You surely read or heard last week the interview between alleged journalist George Stephanopoulos and Republican presidential candidate Donald Trump. Stephanopoulos, as you do know, works for ABC News and interviews people, although he was a senior communications director in the Clinton White House, has donated fat checks to the Clinton Foundation, and so is not exactly unbiased.
It says a lot about Trump that he even did the interview, knowing Stephanopoulos's background, but Trump is not afraid, whatever else he may or may not be.
During the course of the interview, Trump was pressed on his unwillingness to release his tax returns, as candidates typically do. He replied that he was under audit and would release them when the audit was completed. Stephanopoulos then asked him, well, what was his tax rate then?
Trump replied "That's none of your business." That alone ought to get him elected.
Now, I'm not going to go to that place were we talk about whether or not the audit should really matter. Some say it doesn't matter, and certainly doesn't prevent him from releasing the returns. Obama's IRS supposedly said he could release anything he wanted to -- again, a naturally unbiased source, although they may be right.
But here's the thing. It is pretty much none of our business. It is none, in the sense that if candidates were not routinely releasing 1040s all over the place, I wouldn't expect to be slavishly wondering what Trump's returns looked like.
Donald Trump is a very wealthy man, and his income from investments with that wealth and whatever sources he gets money each year is a lot. Does it matter if his taxable income in 2015 was $800 million or $2 billion? Not to me.
What matters to me, and should to everyone else, are two things:
1. He paid his taxes in compliance with Federal law.
2. He paid as little as his staff of accountants could arrange for him to pay.
These are both important, but nothing else really is. The former (#1) is important, because to file returns that were not compliant with Federal law, whether by his direction or his accountants' direction, would be a dishonorable and illegal action. The latter (#2) is important, because to have paid as little tax as possible shows a sense of frugality, conservative financial strategy, and Trump's ability to hire experts able to make the situation better. I applaud people who pay as little as they legally can. Trump said that's what he did, as I wrote here.
When Trump told Stephanopoulos that his "tax rate" was none of his business, he almost said what he should have said, i.e., "George, it's none of your business -- the rate I paid is what the law specifies as the tax rate for my income, same as you and everyone else who pays income taxes." Once you get past a certain income level, that rate goes up until you hit the highest bracket, which is about a 40% rate on income from then on (Or 92%, if Bernie Sanders had his way).
He could have said that he "paid X% on the first $10,000, Y% on the next $25,000, etc., etc., until you got to the last marginal rate, and paid whatever the capital gains rate is, in the law, on his capital gains." That is the only reasonable meaning of "what tax rate did you pay?" and the only reasonable answer. He paid what the law says he pays, on his income as presented in his return, less his expenses as presented in his return. Poof.
If anyone has a complaint as to why the amount of tax he ended up paying was what it was, they should not ask just The Donald or his accountants. They should ask the people who wrote the tax law. Frankly, not one person in 100 could possibly understand what is in his return enough to draw an inference that is relevant.
And about whom would the inference even be made? Do we not think that Trump hired the best accountants he could find, told them "Make it work so I pay the least tax I can legally pay" and then just looked it over and signed it? Is there any "bombshell" in there that would change anyone's mind? Does his amount of charitable donation make a difference to you? Do we not think he does a variety of charitable works that may or may not be deductible contributions? Do we care?
What is ridiculous is that precisely because not one in 100 people could come close to understanding his return, the press and the left (but I repeat myself) would take parts of it, spin them as the New York Times did with their hit piece on Trump over the weekend, and then splash incorrect interpretations all over their bully pulpit.
Here's what I would do if I'm The Donald. Take the 1040, which is the cover two pages, and release just them. We'll know how much he made and how much tax he paid on the taxable income. He can defend quite easily the difference between his adjusted gross income and his taxable income (i.e., his deductions) without having to show any supporting schedules.
Then, when the press squeals and hollers about it, he can point to Page 2, and show that the amount of tax he paid on his taxable income is what the law says he is supposed to pay. Then he can say that if the press is going to misrepresent the first two pages -- as they will -- to conflate adjusted gross with taxable income and come up with some meaningless "rate", he cannot trust them to interpret properly the supporting documents. "I paid the amount the law says I'm supposed to pay. Finito"
I really couldn't care less what Donald Trump's tax forms look like or what his tax rate is. It's certainly none of George Stephanopoulos's business. Barack Obama probably paid his taxes, too, and how did that work out?
I figured you'd agree.
Copyright 2016 by Robert Sutton
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