What might be lurking in Trump's tax returns

House Democrats have officially demanded six years of President Trump's tax returns.

While it isn't legally obligatory, it's a long-established norm that presidential nominees release their tax returns for public perusal. Trump is the first to adamantly refuse since the days of President Nixon. And now Democrats have legally-enforceable investigative and subpoena powers, thanks to their new majority in the House. This means we may soon get a glimpse of Trump's tax returns.

So what might we find?

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It goes without saying that he acts like a man with something to hide. But what, in the fevered brain of Donald J. Trump, qualifies as something worth hiding?

As Ryan Lizza wrote in The New Yorker, "Trump's full tax returns ... would reveal how much he donates to charity, what tax rate he pays, whether he pays federal taxes at all, and whether he receives income from foreign sources that could create conflicts of interest. They would shed light on whether his net worth is as high as he claims."

Trump is vain and egotistical. He likes to try to wow people with his fortune. And we know he's gone to extraordinary lengths to inflate — and straight-up lie about — the scale of his wealth. A former Forbes reporter said that, in the 1980s, Trump impersonated an aid on a phone call to claim riches he didn't have in order to get himself on the Forbes 400 list — the magazine's annual ranking of the wealthiest Americans. Perhaps Trump doesn't want to release his tax returns simply because his fortune is actually unimpressive when compared to those of other tycoons.

We also know, thanks to a major 2018 report in The New York Times, that Trump inherited around $413 million from his father, despite insisting his parents did not help him build his fortune. A thorough review of his tax returns could punch some holes in the "Donald Trump: Self-Made Billionaire" mythos.

Then there's the matter of tax evasion. That same Times report also revealed a massive and long-running effort by the whole Trump family to evade taxes through corporate shell companies and the like. Another story that dug up his 1995 tax returns showed Trump deducted a near-billion dollar loss, potentially allowing him to pay nothing in taxes for almost the next 20 years.

This sort of white-collar tax evasion by the wealthy is more a matter of manipulating the tax code than of outright lawbreaking. And Trump certainly hasn't been coy about his willingness to work tax law to his advantage. "That makes me smart," he declared on the campaign trail. But perhaps Trump knows voters might not be so nonchalant if the full extent of his tax evasion is made public.

The last possibility is that Trump's tax records would provide investigators with substantial evidence of outright fraud.

Late last year, ProPublica co-published an investigation with WNYC into the Trump Organization's international deals. They found many of the projects bore evidence of deception. Writing in The New Yorker, Adam Davidson summed up how the business realm of real estate can be fertile ground for various schemes: You can inflate both the money you yourself have poured into the project, as well as the number of buyers you already have ready to go for the units. That exaggerates the market value of the project, leading other investors to pile on. When the project goes belly up, you walk away unscathed because you were paid upfront and throughout the project. The other investors are left holding the bag. "The Trumps repeatedly lied about these two factors," Davidson wrote, "telling potential investors that far more units had been sold than really were and saying that they had invested much of their own money in the projects."

The final mystery, though, is why other people continued doing business with Trump, long after it was clear his endeavors tended to fail miserably. Time and again, Trump has been saved by injections of fresh money from eager investors, and especially from major banks to which he was deeply indebted.

The late 1990s were around the time when Trump shifted his business model from direct real estate development to essentially providing a brand name that could be placed on everything from buildings to books to TV shows to steaks to private universities. Once Trump's value lay in his brand and his self-promotion, rather than any actual real estate, his creditors may have felt they had to salvage him to keep the money flowing in.

That's one explanation. But as Davidson observed, another explanation for why Trump's partners kept coming back is that they weren't in the real-estate business to actually succeed at real estate: "Perhaps, the evidence suggests, some of Trump's partners are in the money-laundering and financial-fraud industries."

We should be careful here, especially in light of how Special Counsel Robert Mueller's investigation recently ended. If Occam's razor is any guide, it's possible that ego and cravenness alone are sufficient to explain Trump's refusal to release his tax returns. But the case is definitely borderline. If there is criminality, it's less likely to come in the form of a grand conspiracy to steal an election than it is to be found in the everyday swindles of a jumped-up used car salesman.