Here's what I think really happened with Trump's tax returns.

Trump made enough money doing the Apprentice to cover his losses from mostly bad real estate deals in the 2000s-2010s. Essentially, he’s much better at playing a real estate mogul on TV than actually being a real estate mogul. This tells you everything you need to know about him.

OK, aside from that, here’s my take on the NYT article on Trump’s tax returns.

IMHO “he paid $750 in taxes most years” is not the real story. Most people know that wealthy individuals can take advantage of tax law to pay a lower tax rate than people in middle class to upper middle class income brackets pay. There are plenty of options for carrying losses forward and even back in time, and that allows people with sizeable investments or business operations to drop their taxable income to near-zero on certain years for tax purposes.

In general tax law is likely a major contributor to rising inequality in the US. Having a lot of people saying “I paid more in taxes than Trump did” isn’t exactly right, but it does point at a real issue and sometimes it’s the flawed simplistic messages that reach the widest audience. Perhaps this acts as a tipping point for rising outrage at systemic inequality, and prompts a real national conversation on this topic. Or perhaps it won’t.

I also don’t think the giant loans (about $300m worth) hanging over his head are a big deal. His net worth is not publicly available but is estimated to be about $2B-$2.5B. Thus he’s not grasping at the edge of bankruptcy. OTOH he’s not exactly a business genius as he inherited over $400m from his father and could have made somewhat more money by just putting his inheritance into the S&P 500.

Here’s where I think the story is:

Trump is taking in millions of dollars per month via likely bribes and direct theft from government coffers. Business has been way up in his high-profile hotels and other properties such as his Washington DC hotel and Mar-A-Lago since the election. It’s well known that special interest groups looking for favorable outcomes will make sure to stay at his properties. He also extensively uses properties he owns for government business, raking in the revenue for himself. Some of this was public already, but this provides further evidence of the scale of the corruption.
I’m not a tax attorney, but it does sound like he’s done a number of things on his taxes that lie on a continuum between “totally legal tax loophole found by a great tax attorney” and “not legal at all”. The IRS does have an ongoing ~$70m lawsuit against him with regard to underpayment of taxes, so that’s at least one bit of evidence that it might be closer to the latter. As one example of a dodgy technique, he paid very large “consulting fees” to various individuals that likely include family members and then deducted them as business expenses.

While people are paying attention to this, I think the shady dealings that Jared Kushner (and by extension, Ivanka) have been up to are an order of magnitude worse than the tax story, and they get very little press coverage. For example: Kushner’s family business lost hundreds of millions on a single bad real estate deal in 2007, and has been trying to cover the losses ever since. At one point during Trump’s presidency Kushner Co pitched the Qatari sovereign wealth fund on bailing them (the Kushner family business) out. Qatar said no, and then shortly thereafter the US made the surprising move of supporting a Saudi-led blockade of Qatar. Later Qatar did invest in bailing Kushner’s company out via another fund they’re involved in, and then the US subsequently changed their stance on the blockade. The causal links might be coincidental, but using the US state apparatus as a financial blackmail tool for personal gain should be seen as straight-up treason.

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