security clearance.  Because of his financial situation and the pending loan payments could Trump be compromised by a foreign power even more so than he is compromised at present.

His base will argue this is not important but his base fails to question either his lies or his motives.  His base refuses to recognize this is a man who is totally incompetent and with the exception of on statement he made early in his campaign has never been truthful.  His only truthful statement was that he promised to run the government the way he ran his businesses and he has kept that promise.  Sadly, just as he ran his businesses into the ground he is doing the same thing with the United States government.