NYT Expose on Trump Family Tax Avoidance Demonstrates There’s a Different Set of Rules for the Rich and Powerful
news releaseFollowing is a statement by Alan Essig, executive director of the Institute on Taxation and Economic Policy, regarding an expose in today’s New York Times that reveals Donald Trump’s family engaged in complex schemes to avoid taxes.
“The key takeaway from the New York Times article on Donald Trump’s family’s tax shenanigans is that the wealthy and powerful abide by a different set of rules than the rest of us. Not only does the tax system allow the wealthy to take advantage of legal loopholes, it also allows them to blur the line between legal avoidance and illegal tax evasion with little consequence.
“During his presidential campaign, President Trump called for closing the types of loopholes that allow some wealthy people to get ‘away with murder’ on taxes, yet his most significant legislative achievement, the Tax Cuts and Jobs Act, created a slew of new loopholes and amounted to a massive tax cut for the wealthiest Americans. Given the lengths at which Trump and his family went to avoid taxes, it is not surprising to see these values reflected in his tax legislation. For example, Trump’s disdain for the estate tax characterized in the article helps explain why the Tax Cuts and Jobs Act doubled the estate tax exemption from $11 million to $22 million.
“Much of the avoidance and alleged evasion that Trump participated in shows the need for increased IRS enforcement and audits. But in recent years, Congress has cut IRS funding. In fact, another recent article in the New York Times found that the audit rate of tax returns has dropped 42 percent since budget cuts began at the beginning of this decade. Lax enforcement due to inadequate funding clearly will benefit those who are participating in the kinds of tax dodging schemes outlined in the New York Times article.
“This article is not the first detailing Trump’s extensive use of tax shelters and avoidance techniques. We know this President took advantage of aggressive tax loopholes related to his real estate deals that we described in our report “How True Tax Reform Would Eliminate Breaks for Real Estate Investors Like Donald Trump.” As we have also explained, in the 1990s Trump even spoke out against the very concept of tax reform and in favor of tax shelters.
“While the tax maneuvers taken by Trump and his family are deeply disturbing and extreme, they unfortunately are not unique. Wealthy Americans should not be able to play by a different set of rules and avoid or evade their fair share of taxes. We need to reform the tax system to close the loopholes the wealthy use to avoid taxes and substantially increase funding to the IRS to ensure that the laws we do have are robustly enforced. “