Trump Potentially Avoided “Paying Any Federal Income Taxes For Up To 18 Years”

NY Times: After Nearly $1 Billion Loss In 1995, Trump Used “Tax Rules Especially Advantageous To Wealthy Filers” To Potentially Avoid Paying Hundreds Of Millions In Taxes. After declaring “a $916 million loss on his 1995 income tax returns,” Republican presidential nominee Donald Trump may have “legally avoid[ed] paying any federal income taxes for up to 18 years,” according to tax documents obtained by The New York Times. Utilizing “tax rules especially advantageous to wealthy filers,” writes the Times, Trump could have used the massive “financial wreckage he left behind in the early 1990s” to “cancel out an equivalent amount of taxable income over an 18-year period.” From the October 1 New York Times report:

Donald J. Trump declared a $916 million loss on his 1995 income tax returns, a tax deduction so substantial it could have allowed him to legally avoid paying any federal income taxes for up to 18 years, records obtained by The New York Times show.

The 1995 tax records, never before disclosed, reveal the extraordinary tax benefits that Mr. Trump, the Republican presidential nominee, derived from the financial wreckage he left behind in the early 1990s through mismanagement of three Atlantic City casinos, his ill-fated foray into the airline business and his ill-timed purchase of the Plaza Hotel in Manhattan.

Tax experts hired by The Times to analyze Mr. Trump’s 1995 records said that tax rules especially advantageous to wealthy filers would have allowed Mr. Trump to use his $916 million loss to cancel out an equivalent amount of taxable income over an 18-year period.

Although Mr. Trump’s taxable income in subsequent years is as yet unknown, a $916 million loss in 1995 would have been large enough to wipe out more than $50 million a year in taxable income over 18 years.

The $916 million loss certainly could have eliminated any federal income taxes Mr. Trump otherwise would have owed on the $50,000 to $100,000 he was paid for each episode of “The Apprentice,” or the roughly $45 million he was paid between 1995 and 2009 when he was chairman or chief executive of the publicly traded company he created to assume ownership of his troubled Atlantic City casinos. Ordinary investors in the new company, meanwhile, saw the value of their shares plunge to 17 cents from $35.50, while scores of contractors went unpaid for work on Mr. Trump’s casinos and casino bondholders received pennies on the dollar. [The New York Times, 10/1/16]

Fox Figures Helped Trump Deflect Criticism Over Reports That He Avoided Paying Taxes By ...

1. Pivoting To Focus On Trump’s Claim That He Knows The Tax Laws And Can Fix Them

Chris Stirewalt: Trump’s Message Of Being Able To Fix Tax Laws “Isn’t Groundless.” After Fox & Friends Sunday co-host Abby Huntsman read Trump’s tweet in response to the Times report on his taxes, in which he asserted he “know[s] our corporate tax laws better than anyone,” Fox’s Chris Stirewalt said that “his argument isn’t groundless.” From the October 2 edition of Fox News’ Fox & Friends Sunday:

ABBY HUNSTMAN (CO-HOST): So Donald Trump is out now tweeting about it. This was his response this morning, just moments ago. He said, “I know our complex tax laws better than anyone who has ever run for president and I'm the only one who can fix them.” To your point, Tucker, “#failing @NYTimes.” Which we know he loves that paper.

CHRIS STIREWALT: We’re going to turn it around. Look, his argument isn't groundless, but the point is it's October. [Fox News, Fox & Friends Sunday, 10/2/16]

Ed Henry: Trump’s Spin That He Can Fix Tax Laws Is “On Message.” Fox co-host Ed Henry praised Trump’s Twitter response to the Times report, in which he said he “know[s] our corporate tax laws better than anyone,” applauding Trump for staying “on message” about fixing the tax laws and for not going “off onto a side issue.” From the October 2 edition of Fox News’ Fox & Friends Sunday:

MARIA BARTIROMO: What I think this is is once again, the Clinton camp, and they are getting help from The New York Times, trying to take him off message. Because the fact is he has a good message when it comes to the economy. No doubt about it. Lowering corporate taxes and rolling back regulations will move the needle on economic growth. Her economic plan is not as cohesive. So she has to take him off message, whether it is the birther issue, his tax returns, his business, Miss Universe, whatever she can do to get him talking about anything other than his economic message is a win for her.

ED HENRY (CO-HOST): To your point though, this morning Donald Trump appears to be on message because he sent out a tweet reacting to this. Didn't go off onto a side issue. Instead, said “I know our complex tax laws better than anyone who has ever run for president. And I'm the only one who can fix them, #failing @NYTimes.” [Fox News, Fox & Friends Sunday, 10/2/16]

2. Claiming That Trump Did What Most Americans Do

Stuart Varney: “Millions Of Americans Have” Avoided Paying Taxes Like Trump Did. Fox business host Stuart Varney argued that Trump “did not do anything wrong at all.” “Millions of Americans have done” what Trump did, he said, but Trump “did it on a very large scale.” From the October 3 edition of Fox News’ Fox & Friends:

STUART VARNEY: He did not do anything wrong at all. Nothing illegal. Nothing unethical. I've done it myself, actually, as have a lot of other taxpayers. You lose capital, in my case it was on a real estate deal, you can carry forward that loss [and] offset it against future income. I've done it myself. Millions of Americans have done it. He did it on a very large scale. [Fox News, Fox & Friends, 10/3/16]

Steve Doocy: “Is There A Single Viewer Watching Right Now Who Has Paid More Tax Than They’re Supposed To?” Fox host Steve Doocy asked, “Is there a single viewer watching right now who has paid more tax than they're supposed to?” adding that doing so would be “just crazy.” Varney agreed, saying, “That would indeed be crazy.” From the October 3 edition of Fox News’ Fox & Friends:

STEVE DOOCY: Here's the question. Is there a single viewer watching right now who has paid more tax than they're supposed to? Because that's just crazy, isn't it?

STUART VARNEY: That would be crazy. That would indeed be crazy. [Fox News, Fox & Friends, 10/3/16]

Tucker Carlson: “How Many Of Us Pay The Federal Government In Federal Taxes More Than We’re Asked To Pay?” Fox contributor Tucker Carlson asked, “How many of us pay the federal government in federal taxes every year more than we’re asked to pay?” saying “Right around zero.” Carlson added, “I don’t know” what “the outage is about.” From the October 3 edition of Fox News’ Fox & Friends:

STEVE DOOCY (CO-HOST): Tucker, is there any there there? I mean, he didn't break any laws. What's the story?

TUCKER CARLSON: Well, I always tell my reporters, sum up the story in the lede. What is this story about? And now that the hysteria has cooled a little bit, what is this story about? That Trump didn't pay more than he owed? I mean, is that the crime here? And is that the new standard? How many of us pay the federal government in federal taxes every year more than we're asked to pay? Right around zero, I would say. I mean, what is the outrage about, exactly? I don’t know the answer. [Fox News, Fox & Friends, 10/3/16]

Dagen McDowell: “Half Of The Country” Uses “The Tax Code To Their Advantage.” Fox contributor Dagen McDowell asserted, “Half of the country pays no net federal income tax, so somebody knows how to use the tax code to your advantage. Not just Donald Trump.” From the October 3 edition of Fox Business’ Mornings with Maria Bartiromo:

DAGEN MCDOWELL: The reason that I don't think that this resonates, in part, you see it in the polls, but also anybody who has self-employment income knows that is you can take losses and carry them forward in other years. Half of the country pays no net federal income tax, so somebody knows how to use the tax code to their advantage. Not just Donald Trump. [Fox Business, Mornings with Maria Bartiromo, 10/3/16]

But Most Americans Do Pay Taxes On Their Income

Brookings: The Statistic That Half The Country Doesn’t Pay Federal Income Tax Is “Misleading” Because “It Incorporates Individuals Who Naturally Shouldn’t Be Paying Taxes.” A blog post for The Brookings Institution points out while “only about 54 percent of American households paid federal income taxes” in 2011, “that statistic is misleading because it provides an incomplete picture of the overall tax burden on American families, and because it incorporates individuals who naturally shouldn’t be paying taxes because of their age or economic circumstances due to the Recession.” The post explains that “tax credits for low-income working families with children” caused the decrease in “the number of American households paying federal income taxes,” adding that “while some families do not pay federal income taxes, these households do pay other forms of taxes.” From the Brookings blog post:

[O]nly about 54 percent of American households paid federal income taxes during recession-affected 2011. But that statistic is misleading because it provides an incomplete picture of the overall tax burden on American families, and because it incorporates individuals who naturally shouldn’t be paying taxes because of their age or economic circumstances due to the Recession. A closer look reveals that nearly all Americans do, in fact, pay taxes.

To help illustrate this point, let’s start with some basic fiscal background. Over the last two decades, tax credits for low-income working families with children, like the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC), have indeed decreased the number of American households paying federal income taxes. These credits reduce or eliminate income tax liabilities and sometimes result in a net income tax refund for low-income families.

[...]

While this helps explain the declining number of low income families paying federal income tax, it does not address one key point: federal income taxes are only one component of the broader federal, state, and local tax system, and only one way in which Americans are able to contribute their fair share through taxes. Indeed, while some families do not pay federal income taxes, these households do pay other forms of taxes. Those who focus exclusively on the federal income tax ignore one of the most significant federal tax burdens on workers—the payroll tax. In fact, most Americans pay more in payroll taxes than in income taxes. [The Brookings Institute, 4/6/12]

3. Claiming The Released Returns Show Trump Is A Good Businessman

Stuart Varney: Trump’s Tax Returns Show That “He’s An Entrepreneur Who Has Bounced Back Very, Very Well.” Stuart Varney asserted that the Times-released returns display that Trump is “an entrepreneur who has bounced back very, very well.” From the October 3 edition of Fox News’ Fox & Friends:

BRIAN KILMEADE (CO-HOST): What about critics who say, “Wow this shows that he's a bad businessman. He lost $25 million on the --”

STEVE DOOCY (CO-HOST): Airline.

KILMEADE: “Airline and he lost $43 million on a castle casino.” What about the fact that he lost like that?

STUART VARNEY: Doesn’t it also show that he’s rebounded very nicely, thank you very much indeed, and rebuilt the business which was in bad shape in the early 1990s? He got into airlines, he got into casinos, didn't work. He bounces back and now he's got his name on buildings all around the world. Runs hotels --

AINSLEY EARHARDT (CO-HOST): That’s probably what billionaires do, right? They take risks and then they end up losing a lot and trying to make it back.

VARNEY: He’s an entrepreneur who has bounced back very, very well, indeed. [Fox News, Fox & Friends, 10/3/16]

4. Claiming That Clinton Did The Same Thing

Heather Childers: Clinton “Used The Same Thing On A $700,000 Loss She Reported.” Fox anchor Heather Childers claimed that Clinton “used the same thing” as Trump “on a $700,000 loss she reported in her own tax returns.” From the October 3 edition of Fox News’ Fox & Friends First:

HEATHER CHILDERS (CO-HOST): Hillary Clinton, herself, also used the same thing on a $700,000 loss that she reported in her own tax returns that she released. [Fox News, Fox & Friends First, 10/3/16]

Ainsley Earhardt: It’s “Ironic” That Clinton Is “Calling It A Scheme” Because She “Has Done It.” Fox host Ainsley Earhardt claimed that it was “ironic” that Democratic presidential nominee Hillary Clinton is “calling it a scheme” because she “has done it” herself. From the October 3 edition of Fox News’ Fox & Friends:

AINSLEY EARHARDT (CO-HOST): Here’s the ironic thing, though. Hillary Clinton has done it. She's calling it a scheme. Yet in 2015 she took a $700,000 loss. [Fox News, Fox & Friends, 10/3/16]

But The Deduction From The Clintons’ 2015 Tax Return Is Different

Clintons Received A $3,000 Deduction And Paid Millions In Federal Income Taxes. Joint tax returns from the Clintons in 2015 shows that they claimed a $700,000 capital loss carried over from a prior year, which originates with the financial crash of 2008. Unlike Trump, they received only a $3,000 deduction for those losses and paid $3.2 million in federal income taxes in 2015. [Media Matters, 10/3/16]

5. Deflecting To Speculating About The Clinton Foundation

Leland Vittert: Doesn’t The “Tax Return Issue … Bring Back Up All The Clinton Foundation Issues?” Fox correspondent Leland Vittert deflected from criticism of Trump amid the release of his tax returns, asking, “As gleeful as the Clinton campaign is right now …, does this then bring back up all the Clinton Foundation issues, all the Clintons' tax returns, all the money that Bill Clinton made giving speeches while Hillary Clinton was secretary of state?” From the October 2 edition of Fox News’ America’s Election Headquarters:

LELAND VITTERT (CO-HOST): As gleeful as the Clinton campaign is right now about this tax return issue coming out, does this then bring back up all the Clinton Foundation issues, all the Clintons' tax returns, all the money that Bill Clinton made giving speeches while Hillary Clinton was secretary of state? Those kinds of things?

DANIEL HALPER: I think it raises a larger question, right. So each side has said we never broke the law. The Trump campaign said we never broke the law. Hillary Clinton, of course, has maintained she has never broken the law. But it raises the question, within the law there are actions that people can do that still make you look, you know, that don't look so good. And so there are questions about Hillary Clinton and her foundation and the speaking fees and the people who have given paid personal checks to her and her family and what they might be seeking in return. Likewise, it might not be illegal, but we can ask questions and we can say this is not good. Same, I think, with Donald Trump. When money is exchanged, a lot of people wonder what the motives are. [Fox News, America’s Election Headquarters, 10/2/16]

Ed Henry: “Is There A Double Standard” In Coverage Of Trump’s Tax Returns And The Clinton Foundation? Fox chief national correspondent Ed Henry asked if there is “a double standard in the media” in terms of the coverage of Trump’s tax returns and “the Clinton Foundation and its controversial deals.” From the October 2 edition of Fox News’ Fox & Friends Sunday:

TUCKER CARLSON (CO-HOST): New York Times adamantly opposed to the Trump campaign. They’ve got a front page story this morning saying Trump has not paid taxes in about 20 years.

ED HENRY (CO-HOST): But what about the Clinton Foundation and its controversial deals? Is there a double standard in the media? [Fox News, Fox & Friends Sunday, 10/2/16]

Ainsley Earhardt: “Look At The Clinton Foundation. … Is That Illegal?” Fox host Ainsley Earhardt deflected questions about Trump’s tax returns, saying, “Maybe Hillary Clinton is going after his taxes because she wants the focus off of the email scandal.” Earhardt pointed to the Clinton Foundation, speculating about “[p]ay-for-play” and saying, “The question is is that illegal?” From the October 3 edition of Fox News’ Fox & Friends:

AINSLEY EARHARDT (CO-HOST): Maybe Hillary Clinton is going after his taxes because she wants the focus off of the email scandal. And then if you look at her tax returns, Bret, in 2015, she took a $700,000 loss. So she's doing the same thing that Donald Trump did. And look at the Clinton Foundation. What's happening there? The question is is that illegal? Pay-for-play. [Fox News, Fox & Friends, 10/3/16]