BIPP: The problem with Trump’s taxes

Trey Gaither, BIPP Intern

Can you name a phenomenon so absurd or ludicrous that many people today cannot seem to comprehend it? Would you imagine a unicorn, or perhaps something as far fetched as total world peace? Here’s another; recently, the American citizenry has come privy to news that highlights one of the greatest ploys ever committed to gain leverage within the American financial tax sector. A stunning news article leaked by The New York Times indicts U.S. President Donald Trump, placing him under scrutiny for the minuscule amounts of federal taxes he had paid over the past several years. The president paid all of $750 in the years 2016 and 2017, and absolutely nothing for 10 of the past 15 years.

Suzanna Garment, tax auditor and author of “Scandal: The Crisis of Mistrust in American Politics,” offers insight into how the president allegedly paid such slim tax bills in the recent past. The president has evidently utilized his various roles within the economy to evade paying high taxes, with much of his avoidance strategy deeply rooted in highly-codified financial leveraging schemes. Beginning with Trump’s challenging of the modern political structure during his 2016 campaign, he forwent the opportunity to share his tax statements, claiming the IRS had been and is still auditing him. Many Americans later found significant holes in his argument; the IRS themselves have since come out with public statements that addressed their role in the audit, along with a statement in support of Trump revealing his tax statements. So why has Trump continuously declined to disclose his federal tax documentation?

Since first declaring his intentions to run for the presidency in 2015, Trump has effectively broken every time-honored norm in American politics. Once assuming office, Trump, unlike any other president before him, elected to not place any of his business relations into a blind trust. Blind trusts have become an effective way for presidents to limit their conflicts of interests, allowing the commodity to continue in growth without the direct imposition of the existing shareholder — in this case, Trump himself. When taking an even deeper look at the structure of Trump’s business, many tax auditors found major cases of debt hemorrhaging. In an attempt to limit the amount of income tax he had to report, the president leveraged high amounts of debt against the income of his businesses. In short, Trump’s businesses were and are financing high amounts of debt, and come 2022, the majority of it will come to maturity. However, according to the president in a press meeting, “It is all fake news, made up of total fakeness”; Trump is utilizing the same tactics to withstand the same pressure he had in 2016, when he was first asked to reveal his tax statements. According to the president, in an economic system that aims to limit the liberties of the wealthy, the tactics he uses to limit his tax payment are more than legal.

Trump’s tax evasion scheme may be legal in his eyes, but his opinion on the issue should be reflected in light of the generally unorthodox nature of the president’s behavior, which extends, naturally, to his business practices. To a large extent, Trump’s financial concerns may be actively used to generate losses with the intention of subduing his tax liability, manipulating existing tax laws in order to pay almost nothing. Hemorrhaging high debt leverage is a popular tool used by many uber elitists and capitalists as a way to limit their taxation — the Lehman Brothers provide an ideal example of this strategy, which was revealed in 2008. Trump’s strategy operates on this basic principle, albeit with some more eccentric measures; his successful attempts to hemorrhage debt for sequential fiscal tax years are certainly cause for suspicion. Moreover, the president’s repeated refusal reveal his tax statements effectively mask the identity of the creditors to whom the president is indebted. 

Does it seem befitting that an individual who actively finances their business under such a ‘loss model’ does so to avoid paying their normally much higher taxes? If so, it only underlines the absolute necessity to rectify our country’s lopsided tax system. If such tax assessments are supposedly based on fairness and equity, it does not seem fair to allow an individual to take advantage of such broad loopholes and minimize their tax burden.

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