Trump & Clinton both cited losses to get tax breaks
Hillary Clinton’s campaign has accused Donald Trump of tax avoidance, citing documents from 1995 showing that a major loss “could have” allowed him to pay no income tax for years. Clinton’s own tax returns show she used the same device, though.
The leading story in the New York Times on Sunday was the discovery that the Republican presidential candidate had claimed a $916 million Net Operating Loss (NOL) on his 1995 tax return, which could have allowed the billionaire businessman to legally avoid paying any federal income tax for up to 18 years.
This was based on the three pages from what appears to be Trump’s tax return that were mailed to the newspaper anonymously from a New York address.
The documents “reveal the extraordinary tax benefits that Mr. Trump… derived from the financial wreckage he left behind in the early 1990s through mismanagement of three Atlantic City casinos, his ill-fated foray into the airline business and his ill-timed purchase of the Plaza Hotel in Manhattan,” the Times wrote.
While the newspaper was careful to note that “nothing in the 1995 documents suggested any wrongdoing by Mr. Trump,” the Democratic nominee pounced on the revelation.
Three pages of Trump's tax returns confirm he's a business failure who's gotten rich at your expense. Imagine what he’s hiding in the rest. pic.twitter.com/E3Wt3KRleN— Hillary Clinton (@HillaryClinton) October 3, 2016
Trump’s campaign responded by accusing the New York Times of being an “extension of the Clinton Campaign, the Democratic Party and their global special interests,” saying the only news in the story was that a tax document from more than 20 years ago was “illegally obtained.” Trump has paid hundreds of millions of dollars in taxes, they said.
Clinton and her running mate, Tim Kaine, released their tax returns in August, clamoring for Trump to do the same. The Republican candidate has so far refused, citing an ongoing audit by the Internal Revenue Service. As the Times noted, the sheer size of the loss he declared in 1995 “would have probably attracted extra scrutiny” from the IRS.
Bloggers who looked over Bill and Hillary Clinton’s 2015 tax return, however, noticed that they used the same device, citing a “capital loss carryover” of $699,540 to claim a $3,000 tax break. The difference appears to be one of scale.
Using net operating losses to minimize state and federal taxes “has long been a strategy in corporate America,” said the blogger writing at Zero Hedge, adding that the New York Times itself claimed a $3.6 million tax refund in 2014 despite a $29.9 million pre-tax profit.