Editor’s Note: Edward J. McCaffery is Robert C. Packard Trustee Chair in Law and a professor of law, economics and political science at the University of Southern California. He is the author of “Fair Not Flat: How to Make the Tax System Better and Simpler” and founder of the People’s Tax Page. The opinions expressed in this commentary are his own. View more opinion at CNN.
Hallelujah! The House Ways and Means Committee has released former President Donald Trump’s tax returns from 2015 to 2020. If nothing else, this will – let us hope! – release me from being asked about the release of Trump’s tax returns, as I have been for over six years now.
There’s plenty we already knew. In 2020, the New York Times analyzed 20 years of Trump’s tax returns, including some of the ones released Friday. And earlier this month, the House Ways and Means Committee released two reports that found the Internal Revenue Service failed to audit Trump in the first two years of his presidency despite the IRS’ mandatory audit program for US presidents, and summarized in detail the top-line numbers for the full six years.
What we got from this latest data dump is thousands of pages of returns, exhibits, schedules and such. Dedicated accountants and journalists will pore over these documents and we are sure to see plenty of headlines like “Top 10 surprises in Trump’s tax returns” in the coming days and weeks.
But we have long known the basic story. Trump is a bad businessman who seems to lose money on everything from casinos to golf clubs, with steaks and vodka and even a so-called university in between. So the main reason he often pays so little, if any, in taxes, is that he often reports a loss. He also lost other people’s money and got big tax breaks for that.
Trump has benefitted from the huge head start given to him by his father Fred Trump, which continued to pay dividends with large capital gains from the sale of inherited property in 2018 (leading to Trump paying some taxes that year – just under $1 million). And like his father, Trump emerges as an aggressive and rather crude tax avoider, using standard tactics like putting the kids on the payroll, writing off personal expenses, overvaluing in-kind charitable contributions and so on. Friday’s release has already shown, for example, that Trump did not donate his presidential salary to charities in 2020, as he had promised – he made no charitable gifts at all in 2020, when he paid no taxes.
Trump’s taxes often push the lines of propriety, and his company’s sometimes cross them, as we now know from the Manhattan DA’s criminal conviction of Trump Organization.
Nothing new there.
But sometimes nothing is the story, like the dog that does not bark. So here are some nothings we can resolve to do something about in 2023.
Nothing is what Trump paid in federal income taxes in 2020, and in many other years. Given his massive and mysterious income tax refund of nearly $73 million in 2010, Trump may not have paid net positive income taxes in his life. And he is not alone. Many billionaires pay no income tax, and many do so perfectly legally.
Nothing is also what the IRS did in regards to Trump’s tax returns during his first two years in office until the Democrats took power and forced them to do something starting in 2019.
That’s unacceptable. When the IRS fails to audit a prominent rich person, whom they have to examine – whether that’s because it’s too hard, they don’t have the time or for any other reason – why would the rich pay anything in tax at all?
That’s a trick question: the rich already have ways to pay nothing in taxes, see the first nothing above.
And the simple math of the matter is that if the rich pay nothing, then the not-rich pay everything.
Which leads to two final nothings.
Nothing is what Congress has done, over many decades of Democratic and Republican leadership alike, about getting the rich to really pay their fair share of taxes.
Maybe, just maybe, 2023 will be a better year for all. I can write nothing at all about Trump’s tax returns. And we can all celebrate Congress doing something (by providing nearly $80 billion to strengthen the IRS as part of the Inflation Reduction Act – a good start) about making the wealthiest Americans pay… something.
That would be better than nothing, and more helpful than yet another Trump tax return story.