Trump’s tax returns just the first step
Everyone is shocked, shocked to learn that
That’s certainly the lesson of
What to do with this information? Beyond all the Trump-specific takeaways — such as, duh, we need to see his tax returns — two much broader policy conclusions shouldn’t get lost here:
1. We need to adequately fund the
2. What’s scandalous here isn’t just what’s illegal. It’s also what is legal.
If you’re wondering how Trump was able to duck the tax authorities for so long, given the brazen acts documented by the
There are lots of reasons tax cheats are sleeping easier than they used to. One is that
Consequently, audit rates have plummeted, especially for corporations and the ultrawealthy. Since fiscal 2011, the audit rate for big corporations (those with at least
To some extent, corporations and the rich have always managed to outgun the
Which brings me to the second issue.
There’s a bunch of stuff the Trumps reportedly did that may not be illegal, but should be. When it comes to taxes — like lots of other policy arenas, such as campaign finance — we need to work harder not only to enforce the laws on the books, but also to make those laws fairer, clearer and less susceptible to exploitation.
Real estate, in particular, has lots and lots of loopholes and other opportunities for (legal) tax avoidance. Relative to other taxpayers, for instance, real estate investors can more easily use losses to reduce or completely wipe out future tax bills — something Trump is also believed to have done, based on a leaked 1995 return declaring a
There have been periodic attempts to plug real-estate-specific tax loopholes. In fact, Trump personally testified before
More recently, as president, Trump has worked diligently to either preserve or multiply other tax breaks his family has benefited from.
For instance, the
The
And, of course, two months later, Trump signed an enormous tax overhaul that will save dynastic families such as his even more money by cutting income tax rates, doubling the exemption for the estate tax and, at the last minute, even adding a special new tax break for (you guessed it!) real estate investors.
Ours is a tax code that largely operates on the honor system. If high-profile people don’t behave honorably — by cheating, by axing the cops who could catch the cheating and by rigging the tax code further in their favor so that cheating becomes a little less necessary — that entire honor system will deteriorate. No one, not even Leona Helmsley’s “little people,” wants to be the only sucker left still paying their tax bills honestly.
Catherine Rampell’s email address is [email protected]. Follow her on Twitter, @crampell.
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