(Tax) Code Orange

Many see conflict as Don pushes new IRS regulations

WASHINGTON — As Republicans push for tax reform that could boost President Trump’s own bottom line, his massive business empire — and refusal to release his tax returns — raises questions about potential conflicts of interest.

Ethics experts warn that Trump’s complicated real estate holdings mean he’ll likely be directly impacted in a major way by any significant changes to the tax code — and warn that his refusal to show America what his holdings are means there’s no way to tell how he might benefit.

“Anybody who’s in the real estate business has a vested interest in the outcome of anything that has to do with taxes,” said Richard Painter, the top ethics lawyer during President George W. Bush’s administration.

Democrats have already been hammering the issue — using this Tuesday’s annual tax day as another reason to highlight Trump’s refusal to show how he makes his money and how much he pays to Uncle Sam.

“If President Trump is serious about passing real tax reform to help the middle class, he should start by releasing his own full tax returns to erase any doubt of where his priorities lie,” Senate Minority Leader Chuck Schumer (D-N.Y.) said. “Until President Trump releases his full tax returns, a cloud of suspicion will remain and make it much more difficult to get tax reform legislation through the Congress.”

Even some Republicans who want to see tax reform warn that Trump’s personal business empire could hurt their alreadyfraught attempts to get a bill passed.

“One is more open to that attack in the absence of disclosure on the tax reform front. It’ll certainly be a Democratic talking point,” said Rep. Mark Sanford (R-S.C.).

Sanford, a fiscal conservative who has long supported a major reduction in tax rates, is one of two House Republicans who have called for Trump to release his tax returns. He’s now worried that Trump’s refusal to release his personal financial information makes a difficult process of tax negotiations even harder. “These things have a cumulative effect and major-league tax reform is something that could be stalled, it’s something that could disappear, it’s something that could evaporate before Republicans’ eyes,” Sanford warned. “That’s the whole idea of disclosure. You avoid pitfalls, you avoid surprises. It’s what you don’t know that gets you in the world of politics.”

White House officials sidestepped questions about potential conflicts of interest and when or whether Trump will release his 2016 returns. Trump refused to make past returns public during the presidential election.

“We’ve asked and answered that several times. The President’s been under audit,” White House press secretary Sean Spicer said last week, echoing an excuse used last year. “The American people, frankly the middle class in particular and companies that are trying to grow here in the United States, are much more concerned about tax reform and allowing our economy to grow.”

Congressional Republicans are in the very early stages of crafting a tax plan, with a lot of disagreement in what might actually go into it.

It remains unclear exactly what benefits Trump could reap from tax reform. But potential areas include his obvious proposal to lower income tax rates for

top earners as well as changes to tax rates on limited liability “pass-through” corporations, which are currently taxed at individual income rates.

Trump has a number of these as part of his business empire, and called for slashing their tax rates in his campaign tax policy.

Leaked tax returns from 1995 and 2015, the only public returns available from Trump in recent years, show he’s likely used tax breaks to avoid paying millions.

“If he starts screwing around with the tax code you have two issues. One is conflicts of interest: Because he’s in the real estate business we know from the 1995 tax return he has a huge tax loss carried forward even though he probably didn’t lose any money. And then we have in 2015 a vested interest in this debate over the alternative minimum tax,” Painter said, pointing out that without that loophole Trump would have paid at least $2 million more in taxes.