MONDAY, SEPTEMBER 28, 2020
They take shape in its opening paragraphs: We have two questions about the New York Times' bombshell report.
The questions take shape in its opening paragraphs. Our first questions goes like this:
Question 1: If Trump was losing tons of money, why would he pay income tax?
This question takes shape in the first four paragraphs. The Times report starts like this:
BUETTNER (9/28/20): Donald J. Trump paid $750 in federal income taxes the year he won the presidency. In his first year in the White House, he paid another $750.
He had paid no income taxes at all in 10 of the previous 15 years—largely because he reported losing much more money than he made.
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.
That's what the Times report says. It says that Trump was "losing much more money than he made," apparently on a regular basis. It seems to say that he was "rack[ing] up chronic losses" year after year after year.
Our question, and yes, it's bone simple: If a businessperson loses more money than he takes in, what would be pay income taxes on?
If he loses more money than he takes in, in what sense does he have any income at all? Why would he pay income taxes?
That's our first bone-simple question. Our second one goes like this:
Question 2: Did the New York Times really acquire Donald Trump's tax returns?
Did the Times acquire Trump's tax returns? The report doesn't quite seem to say that. This is paragraph 5, continuing from above:
BUETTNER ET AL (continuing directly): The New York Times has obtained tax-return data extending over more than two decades for Mr. Trump and the hundreds of companies that make up his business organization, including detailed information from his first two years in office. It does not include his personal returns for 2018 or 2019. This article offers an overview of The Times’s findings; additional articles will be published in the coming weeks.
In that passage, the reporters clearly say that they didn't obtain the commander-in-chief's "personal returns for 2018 or 2019."
Our question: Did they obtain his "personal returns" for any other year? It doesn't seem clear that they make this claim in that passage, or anywhere else in their lengthy report, although they always may have.
In that passage, the reporters only say that they have obtained the commander's "tax-return data." In the next paragraph, it almost sounds like they're saying that they obtained the gent's "returns." But we'd have to say that they don't flatly make that statement.
If "the tax data examined by the Times" (paragraph 10) are accurate, this would presumably qualify as a distinction without a difference. But did they actually obtain the commander's "personal returns?"
This seems like a basic question. Has the question been answered?
For extra credit: If a businessman loses a boatload of money, does he owe income tax?
We'll guess the answer is buried within our convoluted tax system. We'll guess that, for all practical purposes, the complexity of the system may make questions like that impossible to answer.
We'll guess that, for all practical purposes, our tax system is too complex to explain. This would make it another one of our many failing systems.
We have a boatload of failing systems. Is our first bone-simple question today perhaps too hard to explain?