Donald Trump is a scam artist. This is what he does. He finds ways to make money at any cost no matter who it financially harms as so long as he can get away with whatever his latest scheme is.
Currently, Trump’s scheme is his attempt to become President of the United States, and so far, it’s working. The same idiots who think he’s a good businessman and fall for his schtick every time he sells it, are buying his schtick that he’s actually capable of being leader of the free world. He’s already won the Republican primary and is neck and neck with Hillary Clinton in the polls for the general election.
His racist and misogynistic demagoguery is apparently very appealing to many, and besides that being scary in and of itself, it’s horrifying that he’s as close to the Oval Office as he is.
All that aside, it’s now been revealed that Trump has been using a maneuver in his taxes that Congress seemingly shut down in 1984.
The New York Times recently reported:
“Donald J. Trump declared a $916 million loss on his 1995 income tax returns, a tax deduction so substantial it could have allowed him to legally avoid paying any federal income taxes for up to 18 years, records obtained by The New York Times show.”
Now, Edward Kleinbard, a legal scholar at the University of Southern California, has revealed how Trump is using one specific maneuver to avoid paying taxes.
According to The Washington Post:
“It appears Trump gave his creditors shares of his failing businesses to avoid taxes on hundreds of millions of dollars they granted him in debt relief, a practice that has since been explicitly outlawed.”
“The reason nobody thought of it is that nobody thought that it existed. The real surprise here is that he apparently got away with it.”
Here is how The Washington Post explains it:
“The maneuver began when Trump’s businesses borrowed money from banks to purchase the Plaza Hotel in New York and his casinos in Atlantic City. Neither Trump nor his businesses owed taxes on the cash infusion because the tax code doesn’t consider debt to be taxable income.”
Attorney from the Tax Policy Center, Steven M. Rosenthal, explained that you can’t tax what you borrow.
The Washington Post went on to say:
“Trump then claimed on tax returns that he had lost the money, but he did not acknowledge the income in the form of canceled debts. He likely did not have to pay taxes on that money — which totaled at least $425 million, Rosenthal estimates based on his review of the documents obtained by the Times.”
Then it is explained how he got out of paying taxes on his canceled debts:
“First, in exchange for writing down his debts, he gave the creditors shares of the partnerships through which he controlled the failing hotel and casinos. Then he essentially argued that the lenders had not done him a favor at all, because they had simply exchanged one asset for another.
The asset the banks gave up was real money Trump owed them. What they got, on the other hand, were shares in failing properties. Trump claimed that he and his borrowers were square.”
What is concerning is this:
“Kleinbard and his colleagues developed an early version of the maneuver, sometimes called a “stock-for-debt swap,” more than three decades ago when he worked for Salomon Brothers. He recalled using it to engineer roughly 75 deals for the firm’s corporate clients in about a year-and-a half. Business was good until 1984, when Congress mostly shut down the practice. It was, Kleinbard admitted, clearly an abuse of the system.”
Kleinbard is also “certain” he would have won a court battle with Trump had authorities required the real estate mogul to pay what he owes.
This here is what should make everyone reading this furious. The Washington Post reports:
“Trump also would have been able to count his substantial losses against any future income…possibly sparing him from the need to pay federal income tax again for years. Under the tax code, taxpayers can count their losses against future income because they aren’t really better off until they’re back in the black. By swapping stock for debt, Trump would have been able to claim he was still in the red.
…Trump did not acknowledge that these cancellations effectively wiped out about half of his $916 million loss…Trump might have used a similar maneuver with regard to loans that were not listed in the documents, or he might have used some other legal strategy to claim that he really was still in the hole.”
The system is literally letting us down by not requiring scam artists like Trump to pay their fair share. What he did could definitely be brought to court, and even Trump’s own legal counsel isn’t certain they would win.
Trump likes to claim the “system is rigged” and really, he would know best of all, because he’s been the one using it for his benefit without being caught.
This tax issue is in addition to the fact that he’s about to go to court in two separate cases — one for fraud in regards to Trump University, and the other for his alleged rape of a 13-year-old girl. Both have court dates set in the coming months.
If you haven’t noticed by now, Trump shouldn’t be allowed anywhere near the Oval Office, and we need to make sure of that come November 8th.
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