Trump says laws at fault for his tax avoid­ance

Vows to use his fis­cal dex­ter­ity as pres­i­dent

The Washington Times Weekly - - Politics - BY SETH MCLAUGH­LIN AND BEN WOLFGANG

Seek­ing to right his strug­gling cam­paign, GOP pres­i­den­tial nom­i­nee Don­ald Trump de­fended his tax his­tory, blam­ing politi­cians for writ­ing laws he used to avoid hefty tax bills, and vow­ing to put that fi­nan­cial wiz­ardry to use in the White House.

Mr. Trump did not dis­pute this week­end’s re­port by The New York Times that he claimed nearly $1 bil­lion in busi­ness losses in 1995, po­ten­tially eras­ing years of in­come tax li­a­bil­ity. In­stead, the bil­lion­aire busi­ness­man said claim­ing those losses al­lowed him to keep his real es­tate em­pire afloat when oth­ers went belly-up.

“That did not hap­pen by chance or luck. It hap­pened by ac­tion and tal­ent — a lot of tal­ent,” Mr. Trump said at a cam­paign stop in Pueblo, Colorado.

Hil­lary Clinton, his Demo­cratic op­po­nent, dis­missed his ex­pla­na­tions and said she and other Amer­i­cans were cheated by Mr. Trump’s tax de­duc­tions. She likened him to Wells Fargo, the bank­ing gi­ant that re­cently ad­mit­ted its em­ploy­ees cre­ated fake ac­counts un­der real cus­tomers’ names to try to boost the com­pany’s bot­tom line.

“He abuses his power, games the sys­tem and puts his own in­ter­ests ahead of the coun­try’s,” Mrs. Clinton said in Toledo, Ohio. “It’s al­ways Trump first and ev­ery­one else last.”

The for­mer sec­re­tary of state said the re­port­ing on Mr. Trump’s taxes con­firms her own claims that Mr. Trump has re­fused to re­lease his tax re­turns be­cause they will show he has used ag­gres­sive tac­tics to avoid a tax li­a­bil­ity.

Wealthy Amer­i­cans and cor­po­ra­tions make reg­u­lar use of net op­er­at­ing losses, car­ry­ing them for­ward to can­cel out fu­ture tax li­a­bil­i­ties.

Gen­eral Mo­tors was able to carry bil­lions of dol­lars in op­er­at­ing losses for­ward af­ter the gov­ern­ment bailout last decade.

The tax rev­e­la­tions came at the end of a rough week for Mr. Trump, whose un­steady de­bate per­for­mance has trans­lated into slip­ping poll num­bers.

Quin­nip­iac Univer­sity re­leased a se­ries of sur­veys show­ing that Mrs. Clinton is lead­ing Mr. Trump in Florida, North Carolina and Pennsylvania, while Mr. Trump is run­ning ahead of the Demo­crat in Ohio.

Na­tion­ally, Mrs. Clinton led Mr. Trump by 5 per­cent­age points in a four-way matchup that also in­cludes Lib­er­tar­ian Party can­di­date Gary John­son and Green Party nom­i­nee Jill Stein. A CBS News poll puts Mrs. Clinton up 4 points.

Mr. Trump said the world of busi­ness is com­plex and said Mrs. Clinton doesn’t un­der­stand it. He said she’s boosted her own fi­nances by sell­ing po­lit­i­cal ac­cess to her­self and her hus­band.

Mr. Trump also ac­cused Mrs. Clinton of hypocrisy by com­par­ing his tax be­hav­ior to Wells Fargo’s shady busi­ness prac­tices, which have led the com­pany to fire thou­sands of em­ploy­ees.

The Clinton cam­paign has ac­cepted at least $258,351 in do­na­tions from em­ploy­ees of Wells Fargo, cam­paign fi­nance records show, and the Clinton Foun­da­tion also has ac­cepted be­tween $1,000 and $5,000 from the bank’s com­mu­nity sup­port cam­paign.

Mrs. Clinton’s cor­po­rate ties have long been a thorn in her side po­lit­i­cally, and have left many pro­gres­sives skep­ti­cal of her abil­ity and will­ing­ness to re­form Wall Street. The for­mer first lady and New York sen­a­tor also ac­cepted hun­dreds of thou­sands of dol­lars for paid speeches to Gold­man Sachs and has re­fused to re­lease tran­scripts of those speeches.

Still, she main­tains that she’s fully com­mit­ted to tak­ing on wealthy spe­cial in­ter­ests, in­clud­ing those in the bank­ing and cor­po­rate sec­tors.

“Today I want to send a clear mes­sage to ev­ery board­room, ev­ery ex­ec­u­tive suite across Amer­ica: If you scam your cus­tomers, ex­ploit your em­ploy­ees, pol­lute our en­vi­ron­ment or rip off tax­pay­ers, we will find ways to hold you ac­count­able,” she said.

More bad news ar­rived for Mr. Trump when New York At­tor­ney Gen­eral Eric Sch­nei­der­man is­sued a cease-and­de­sist no­tice to Mr. Trump’s char­i­ta­ble foun­da­tion, say­ing it vi­o­lated the law by not ap­pro­pri­ately reg­is­ter­ing with the state.

The Trump cam­paign sug­gested Mr. Sch­nei­der­man, a Demo­crat, was act­ing in a par­ti­san man­ner.

“While we re­main very con­cerned about the po­lit­i­cal mo­tives be­hind AG Sch­nei­der­man’s in­ves­ti­ga­tion, the Trump Foun­da­tion nev­er­the­less in­tends to co­op­er­ate fully with the in­ves­ti­ga­tion,” said Hope Hicks, a Trump spokesper­son. “Be­cause this is an on­go­ing le­gal mat­ter, the Trump Foun­da­tion will not com­ment fur­ther at this time.”

De­spite the mount­ing headaches, Mr. Trump sounded an optimistic note in Colorado, telling his sup­port­ers that his busi­ness record — in­clud­ing his tax his­tory — shows that he thrives un­der pres­sure and is ready to steer the na­tion to­ward more pros­per­ous times.

“I knew in my heart, when the chips are down, that is when I per­form the best,” Mr. Trump said. “When peo­ple make the mis­take of un­der­es­ti­mat­ing me, that is when they are in for their big­gest sur­prise.”

The head­lin­ers give way to their run­ning mates, when Indiana Gov. Mike Pence and Sen. Tim Kaine of Virginia face off in the vice pres­i­den­tial de­bate, which is sched­uled to kick off at 9 p.m. at Long­wood Univer­sity in Virginia.

Mr. Pence will likely find him­self hav­ing to de­fend Mr. Trump’s tax breaks, which, ac­cord­ing to por­tions of state re­turns from New York and New Jersey, showed he claimed a net op­er­at­ing loss of $916 mil­lion in 1995.

The New York Times, which said it re­ceived three pages of Mr. Trump’s re­turns in the mail and ver­i­fied them with his then-ac­coun­tant, said those losses could have shielded Mr. Trump from hav­ing an in­come tax li­a­bil­ity for up to 18 years.

Mr. Trump said he had a fidu­ciary duty to his com­pany to max­i­mize prof­its by min­i­miz­ing taxes owed, and said he would have been re­miss not to use the tax breaks avail­able to him.

“I mean, hon­estly, I have bril­liantly — I have bril­liantly used the laws and of­ten said on the cam­paign trail that I have a fidu­ciary re­spon­si­bil­ity to pay no more tax than is legally re­quired like any­body else,” he said. “Or, put another way, to pay as lit­tle tax as legally pos­si­ble. And I must tell you, I hate the way they spend our tax dol­lars.”

But Robert Hughes, pro­fes­sor of le­gal stud­ies and busi­ness ethics at the Univer­sity of Pennsylvania’s Whar­ton School, said that fidu­ciary re­spon­si­bil­ity does not nec­es­sar­ily ex­tend to his per­sonal in­come taxes.

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