Did you hear about the presidential candidate who used a provision of the U.S. tax code that allows for a reduction of tax liabilities due to a net loss?
It was Hillary Clinton, whose 2015 tax forms show a “net long-term capital (loss)” of $699,540.
Oh, yes, Donald Trump did it, too, though on a much larger scale because of the size of his business.
So, both candidates did more or less the same thing. But what were the weekend headlines after the New York Times obtained and published Trump’s documents?
“Donald Trump and his allies struggle to move past tax revelation,” from the Times.
“Why Donald Trump’s new tax revelations are so damaging,” from MSNBC.
“Donald Trump can’t shut down New York Times tax-leak showing he lost nearly $1 billion in 1995,” from the Daily Beast.
“Tax troubles threaten Trump as election day nears,” from the Los Angeles Times.
The television networks followed in lockstep, focusing exclusively on what they apparently perceived as a bad thing for Trump and his accounting of $916 million in losses to impact his tax liability.
On MSNBC came the remark from Mary Bruce: “Well, the Clinton campaign is calling this a bombshell. Donald Trump’s taxes and his refusal to release them has been a central issue in the campaign. And now, for the first time we’re getting a look at some of his actual returns and how he could have transformed red ink into a huge benefit.
“The New York Times reported Donald Trump could have avoided paying federal income taxes for years. Fragments of state records sent anonymously to the Times reportedly shows that in 1995 Trump declared more than a $916 million loss. The result of a financial wreckage of three casinos, his airline business, and the purchase of New York Plaza Hotel. The deduction so large, it could have allowed Trump to avoid paying federal income taxes for up to 18 years. Trump didn’t deny on last week’s debate stage.”
On NBC’s “Today,” Katy Tur reported: “One of the worst weeks so far on the campaign trail for Donald Trump just got worse. An anonymous tipster sent the New York Times a copy of Trump’s 1995 tax returns showing that he could have avoided paying federal income tax for nearly 20 years. Now the campaign is crying foul, but not denying it, and the candidate is trying to change the subject by attacking Clinton’s marriage.”
But by the Times’ own assessment, there was nothing illegal or improper in the Trump tax filings. The report didn’t address Clinton’s own related filings.
In fact, the report quoted Jack Mitnick, a certified public account who handled Trump’s tax matters for years. He told the Times he no longer has access to the original documents and cannot speak regarding Trump’s taxes without authorization. But he explained that Trump’s approach to taxes was “no different from that of his other wealthy clients.”
“They all benefited in the same way,” he told the Times.
In Trump’s 1987 “The Art of the Deal,” he even discussed the issue.
Networks still criticized him, with one saying, “His campaign saying in a statement that, ‘Mr. Trump is a highly skilled businessman who has a fiduciary responsibility to his business, his family, and employees to pay no more tax than legally required.'”
That idea actually didn’t originate with Trump.
U.S. Supreme Court Justice Louis D. Brandeis, who died in 1941, wrote an essay titled “Thoughts on Legitimate Tax Avoidance.”
“I live in Alexandria, Virginia. Near the Supreme Court chambers is a toll bridge across the Potomac. When in a rush, I pay the dollar toll and get home early. However, I usually drive outside the downtown section of the city and cross the Potomac on a free bridge,” he wrote.
“This bridge was placed outside the downtown Washington, D.C., area to serve a useful social service: getting drivers to drive the extra mile to help alleviate congestion during rush hour.
“If I went over the toll bridge and through the barrier without paying the toll, I would be committing tax evasion. ‘If, however, I drive the extra mile outside the city of Washington and take the free bridge, I am using a legitimate, logical and suitable method of tax avoidance, and I am performing a useful social service by doing so.
“For my tax evasion, I should be punished. For my tax avoidance, I should be commended. The tragedy of life is that so few people know that the free bridge even exists!” he wrote.
Zerohedge reported Clinton’s use of the “same tax avoidance ‘scheme’ as Trump.”
Tyler Durden wrote: “Well this is a little awkward. With the leaked 1995 Trump tax returns ‘scandal’ focused on the billionaire’s yuuge ‘net operating loss’ and how it might have ‘legally’ enabled him to pay no taxes for years, we now discover none other than Hillary Rodham Clinton utilized a $700,000 ‘loss’ to avoid paying some taxes in 2015.”
(The bold-face is in the original report.)
He noted a Clinton spokesman, on the issue of Trump’s taxes, wrote: “There it is. This bombshell report reveals the colossal nature of Donald Trump’s past business failures and just how long he may have avoided paying any federal income taxes whatsoever. In one year, Donald Trump lost nearly a billion dollars. A billion. He stiffed small businesses, laid off workers, and walked away from hardworking communities. And how did it work out for him? He apparently got to avoid paying taxes for nearly two decades – while tens of millions of working families paid theirs. He calls that ‘smart.’ Now that the gig is up, why doesn’t he go ahead and release his returns to show us all how ‘smart’ he really is?”
The Clinton campaign statement didn’t mention her own use of the same provision.
Durden includes an image of Clinton’s tax return, “Net long-term capital gain or (loss),” that shows the “-699,540” figure.
“While not on the scale of Trump’s business ‘operating loss,’ Hillary Clinton – like many ‘wealthy’ individuals’ is taking advantage of a legal scheme to use historical losses to avoid paying current taxes.”
He quotes Bloomberg that the tax break “is among the wealthy’s most used.”
By the way, he noted, “The NYT itself is also perfectly happy to take advantage of the U.S. tax to minimize the amount of money it pays to the government: in 2014 the company got a tax refund of $3.6 million despite having a $29.9 million pretax profit, an effective negative tax rate for 2014, which it explained was favorably affected by approximately $21.1 million for the reversal of reserves for uncertain tax positions due to the lapse of applicable statutes of limitations.”
He wrote, “Simply put – pot, kettle, black.”
Brent Bozell of the Media Research Center noted the Times’ hypocrisy didn’t stop there.
He reported it was in 2009 when the Times refused to report the leaked ClimateGate emails that showed how the left was “lying to the public about climate change.”
At the time, the paper explained it refused to report the story because the ClimateGate emails were “acquired illegally and contain all manner of private information and statements that were never intended for the public eye, so they won’t be posted here.”
“The duplicity of the Times publishing private tax information about a Republican presidential candidate is blatantly obvious when you consider that they refused to publish the ClimateGate emails. The Times made a public editorial decision not to publish private emails exposing the ClimateGate lies because they damaged their left-wing political agenda. But here they are all too happy to publish private tax return information of a GOP candidate – in possible violation of state and/or federal law – because it advances their left-wing political agenda,” he said.
He continued: “The New York Times laid bare its hypocrisy on their Trump tax story and now they must explain themselves. If they remain silent, this will be just another example of the Times conveniently jettisoning journalistic standards when doing so would harm Republicans. If the Times is to retain any integrity in its newsroom, they must stop aiding and abetting the Clinton campaign. Sadly, no one expects that to happen.”
