We All Avoid Taxes
What Trump did is not particularly sinister, but also not particularly genius.
By Rich Lowry — October 4, 2016
Give Donald Trump credit for going big. When he wanted to declare a $915,729,293 loss on his 1995 tax returns, the software used by his accountant couldn’t accommodate anything higher than a seven-figure loss. The accountant had to add the first two digits, “91,” with a typewriter.
The improvisation gets to what is most noteworthy about Trump’s tax gambit, which is the sheer scale of it.
As reported by the New York Times from leaked Trump tax documents, the businessman declared the enormous loss to avoid paying federal income taxes in future years, perhaps for almost the next two decades. The report was quickly deemed a bombshell, but it didn’t reveal anything illegal or — besides the jaw-dropping number — even unusual.
The so-called net operating loss carryforward that Trump took advantage of is not an exotic loophole in the tax code. Many industrialized countries have similar provisions. In 2014, more than a million taxpayers declared net operating losses. The provision simply reflects that if you, say, lose $100,000 setting up a business and earn $50,000 the next year, it makes no sense for the government to tax the $50,000 as if it were the only part of the equation; the loss should be accounted for, too.
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