I previously wrote a column stating that there was no reason precluding Trump from releasing his returns because of an ongoing audit. What I did not address is whether he should release his returns. The press commentary since, culminating in The New York Times column released Saturday night in time for the Sunday news shows, displays the media’s complete ignorance regarding taxes and their willingness to use it to destroy Trump in any manner.
Unless you have been under a rock, you know The New York Times was somehow delivered three pages from Trump’s 1995 tax return showing a loss of close to $916 million. There were two illegalities in the Times’ “reporting” and two significant distortions in what was supposed to be a hard news piece.
· The first illegality is the fact that the newspaper released the tax returns which were obtained illegally. There have been discussions that the NYT would win this issue in court on the first amendment. They would not and should not. Think of this. What if someone got a copy of your personal tax return and released it on the internet? Would you think that was legal? Just because Trump is running for president does not translate to his losing his right to release his returns on his own terms. What the NYT has done is use the Obama playbook. We will do something illegal, but by time it goes to court the effects will already be set in stone -- the election.
· The second illegality is that the CPA who prepared the return spoke to the NYT and confirmed the documents are real. David Barstow, one of the columnists, spoke with Jack Mitnick, the man who prepared the returns. He confirmed that the documents are real. I understand that Mitnick is retired, but he has a fiduciary responsibility to not even acknowledge any aspect of this. I, as a CPA, would have my license yanked if I went to the press with info about one of my clients. If a bank calls me to get documents for a client, I will not so much as even admit that they are a client -- not without a clear directive from my client and then I forward the documents to my client to send to the bank. I know Mitnick is 80 years old, but he must have lost his mind to sit down with the NYT and talk about those returns.
· The first distortion is that the NYT stated the loss created would be used over a two-decade period (in the column itself defined as 18 years). This is pure, unmitigated conjecture in a supposed hard-news piece run on their front page. This is prognostication akin to picking who will win the Kentucky Derby in a 20-horse field. In fact, the bookies have more information on the horses than the NYT did in figuring out this 18-year, no-tax period. The NYT made this up out of whole cloth.
Why did they do that? Because they knew that everyone would run with it. Every liberal press source ran it verbatim. Even Chris Wallace, one of the best newsmen in the business, ran with it on Fox News Sunday. So did Rich Galen published here on Townhall.com. The truth did not matter; the attack on Trump did.
To be clear, the NYT has zero idea how that tax loss was used and neither do I.
· They repeatedly stated that a net operating loss (NOL) was a tax loophole used by rich people like Trump. This could not be further from the truth. The fact is they probably are clueless on the use of this area of the tax code because not one person involved in printing this column has ever done anything other than draw a salary from someone like a Donald Trump – someone who takes a risk.
The use of NOLs is used by millions (no exaggeration) of Americans. And it is a smart area of the tax code. It encourages people to start businesses and take risks. If they lose money in the beginning, the business owner gets to take that loss against future earnings. I personally have about 20 clients with NOLs. My clients take risks. Sometimes they win and sometimes they lose. Or they will just have a bad year, and who hasn’t in this Obama economy of no growth. Or a taxpayer loses money on an investment and they get to carry the loss forward to future years. This is not a rich person’s tax code section or a poor person’s tax code section. This is an American tax code section.
Even if Trump avoided income taxes in certain years, he most likely still paid substantial Social Security and Medicare taxes. These taxes are not avoided by having a NOL. He also paid millions of dollars in other taxes such as property taxes and sales taxes. He was in no way tax free.
The reason Trump has not released his tax returns is exactly because of this. Do you think it would be any different if he did release them (think Romney)? Half the CPA’s I know would not be able to analyze his returns because they are so complex with all of his entities. Do you think a Columbia journalism major at either the NYT or Washington Post would be able to? Or any of the people at the Clinton campaign? Just read Eugene Robinson, at the Post, who conjectured Trump was hiding his ties to Putin in his returns. This unknowing person does not know that Trump’s returns would never disclose that, but Robinson was either too lazy or too ignorant to read the 104 pages of Trump’s financial disclosures where Robinson could get an inkling of a Russian tie.
The New York Times is running a sportsbook. They are laying 2-1 odds on the fact that you are too stupid to understand they broke the law and distorted the facts so you would not vote for Trump.
Make them lose the bet.