Tuesday, June 28, 2016

David Cay Johnston; Trump Probably Committed Tax Fraud

AMY GOODMAN: We’re going to turn now to one of your former colleagues. We’re going to turn to a new exposéin The Daily Beast headlined "New Evidence Donald Trump Didn’t Pay Taxes," the article published as Trump is refusing to release his tax records. Joining us from Rochester, New York City , is the Pulitzer Prize-winning reporter David Cay Johnston. He used to work at The New York Times, now reporting for The Daily Beast and other publications. David, what did you find?

DAVID CAY JOHNSTON: Well, Donald has done a very good job of trying to keep a number of things out of the public record and shut down investigations, but I found two tax appeals he filed from the year 1984, one with the City of New York and one with the state. And in one of these two cases, Donald filed something called a Schedule C. That’s what a freelancer files. He reported zero income and $626,000 of expenses, with no receipts and no documentation. That’s something that could be construed as tax fraud.

During the hearing, which lasted two days, the CPA and lawyer who had done Trump’s tax returns for years was shown the tax return, and he said, "Well, that’s my signature, but I didn’t prepare that tax return." Now, it was a photocopy. And, of course, you can put a name on a document with a photocopy machine. My first big national investigative reporting award was for just such a device used by a corrupt Michigan politician. And The Trump Organization didn’t respond to any of my questions—the Trump campaign—about this. Donald was hit in one case with a 35 percent penalty. And in the other case, the 25 percent penalty was not applied, only because nobody could find the original tax return, which I think suggests that a photocopy is what was mailed in in the first place.

It also shows, in these two cases, that in the year 1984 Donald paid no federal income taxes. And there’s very good reason to think he doesn’t pay them now, because of a provision in federal law that allows large real estate professionals to live without paying income taxes.

AMY GOODMAN: In May on ABC’s Good Morning America, Donald Trump fielded questions from George Stephanopoulos about his tax history.

GEORGE STEPHANOPOULOS: What is your tax rate?

DONALD TRUMP: It’s none of your business. You’ll see it when I release. But I fight very hard to pay as little tax as possible.

AMY GOODMAN: David Cay Johnston?

DAVID CAY JOHNSTON: Well, I think that tells you, the way he snapped at the question, that Donald has no intention of ever producing his tax returns. If he’s elected president, he won’t do so. So my column—I’m not a reporter now, I’m a columnist—my column showed how by adding one line to Section 6103 of the tax code, Congress could make public the returns of presidential candidates who appear on the ballot in many states. And back in the 1920s, tax returns were public record. So there’s no reason not to do this. Those Republicans who are very distressed about Mr. Trump, I would think, might be very interested in this as a way to bring forth the things that trouble them.

AMY GOODMAN: Now, go back to—because you said it very quickly before that clip, go back to why he doesn’t have to pay taxes.

DAVID CAY JOHNSTON: Because if Donald is anywhere near as wealthy as he claims to be, and Donald has acknowledged under oath that he basically makes up numbers that make him look good—if he has enough depreciation from his buildings, he is allowed to use that to offset income from the other things, like selling ties made in China and running golf courses. And that means that he effectively can get a zero-interest loan from the government of his taxes. In my USAToday column back in March, I showed how if Trump’s numbers that he’s publicly said were true, then he stands to make about $130 million net profit off his income taxes from a single year. The taxes would have only been $23 million.

See the entire show on Democracy Now. 

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