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.
During last week's presidential debate, Hillary Clinton not only noted Donald Trump's refusal to disclose his tax returns, she also speculated about his reasoning for such unusual secrecy. "Maybe," she said, "he doesn't want the American people, all of you watching tonight, to know that he's paid nothing in federal taxes."Unprompted, Trump interrupted to say, "That makes me smart."A Washington Post reporter was watching the debate with undecided voters in North Carolina and heard "gasps" in the room after the exchange. "That's offensive," one said. "I pay taxes."With this in mind, a bombshell report from the New York Times over the weekend very likely caused quite a few more gasps.
We don't know who provided the Times with the documents, but neither Trump nor anyone associated with his operation has made any effort to deny their accuracy or authenticity. (Team Trump has complained that the materials were "illegally obtained," though the Republican campaign had no comparable concerns about Democratic emails stolen by Russian hackers. On the contrary, Trump personally encouraged Russia to do more hacking of his American enemies.)The GOP candidate's most sycophantic allies tried to put a positive spin on the revelations on the Sunday shows. New Jersey Gov. Chris Christie (R), for example, told Fox News this is "actually a very, very good story" for the Trump campaign. Former New York City Mayor Rudy Giuliani said on ABC the revelations offer proof of Trump's "genius."The evidence to the contrary is overwhelming.If, for example, Trump failed to pay federal income taxes for nearly two decades, it would help explain his inexplicable secrecy when it comes to his tax returns. At the same time, this would do real political damage to his candidacy: Trump has spent years complaining incessantly about the burden of paying taxes, while also complaining that others aren't paying enough.For that matter, it's been Republican orthodoxy in recent years that Americans who don't pay income taxes are parasitic slackers (see Paul Ryan's "makers vs. takers" framing and Mitt Romney's "47 percent" video). What we didn't know is that the GOP nominee might very well fit into the same category.Making matters worse, Trump's claim to fame is his alleged business acumen. How, then, does a half-way competent entrepreneur -- and casino owner -- lose $916 million in a booming economy? How is that even possible?All of this comes with some caveats. For example, we haven't yet seen Trump's full tax returns. The Times report noted, "The documents were the first page of a New York State resident income tax return, the first page of a New Jersey nonresident tax return and the first page of a Connecticut nonresident tax return." To get a fuller picture, Trump would have to disclose more documents. The fact that he's still refusing to do so suggests the truth must be pretty devastating.What's more, I'm not a tax attorney, but no one seems to be arguing that Trump broke any laws. Rather, the story here is that a wealthy and powerful businessman exploited the system after a series of spectacular failures, even as regular Americans played by the rules and paid their taxes.This story is unlikely to go away anytime soon. For a campaign that was already moving in the wrong direction, a story like this one is especially brutal.