The New Neo

The New York Times would have you believe that it’s a big big story to learn that Donald Trump sometimes lost a lot of money and most likely took a tax write-off for it in accordance with the law.

Such a story should be a big yawn and an even bigger “so what?” But the Times is counting on its propaganda skills and its ability to manipulate enough readers to make a difference. And with the Times it’s not just its own readers, but its influence on readers of other publications and consumers of other news and social media.

What is the word they want to get out? Well, if they were honest, it would go something like this: Real estate mogul Donald Trump sometimes loses big, as you already know if you know his history or the real estate development business. 1995, the year for which we’ve obtained some tax records of Trump’s, was one of those years when he lost big. According to current tax laws, Trump (exactly like anyone else who might be in his position, including us or you if we were dealing in that sort of business) is entitled by those losses to a particular kind of write-off for a certain number of future years. And like all of us, he probably took the tax advantage to which the law entitles him. He would have been a fool not to, and his accountants would have been negligent not to advise him to do it.

But that doesn’t quite have the requisite punch, does it? The way the Times wrote the article was different [emphasis mine]:

The 1995 tax records, never before disclosed, reveal the extraordinary tax benefits that Mr. Trump, the Republican presidential nominee, derived from the financial wreckage he left behind in the early 1990s through mismanagement of three Atlantic City casinos, his ill-fated foray into the airline business and his ill-timed purchase of the Plaza Hotel in Manhattan.

Tax experts hired by The Times to analyze Mr. Trump’s 1995 records said that tax rules especially advantageous to wealthy filers would have allowed Mr. Trump to use his $916 million loss to cancel out an equivalent amount of taxable income over an 18-year period…

The $916 million loss certainly could have eliminated any federal income taxes Mr. Trump otherwise would have owed on the $50,000 to $100,000 he was paid for each episode of “The Apprentice,” or the roughly $45 million he was paid between 1995 and 2009 when he was chairman or chief executive of the publicly traded company he created to assume ownership of his troubled Atlantic City casinos. Ordinary investors in the new company, meanwhile, saw the value of their shares plunge to 17 cents from $35.50, while scores of contractors went unpaid for work on Mr. Trump’s casinos and casino bondholders received pennies on the dollar.

“He has a vast benefit from his destruction” in the early 1990s, said one of the experts, Joel Rosenfeld, an assistant professor at New York University’s Schack Institute of Real Estate. Mr. Rosenfeld offered this description of what he would advise a client who came to him with a tax return like Mr. Trump’s: “Do you realize you can create $916 million in income without paying a nickel in taxes?”

There’s a lot going on there, isn’t there? I bow to no one in my detestation of Donald Trump, but following the tax laws is not one of the things for which I’m going to excoriate him. I’m not even so concerned that he didn’t always make good decisions in business; anyone who deals on that scale is going to have some “ill-fated” and “ill-timed” purchases. Hey, I’ve had some myself, although they’ve been confined to some “extraordinarily” small-scale dabbling in stocks.

It is quite obvious that the Times is creating a narrative of a rapacious top-hatted exploitative Rich Uncle Pennybags and using the tax story to push it. Now, Trump may indeed be a rapacious exploitative SOB (minus the top hat), but that has nothing whatsoever to do with the story of these completely legal tax returns and speculation on what would probably happen next in terms of deductions.

The Times is driving home three points. The first is that sometimes Trump failed at certain business endeavors, and they would like you to therefore see him as a failure. The second is that despite being a lousy businessman, Trump has too much money; in other words, the paper is trying to drum up class envy. The third is that if you put the first one and the second one together, you can see that Trump is rich despite his being incompetent, and that can only be explained by the fact that he’s a cheater and an exploiter of the people who work for him and those who invested with him. The fourth is that even though everything he did with his taxes was completely legal, it’s a form of cheating and ties in with Trump’s cheating in number three.

If anyone objects to that last bit, the proper remedy would be to change the tax code, of course, but the Times hasn’t bothered to explain why the law is written that way, or what would be the pros and cons of changing it. The Wall Street Journal attempts to give it some context here:

The tax treatment of losses, bound to become a subject of national debate, is a typically uncontroversial feature of the income-tax system. The government doesn’t pay net refunds when business owners lose money, but it lets taxpayers use those losses to smooth their tax payments as they make money. That reflects the fact that “the natural business cycle of a taxpayer may exceed 12 months,” according to a congressional report.

Typically, for federal returns, such net operating losses can be carried backward for two years to offset past income, then kept on a taxpayer’s books for 20 years. Mr. Trump’s losses could only qualify for a 15-year carryforward under the law at the time.

Real-estate developers can generate losses more easily than other taxpayers. They can take deductions for depreciation of their property and can also deduct interest when they borrow. Unlike investors in other businesses, they can use those losses to offset other income.

Tax law is nothing if not complicated, and it’s especially complicated if you get into the laws governing the very rich with many investments. Most of us have enough trouble understanding our own taxes without wading into the deep waters of the taxes of a typical large-scale real estate developer. But the Times considers that lack of understanding a feature, not a bug; an opportunity to push the propaganda line it favors. Trump has done them a favor, of course, by not disclosing all of this long ago, which would have at least stilled the part of the argument that hints that he’s hiding something even bigger. He probably has calculated that whatever is in his tax returns would upset the public, even if perfectly legal, and that it was smarter to withhold them. But it was inevitable that some of it would be leaked anyway.

Trump as candidate always had very unique vulnerabilities. The MSM, the left, the Times, Hillary Clinton, all of the above, are doing exactly what could have been (and was) easily predicted: bringing out this sort of thing at a timely juncture, just a few weeks before the election. They’ve got plenty more where that came from. Did anyone ever doubt they would be able to obtain access to some of Trump’s tax filings? And does anyone have any doubt that the following statements by Hillary Clinton during last week’s debate were probably the result of advance knowledge from the Times that the tax story was coming out?:

“There is something he is hiding,” Clinton said of Trump during the debate.

“Or maybe he doesn’t want the American people, all of you watching tonight, to know that he’s paid nothing in federal taxes, because the only years that anybody’s ever seen were a couple of years when he had to turn them over to state authorities when he was trying to get a casino license, and they showed he didn’t pay any federal income tax,” she said.

“That makes me smart,” Trump said.

Well, I wouldn’t go that far. At the very least, it makes him not-dumb. It also makes his tax accountants smart, or at least competent.

Neither the Times nor Hillary suggests what Trump might have done instead, of course. Not made money? Not lost it? Hired accountants who didn’t know their asses from their elbows? Donated many millions to the IRS of his own free will, over and above what was required?

Or remained a Democrat, perhaps? Then all would have been forgiven.