The Art of Tax Evasion

In 2009, I had my first teaching job; it paid pennies. If you factor in my debt, mostly from student loans, I may have been just above the poverty level. I was forced to pay nearly half my gross income in student loan payments. I was forced to have two jobs: teaching grades 7-12 at a private school and working as an adjunct instructor at a local college. Neither paid well. I was still barely making ends meet. When I did my taxes for that year, I owed over a thousand dollars because having two jobs put me in a higher tax bracket, and neither job had taken out enough tax from my paychecks. I didn’t have the money, and I was scared to death. I finally scrounged up enough money to pay my federal income tax though it meant I didn't always get to eat, and I still could not come up with enough to pay my Alabama state income tax. They eventually garnished that amount from my 2010 tax refund. I’d gotten a minuscule tax refund that year, because I had lost my second job which lowered my income drastically.

 

Therefore, it makes me angry when politicians run on a platform of reducing taxes; it's usually Republicans, and the only people who get the reduced taxes are the wealthy. The poorest among us rarely get tax cuts, and yes, some of the middle class received more money in their checks after Trump's tax cut, but mine was only a few dollars. I doubt it has amounted to even $100 a year since it went into effect. However, taxes on wealthy Americans have fallen sharply in recent decades. Many still pay a lot to the federal government. A typical billionaire pays tens of millions of dollars in federal income taxes each year, but what is that compared to ordinary people like me paying nearly 25 percent of my annual salary? The wealthy’s tax rate may be higher than mine, but they have numerous ways to lower their tax burden with deductions. In 2018, I did not get a tax break because I moved into a slightly higher paying job and into a new tax bracket; I went from paying 15 percent to 22 percent. 

 

While most billionaires do pay some taxes, President Trump is apparently different. On Sunday, The New York Times(NYT) published an investigation of his finances based on thousands of pages of documents not previously made public. The Times exposé of the President's tax returns revealed a pitifully inept businessman and a serial tax evader crushed by massive debt that could expose him to conflicts of interest given his position as President with the power to help undisclosed lenders. The number one reason for being denied top-level security clearance is debt; it makes you susceptible to bribery and blackmail. His personal debt underscores a long-time fear about his administration—that he is managing US diplomacy to prioritize his own personal and financial goals rather than the broader national interests. Trump receives millions of dollars in income from countries like Turkey and the Philippines led by autocrats whom he has praised but who infringe on traditional US values like human rights. 

 

The NYT article showed that Trump paid no taxes in 11 of the 18 years between 2000 and 2017. In both 2016 and 2017, he paid only $750. That means in 2010 when I had to pay an exorbitant tax bill because I was working two jobs to survive and still ended up doing without in order to pay that tax bill, Donald Trump paid nothing in taxes. Trump was able to do so both because many of his businesses reported losing vast sums of money—which reduces his taxable income—and because he has engaged in questionable tax practices. Even while declaring losses, he managed to enjoy a lavish lifestyle by taking tax deductions on what most people would consider personal expenses including residences, aircraft, and $70,000 in hairstyling for television—all of this during a period when I went without food and had to work two jobs.

 

The publication of the well-researched article, based on more than two decades of his tax information obtained by The Times, came just days before the first presidential debate, and 37 days before an election in which he appears to be trailing Biden. It poses a serious challenge to a presidency that Trump may need to preserve to outrun creditors with hundreds of millions of dollars in loans soon coming due. It leaves the president facing many questions about his morals, behavior, and patriotism since he appears to be paying more in taxes to several foreign nations than he is to the United States. The reporting also raises the possibility that Trump's deceptive accounting practices, already the focus of several investigations in New York, could open him up to serious legal issues when he leaves office. For instance, The Times report says the president has been battling the Internal Revenue Service for years over whether losses he claimed should have resulted in a staggering tax refund of $73 million. 

 

The fact that Trump paid just $750 in taxes in two straight years should be the most damning since it is so identifiable and strikes such a clear comparison to the larger figure almost all Americans pay. If a man with his own airliner, gold-leafed homes, and a string of golf resorts can get away with that who is to argue the system is not permanently biased against regular people? Seth Hanlon, a Democratic policy adviser, pointed out, “In 2017, a single worker without children who made $18,000 would have paid $760 in federal income tax. Donald Trump paid $750.” Biden recently made this very explicit in a new ad that came out Sunday night:

Teachers paid $7,239
Firefighters paid $5,283
Nurses paid $10,216

Donald Trump paid $750 pic.twitter.com/5YE1cbYsBN

— Team Joe (Text JOE to 30330) (@TeamJoe) September 28, 2020

Which Donald Trump is the true Donald Trump? Is he the business mastermind who has been lying to the IRS about his losses? Or is he the failed businessman who has been lying to the American people about his success as a businessman? It seems every time Donald Trump is caught in a new lie or yet another political scandal, there’s always a tweet from the president’s past that makes him look like a hypocrite on the issue of the day. He is a Republican after all; it’s the party of hypocrisy. Here is what he said about Barack Obama’s taxes in 2012: 

@BarackObama who wants to raise all our taxes, only pays 20.5% on $790k salary. http://t.co/bqF26mQf Do as I say not as I do.

— Donald J. Trump (@realDonaldTrump) April 13, 2012

To compare Trump to his predecessors, the federal taxes paid by presidents over the past 40 years during their first year in office are as follows:

• Ronald Reagan: $165,202
• George H.W. Bush: $101,382
• Bill Clinton: $62,670
• George W. Bush: $250,221
• Barack Obama: $1,792,414
• Donald Trump: $750

Lily Batchelder, the Robert C. Kopple Family Professor of Taxation at New York University School of Law, said, “Trump’s tax returns suggest he has only ever been successful as a showman, not at running actual businesses.” I realize these revelations about Trump's finances and tax evasion are unlikely to change his strong emotional and cultish connection to his followers. He has been successful in constructing alternative political realities while discrediting journalists and with the help of propaganda from conservative media. After all, his supporters have ignored numerous stories about Trump's refusal to pay his creditors, casino bankruptcies, and morally questionable business practices that have been circulating for years. Throughout a political career filled with scandal, Trump has rarely paid a price for any of his scandals, outrages, and insults—any one of which would have doomed a normal politician. His brand is well known; he is a rule-breaker and a successful businessman. He may be a rule-breaker, i.e., a criminal and a fraud, he is definitely not a successful businessman according to his finances. In the past, he has explained that avoiding taxes shows he is a smart businessman and is an approach anyone would take if they could. Yet, what he has been doing is equivalent to tax evasion. On Sunday, Trump quickly adopted his typical tactic of trying to pass off serious revelations as nothing to concern voters because he said, "It's fake news. It's totally fake news. Made-up, fake.”

For any of my readers who continue to support Trump, I have some questions: What will it take for Trump to lose your support? His amoral, misogynistic, homophobic, racist behavior didn’t do it. His shady dealings with foreign countries haven’t done it. His rude and arrogant behavior hasn't done it. His disdain for the press and our veterans hasn't done it. His lack of business acumen and his penchant for tax evasion for over a decade are apparently not going to do it. What would change your mind? Can anything change it? Can you not see what is wrong with supporting this man?