Trump says laws at fault for his tax avoidance
Vows to use his fiscal dexterity as president
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.