3 glaring problems with Donald Trump's defense of his tax returns

The most remarkable thing about Donald Trump's official response to the New York Times report that he claimed a $916 million loss in his 1995 tax returns and could have thus avoided paying federal income tax for 18 years might be that he didn't deny the allegation.

Instead, the short statement from the Trump campaign complained that Trump's New York State personal returns were "illegally obtained" (they were sent to a Times reporter in an envelope postmarked from Trump Tower), accused Hillary Clinton of breaking the law, then said "Mr. Trump is a highly-skilled businessman who has a fiduciary responsibility to his business, his family, and his employees to pay no more tax than legally required."

There are some big, glaring problems with this defense. Let's look at three of them.

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1. Whether Trump meant his "fiduciary responsibility" legally or in any other sense, that claim is ludicrous, University of Chicago Law professor Daniel Hemel writes at Medium. "First, any obligation that Donald Trump might have to minimize his companies' taxes would not translate into an obligation to minimize his personal taxes," and the Times obtained his personal tax returns. Trump is also the 100 percent owner of his enterprises, and so "Trump has no fiduciary responsibility to himself," or his employees (even if he should).

2. The idea that Trump is a "highly skilled businessman" who lost almost a billion dollars during an upturn in the real estate market doesn't make sense. "It's either a unique combination of bad luck or he's a terrible businessman or both," former Congressional Budget Office director Douglas Holtz-Eakin, now at a conservative think tank, tells The New York Times. "I don't understand how you can lose a billion dollars and stay in business." Steven Rosenthal, a real estate tax specialist at the Urban-Brookings Tax Policy Center, was more blunt: "It's clear he was a spectacularly disastrous businessman."

3. The Trump campaign statement also asserts that "Mr. Trump knows the tax code far better than anyone who has ever run for president and he is the only one that knows how to fix it." Trump's tax plans, however, would not fix the gaping loopholes he could have used to avoid paying taxes for 18 years. "He hasn’t proposed anything to address these loopholes," Holtz-Eakins said. "Hillary Clinton is proposing tax code changes that would cost her and her family money," says Washington Post business columnist Allan Sloan. "Trump, by contrast, is proposing tax changes that would greatly benefit the commercial real estate business, which is his primary field, and would greatly benefit his own family."

Trump campaign advocates fanned out to the Sunday talk shows to argue that Trump was smart to avoid paying taxes — former New York City Mayor Rudy Giuliani repeatedly called Trump a "genius" — but "if Trump were truly smart — and wanted to lead by example," says Sloan, "he would have disclosed his tax returns, showed the loopholes he used, and vowed to close them."