Trump’s tax returns and the parasitism of the financial oligarchy
29 September 2020
The detailed analysis of the tax returns of President Donald Trump, spread across the front page of Monday’s New York Times, is more than an exposure of the corrupt gangster who lives in the White House. It is an indictment of the American ruling class as a whole, of the super-rich families who monopolize the country’s wealth, exploit the working people and dominate its politics, including the Democratic and the Republican parties.
The Times gained access to 20 years of personal and business tax returns that provide exhaustive details about the financial manipulations conducted by the Trump Organization. The family holding company used hundreds of subsidiaries and shell companies to evade the payment of taxes, incur paper losses that were used to offset real income, and ensure the never-ending enrichment of Trump and his children despite the fact that their empire of real estate, casinos and golf clubs was largely unprofitable.
President Donald Trump speaking during a news conference at the White House, Sunday, Sept. 27, 2020, in Washington. (AP Photo/Carolyn Kaster)As the report declared, “ultimately, Mr. Trump has been more successful playing a business mogul than being one in real life.” His long-running NBC reality program, The Apprentice, was far more profitable than his actual business activities. His bankruptcies and reverses have long been known, but the Times account gives a picture, in granular detail, of how the tax system—set up and run by both Democratic and Republican administrations—allowed him to amass and maintain great wealth despite his generally disastrous forays in business.
The Times account does add another dimension to the explanation of the response of the Trump administration to the coronavirus crisis. Given his vast holdings in real estate, hotels and golf clubs, Trump had a direct and immediate financial interest in demanding the reopening of the economy and the resumption of travel, business meetings and sporting events, regardless of the cost in human lives. In this he was not alone, but rather spoke for the interests of his class.
The details in the newspaper account—that Trump paid zero income taxes in 10 of the 15 years before he ran for president; paid $750 in income taxes in 2016 and 2017, about the same amount as a waitress working at the minimum wage; wrote off $75,000 in haircuts as a business expense; and steered hundreds of thousands in “consulting fees” into the pockets of his adult children—are damning. But it is hardly surprising to see it proven in black and white that Donald Trump is a phony and a fraud. Millions of working people have long recognized him as an unscrupulous swindler in both business and politics.
Two years ago, the Times published an equally detailed examination of how Trump’s father manipulated the tax system to pass on the bulk of his wealth to his son Donald while paying an effective tax rate of only 10 percent, even though the official estate tax was then 55 percent. The WSWS commented at the time, “With its detailed exposure of the Trump fortune, the Times has unwittingly confirmed the insistence of socialists that the continued existence of a parasitic oligarchy is incompatible with the most basic social and democratic rights of the vast majority of the population.”
Corruption and tax evasion, perhaps less crude but in some cases on an even larger scale, are commonplace throughout the American ruling elite. According to IRS figures, the effective tax rate on the transfer of inherited wealth is less than 4 percent, compared to the average tax rate for working people of 18–19 percent. Decades ago, before her conviction for tax evasion, Manhattan hotel heiress Leona Helmsley sneered, “Only the little people pay taxes.” That serves today as the motto of the entire financial aristocracy.
Everyone knows that the IRS makes it a point to prey upon workers. Woe unto the teacher or auto worker who is accused of underpaying the IRS, even as the agency regularly turns a blind eye to massive tax-avoidance schemes like those run by the Trump family. Economists Emmanuel Saez and Gabriel Zucman have described how, for decades, the US government continuously slashed taxes for the wealthy and destroyed enforcement mechanisms, with the deliberate outcome of expanding social inequality.
At least until he launched his campaign for the Republican presidential nomination in 2015, Trump bribed Democrats and Republicans alike with “campaign contributions” and was rewarded with loopholes such as the favored treatment of real estate losses in the Obama administration bailout of Wall Street in 2009.A central aspect of Trump’s financial flim-flam over many decades is that he has taken advantage of tax laws enacted by both Democrats and Republicans for the deliberate purpose of enabling such chicanery and minimizing the tax burden on the financial elite. It was under the Obama administration in 2010 that the IRS authorized a payment of $72.9 million to Trump, supposedly as a refund of “overpayments.”
Among the politicians benefiting from Trump’s largesse over the years were Joe Biden and Kamala Harris, his current opponents. He gave campaign contributions on 17 occasions to the two New York Democratic senators, Charles Schumer, now the Senate Democratic leader, and Hillary Clinton, Trump’s opponent in the 2016 presidential contest. None of this politically inconvenient history appears in the Times account of Trump’s tax evasion.
Apologists for the Democratic Party, particularly in the camp of the Democratic Socialists of America (DSA), may see the Times article as a brilliantly timed masterstroke. They no doubt hope that the conclusive exposure of Trump as a corrupt fraud—unlike the release of the sex scandal transcripts in 2016—will succeed in sinking his campaign.
It is possible that the exposure of Trump’s blatant tax evasion will cost him some votes. But this exposure does not change the reactionary character of the Biden campaign.
A central feature of this campaign is the suggestion that Trump is an agent or patsy of Russian President Vladimir Putin, and that his administration has undermined US “national security” interests in the Middle East, Central Asia, and more generally, in relation to both Russia and China. Many media commentators immediately seized on the fact that Trump paid far more taxes to foreign governments, including India, the Philippines, Turkey and Panama, than he did to the US government.
House Speaker Nancy Pelosi, one of the most vociferous advocates of the anti-Russia campaign, was quick to sound this theme again in response to the publication of the details of Trump’s taxes and personal finances. Noting the Times’ conclusion that Trump had accumulated $400 million in losses since taking office, including $300 million in loans that would come due during a second term in the White House if he should be reelected, she declared that Trump’s taxes revealed a “national security issue.”
Even though the Times admitted that the tax returns showed no business income from Russia, Pelosi connected Trump to Moscow: “The question is what does Putin have on the president politically, personally, financially in every way that the president would try to undermine our commitment to NATO, give away the store to Russia and Syria … he says he likes Putin and Putin likes him. Well, what’s the connection? We’ll see.”
Such grotesque McCarthy-style attacks on Trump’s alleged master in Moscow contribute to a political atmosphere justifying an explosion of American militarism. It moreover simply ignores the equal role of American banks in financing Trump’s swindles.
Moreover, the use of a scandal to unseat Trump—assuming that this is the outcome—does nothing to change the political climate in the United States. With or without Trump, the intensification of the social crisis—for which the Democrats have no answer—will provide fuel for the development of fascist and authoritarian movements.
It is impossible to defend democratic rights and defeat Trump’s drive towards authoritarian rule through the Democratic Party, which defends the capitalist system of which Trump is a product.
Trump’s tax returns paint a portrait of a ruling class totally enmeshed in corruption and criminality. The oligarchs generate their wealth through shuffling around money, based on the provision of endless amounts of cash by the central banks. Trump’s gaudy and tasteless palaces, with the look of bordellos, are the product of a whole period of American capitalism dominated by swindling, speculation and fraud, creating nothing of value besides ever-greater heaps of debt.
Trump is not the exception; he is the rule. The entire ruling class owes its social existence to various forms of criminal activity, whose victims are inevitably workers. The expropriation of this financial oligarchy is an urgent social necessity.
Trump’s Tax Returns Show Lying Is His Only Marketable Skill
The revelations about Donald Trump’s finances obtained by the New York Times have produced two distinct reactions. One is that he’s a terrible, failing businessman, and the other is that he’s a tax cheat. Seen in one light, the two interpretations are in tension. “The reporters can’t seem to decide if Mr. Trump is a shark exploiting the White House for personal gain or a sap who is bleeding cash while in office,” argues a Wall Street Journal editorial. “Brilliant or bumpkin? Make up your mind.”
But there is a different way to think about Trump’s career, which is that he is a brilliant con man, who has, throughout his career in business and politics alike, honed the singular skill of identifying marks and exploiting them with spectacular lies.
The new Times scoops merely flesh out the story that emerged in its revelatory 2018 report, which we now know came about with the cooperation of his niece, Mary Trump. That story reconstructs the creation of Trump’s image from the beginning. It is one of the most successful cons — and almost surely the most historically significant — in American history. For reasons I’ve never understood, its implications have not been absorbed.
In the mid-1970s, the Trump family set out to sell the world on a character of its own creation: Donald J. Trump, dashing and brilliant business genius. The story’s protagonist was the child of multimillionaire developer Fred Trump, a son who had accomplished almost nothing in business, and whose taxable income was under $25,000. The trick was quite simple: young Donald would squire reporters around his father’s business empire and claim he had built it himself.
In 1976, the Times produced a profile ushering the young star onto the stage. “He rides around town in a chauffeured silver Cadillac with his initials, DJT, on the plates,” gushed a profile. “He dates slinky fashion models, belongs to the most elegant clubs and, at only 30 years of age, estimates that he is worth ‘more than $200 million.’”
In reality, Donald Trump was in the money-inheriting business. In 2018, the Times revealed to its readers that this entire profile was a “spectacular con.” Forty-two years earlier, Trump had carefully taken the Times reporter through a Potemkin village of his father’s wealth:
In the chauffeured Cadillac, Donald Trump took the Times reporter on a tour of what he called his “jobs.” He told her about the Manhattan hotel he planned to convert into a Grand Hyatt (his father guaranteed the construction loan), and the Hudson River railroad yards he planned to develop (the rights were purchased by his father’s company). He showed her “our philanthropic endeavor,” the high-rise for the elderly in East Orange (bankrolled by his father); an apartment complex on Staten Island (owned by his father); their “flagship,” Trump Village, in Brooklyn (owned by his father); and finally, Beach Haven Apartments (owned by his father). Even the Cadillac was leased by his father.
The strategy was to convert Fred Trump’s fortune into publicity, which Donald could then monetize. The lies used to construct Trump’s image were massive. In 1984, Donald concocted a series of lies to persuade Forbes he was worth $900 million. Its reporter, Jonathan Greenberg, diligently unraveled every exaggeration and reduced the published sum to $100 million, only to discover decades later that the actual amount was a mere $5 million. The power of the lie was its scale. Greenberg could imagine Trump was exaggerating his wealth tenfold, but the idea he was exaggerating it 180-fold beggared imagination.
Trump’s career as a real-estate magnate failed, and he fell into bankruptcy as his father’s inheritance eventually ran dry. But as the second installment of the Times reports on his taxes shows, he revived his career by monetizing the publicity he had so carefully seeded. He developed a brand as a television star portraying a business genius. He lent his name to a dizzying array of products, from detergent to double-stuff Oreos. The image had become the business itself.
While Donald was never able to equal his father’s prowess as a builder and landlord, his talent as a confidence man far surpassed it. Trump leveraged his fame into a series of scams: “Trump University” (a fake real-estate-training seminar designed to bleed its victims dry); the “Trump Network” (selling its targets urine-testing systems, which would be used to direct them to buy overpriced vitamins); using the “Trump Foundation” as a racket to funnel supposedly charitable funds into his pocket, and so on.
At times, these scams have edged close to outright criminality. At other times, they have crossed over the line. Trump is currently under investigation for tax fraud. And, as law professor and tax expert Daniel Shaviro argues, the information in Trump’s recent returns strongly suggests more outright fraud — deductions like hairstyling and a country estate seem to violate black-letter rules governing tax deductions.
The arc of Trump’s career has been to exploit a series of victims, pocket his winnings, and use them to find new ones. He lied to a series of reporters, built and sold an image as a brilliant deal-maker, scammed his fans out of their money, and lied to the government about his income.
Trump’s political career is a natural step in the progression, one he had been contemplating for decades. The Republican Party was a perfect vehicle for a character like Trump. The mainstream media had grown steadily more resistant to his lies, but the conservative media ecosystem was fertile terrain, a propaganda machine so attuned to his needs that he didn’t even need to try to fool them. Whatever lies other Republicans would spout about Barack Obama or climate change or the wonder-working powers of tax cuts, Trump would exceed them. From Fox News to Hugh Hewitt to the anti-anti-Trumpers, his acolytes simply did not care whether anything he said was true.
Trump (or, more precisely, his ghostwriter) once claimed, “Deals are my art form. Other people paint beautifully or write poetry. I like making deals, preferably big deals.” The last four years have made it apparent Trump is bad at striking deals, despite being free of the burden of having principles. Deals are not his art form.
Lying is. Lying is how he rebuilt his fortune after he ran through his inheritance, and how he kept his head above water financially. Lying may or may not be enough to get him a second term, or even to keep him out of prison. But if you are betting that Trump’s lies will stop working, you are betting against the evidence of his entire adult life.
Trump is not the exception; he is the rule. The entire
ruling class owes its social existence to various forms of criminal activity,
whose victims are inevitably workers. The expropriation of this financial
oligarchy is an urgent social necessity.
Trump’s tax returns and the parasitism of the
financial oligarchy
29 September 2020
The detailed analysis
of the tax returns of President Donald Trump, spread across the front page of
Monday’s New York Times, is more than an exposure of the corrupt
gangster who lives in the White House. It is an indictment of the American ruling
class as a whole, of the super-rich families who monopolize the country’s
wealth, exploit the working people and dominate its politics, including the
Democratic and the Republican parties.
The Times gained
access to 20 years of personal and business tax returns that provide exhaustive
details about the financial manipulations conducted by the Trump Organization. The
family holding company used hundreds of subsidiaries and shell companies to
evade the payment of taxes, incur paper losses that were used to offset real
income, and ensure the never-ending enrichment of Trump and his children
despite the fact that their empire of real estate, casinos and golf clubs was
largely unprofitable.
As the report declared, “ultimately, Mr.
Trump has been more successful playing a business mogul than being one in real
life.” His long-running NBC reality program, The Apprentice, was
far more profitable than his actual business activities. His bankruptcies and
reverses have long been known, but the Times account gives a
picture, in granular detail, of how the tax system—set up and run by both
Democratic and Republican administrations—allowed him to amass and maintain
great wealth despite his generally disastrous forays in business.
The Times account
does add another dimension to the explanation of the response of the Trump
administration to the coronavirus crisis. Given his vast holdings in real
estate, hotels and golf clubs, Trump had a direct and immediate financial
interest in demanding the reopening of the economy and the resumption of
travel, business meetings and sporting events, regardless of the cost in human
lives. In this he was not alone, but rather spoke for the interests of his
class.
The details in the newspaper account—that Trump paid zero
income taxes in 10 of the 15 years before he ran for president; paid $750 in
income taxes in 2016 and 2017, about the same amount as a waitress working at
the minimum wage; wrote off $75,000 in haircuts as a business expense; and
steered hundreds of thousands in “consulting fees” into the pockets of his
adult children—are damning. But it is hardly surprising to see it proven in
black and white that Donald Trump is a phony and a fraud. Millions of working
people have long recognized him as an unscrupulous swindler in both business
and politics.
Two years ago, the Times published
an equally detailed examination of how Trump’s father manipulated the tax
system to pass on the bulk of his wealth to his son Donald while paying an
effective tax rate of only 10 percent, even though the official estate tax was
then 55 percent. “With its detailed exposure of the Trump fortune, the Times has
unwittingly confirmed the insistence of socialists that the continued existence
of a parasitic oligarchy is incompatible with the most basic social and
democratic rights of the vast majority of the population.”
Corruption and tax evasion, perhaps less crude but in some
cases on an even larger scale, are commonplace throughout the American ruling
elite. According to IRS figures, the effective tax rate on the transfer of
inherited wealth is less than 4 percent, compared to the average tax rate for
working people of 18–19 percent. Decades ago, before her conviction for tax
evasion, Manhattan hotel heiress Leona Helmsley sneered, “Only the little
people pay taxes.” That serves today as the motto of the entire financial
aristocracy.
Everyone knows that the IRS makes it a point to prey upon
workers. Woe unto the teacher or auto worker who is accused of underpaying the
IRS, even as the agency regularly turns a blind eye to massive tax-avoidance
schemes like those run by the Trump family. Economists Emmanuel Saez and
Gabriel Zucman have described how, for decades, the US government continuously
slashed taxes for the wealthy and destroyed enforcement mechanisms, with the
deliberate outcome of expanding social inequality.
A central aspect of Trump’s financial flim-flam over many
decades is that he has taken advantage of tax laws enacted by both Democrats
and Republicans for the deliberate purpose of enabling such chicanery and
minimizing the tax burden on the financial elite. It was under the Obama
administration in 2010 that the IRS authorized a payment of $72.9 million to
Trump, supposedly as a refund of “overpayments.”
At least until he launched his campaign for the Republican
presidential nomination in 2015, Trump bribed Democrats and Republicans alike
with “campaign contributions” and was rewarded with loopholes such as the
favored treatment of real estate losses in the Obama administration bailout of
Wall Street in 2009.
Among the politicians
benefiting from Trump’s largesse over the years were Joe Biden and Kamala
Harris, his current opponents. He gave campaign contributions on 17 occasions
to the two New York Democratic senators, Charles Schumer, now the Senate
Democratic leader, and Hillary Clinton, Trump’s opponent in the 2016
presidential contest. None of this politically inconvenient history appears in
the Times account of Trump’s tax evasion.
Apologists for the Democratic Party,
particularly in the camp of the Democratic Socialists of America (DSA), may see
the Times article as a brilliantly timed masterstroke. They
no doubt hope that the conclusive exposure of Trump as a corrupt fraud—unlike
the release of the sex scandal transcripts in 2016—will succeed in sinking his
campaign.
It is possible that the exposure of Trump’s blatant tax
evasion will cost him some votes. But this exposure does not change the
reactionary character of the Biden campaign.
A central feature of this campaign is the suggestion that
Trump is an agent or patsy of Russian President Vladimir Putin, and that his
administration has undermined US “national security” interests in the Middle
East, Central Asia, and more generally, in relation to both Russia and China.
Many media commentators immediately seized on the fact that Trump paid far more
taxes to foreign governments, including India, the Philippines, Turkey and
Panama, than he did to the US government.
House Speaker Nancy Pelosi, one of the
most vociferous advocates of the anti-Russia campaign, was quick to sound this
theme again in response to the publication of the details of Trump’s taxes and
personal finances. Noting the Times’ conclusion that Trump
had accumulated $400 million in losses since taking office, including $300
million in loans that would come due during a second term in the White House if
he should be reelected, she declared that Trump’s taxes revealed a “national
security issue.”
Even though the Times admitted
that the tax returns showed no business income from Russia, Pelosi connected
Trump to Moscow: “The question is what does Putin have on the president
politically, personally, financially in every way that the president would try
to undermine our commitment to NATO, give away the store to Russia and Syria …
he says he likes Putin and Putin likes him. Well, what’s the connection? We’ll
see.”
Such grotesque McCarthy-style attacks on Trump’s alleged
master in Moscow contribute to a political atmosphere justifying an explosion
of American militarism. It moreover simply ignores the equal role of American
banks in financing Trump’s swindles.
Moreover, the use of a scandal to unseat Trump—assuming
that this is the outcome—does nothing to change the political climate in the
United States. With or without Trump, the intensification of the social
crisis—for which the Democrats have no answer—will provide fuel for the
development of fascist and authoritarian movements.
It is impossible to defend democratic rights and defeat Trump’s
drive towards authoritarian rule through the Democratic Party, which defends
the capitalist system of which Trump is a product.
Trump’s tax returns paint a portrait of a ruling class
totally enmeshed in corruption and criminality. The oligarchs generate their
wealth through shuffling around money, based on the provision of endless
amounts of cash by the central banks. Trump’s gaudy and tasteless palaces, with
the look of bordellos, are the product of a whole period of American capitalism
dominated by swindling, speculation and fraud, creating nothing of value
besides ever-greater heaps of debt.
Trump is not the exception; he is the rule. The entire
ruling class owes its social existence to various forms of criminal activity,
whose victims are inevitably workers. The expropriation of this financial
oligarchy is an urgent social necessity.
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