Americans finally got a look at President Trump's tax returns, thanks to The New York Times, which did the job House Democrats failed to do. Trump has not paid any federal income tax in 10 of the last 15 years. In 2016 and 2017, he paid just $750.
It's an incredibly outrageous story. The median household pays nearly three times as much federal income tax than the sitting president did. But more importantly, Trump's appalling business career is emblematic of an economy that is rigged in favor of wealthy elites who don't have to obey the law or face any consequences for failure. The impunity of the billionaire class is strangling this country.
At its core, the Times story has two parts: On the one hand, Trump is a poor businessman who constantly takes stupid risks and loses tons of money. His true skills are in marketing and entertainment — he made tons of money off The Apprentice (before which he was nearly broke) and through branding and endorsements, but most of the rest of his business empire is a money pit, and Trump is up to his neck in debt. The main reason he has paid almost nothing in tax is staggering losses in his golf resorts, particularly Trump National Doral in Miami, where he recorded a loss of $65.5 million in just one year. Thanks to tax provisions supported by both parties over the years and expanded in the 2017 Republican tax bill, it is possible to spread out those losses over years, and zero out one's tax liability over a prolonged period — or even backwards in time.
Trump appears to have a pathological aversion to paying anything in tax, even if he has plenty of money to cover the bill. He did have a tax bill of $70 million over three years in the mid-2000s, when he was flush with Apprentice revenues. He quickly bought up money-losing businesses, which zeroed out his tax liability — and even managed to talk the IRS into a very dubious $72 million refund on the prior tax payments in 2010. (That triggered an audit which is still in progress.) More recently, with Apprentice revenues and branding money drying up, Trump took out some enormous loans against his properties, like a $100 million mortgage against Trump Tower that is due in 2022 and on which he has paid none of the principal. If he doesn't win re-election, Trump may well be ruined financially.
On the other hand, Trump has also very likely broken many laws. Those golf course losses stink to high heaven — particularly the ones in Scotland, which Trump bought with cash at a time when American banks would not lend to him. More obviously, he has claimed what appear to be clearly personal spending and handouts to his children — like private jet expenses, $70,000 in hairstyling costs, $747,622 in consulting payments to Ivanka Trump, and so on — as business expenses. If the IRS took a really hard look at the entire Trump Organization and the whole Trump family, they would almost certainly find a crawling hive of illegality.
Incidentally, this story perfectly fits the pattern of the Times' previous monster story about Trump's inheritance. His father, Fred Trump, was an efficient (if racist) real estate developer and landlord. Donald gradually got his hands on his father's fortune, avoided hundreds of millions of dollars in inheritance taxes through a variety of probably-illegal schemes, and then abruptly sold off the empire after his father died for over $200 million less than it was actually worth.
That's Trump in a nutshell: grasping, scofflaw selfishness coupled to spectacular incompetence.
On one level, this kind of behavior is unusual for the American oligarchy. Most of the top one percent pay at least something in tax and most try to avoid ham-fisted personal lawbreaking. It's generally smart business to simply take whatever exemptions and exclusions one can get legally (which are very considerable) and pay the balance of the tax bill rather than clumsily incur huge losses or break the law in an obvious fashion.
Nevertheless, other oligarchs do share Trump's basic attitude towards taxation and laws — that taxes are a moral obscenity to be avoided wherever possible, and laws should be bent or dodged whenever they are inconvenient. Back in 2010, Wall Street billionaire Steven Schwarzman said that Obama's proposal to hike taxes on private equity firms was "like when Hitler invaded Poland in 1939." Through lobbying, campaign contributions, funding right-wing think tanks and publications, buying economics departments outright, and so forth, the ultra-rich have exercised their power to change American taxation from progressive to regressive. Including all kinds of taxes, today billionaires pay a smaller percentage of their income than the poor.
Meanwhile, it's not just Trump who is getting away with white-collar crime — a sweeping BuzzFeed News investigation recently described how the global banking elite have made vast sums laundering money for drug cartels, terrorists, and other criminals. That's just par for the course since laws against these things largely stopped being enforced over the last 15 years or so. Big banks, for instance, committed jaw-dropping crimes by the score during the Obama administration, yet were almost always let off with a wrist-slap fine. (The supposed worry was that enforcing the law would threaten financial stability.)
Thus we see a doom loop of increasing inequality and corruption. The rich use their money to shift the tax burden away from themselves and hollow out the American state, which gives them even more money, which they use to cut their taxes even more, and so on. Most oligarchs tolerate Trump because he indeed cut their taxes, and has given them everything they want on environmental, financial, and labor regulation. Many are supporting his re-election because the alternative of even modest tax increases or regulation in the public interest is, to them, violently distasteful (though others are supporting Biden, to be fair).
Perhaps in the future America should try enforcing its tax and white-collar crime laws, and making the billionaire class pay its fair share, before it ends up with a corrupt, lawless president who faces possible imprisonment and financial ruin if he loses his grip on power.