Republican Presidential candidate and businessman Donald Trump claimed a $916 million loss on his 1995 tax return, which allowed him to avoid paying federal income tax on his businesses for at least 18 years.
The enormous tax benefit came from failed business ventures, including three Atlantic City casino bankruptcies, a failed airline business and the untimely purchase of Manhattan’s Plaza Hotel.
According to Sam Heinrich, associate professor of business at John Brown University, Trump’s actions were legal and could be considered a strategic business venture.
“For businesses to be successful and for them to reduce cost as much as they possibly can, it would be prudent to take advantage of any legal tax methods or shelters that they have available to them,” Heinrich said.
According to Heinrich, federal corporate tax returns in big business may show huge losses, carring a large operating loss forward into future years. By doing this, the company would report the lost tax returns in future years and avoid paying taxes. Unless Trump cheated on his taxes, claimed expenses to which he wasn’t entitled or didn’t report income, his actions were legal.
Heinrich believes that the media is taking advantage of this situation as a political ploy, implying that Trump either cheated or is unsuccessful as a businessman. The final stage of elections, Heinrich says, is when a candidate will start using whatever they can against their opponent.
“To people who don’t understand taxes, I think it’s an attack that implies some ethical misdealing on his part, as well as raising the question about whether he’s been successful as a business person,” Heinrich said.
“Trump is an opportunist,” Heinrich said. “It’s hard to reconcile some things about Trump. I believe that he sincerely wants to make a difference, but he’s a very self-centered individual that has a lot of pride and arrogance in who he is.”
Elijah Banks, a sophomore accounting student, agrees that not paying taxes in big business is a normal business venture. “Corporate taxes are really different than just normal income taxes and especially when you are taking massive losses, thing get really different,” Banks said. “And also when you are working with billions of people’s jobs on the line, you have very different motives for doing things,” referring to Trump’s withholding of his taxes.
For a while, Trump refused to release the details of his tax return to the public, an unusual act for presidential candidate. On this, Trump told ABC News, “As far as my taxes are concerned, the only people that care are the press, I will tell you. And even to the press, I’ll tell you, it’s not a big deal. I don’t think people care.”
“It’s interesting that we are living in a county where paying taxes seems to be considered a prerequisite in some regard for holding political office,” Heinrich said.
Trump’s many businesses ventures may have granted Trump major tax breaks over twenty years