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March 23rd, 2017

Insight

Trump, Taxes and Liberal Hypocrisy

Larry Elder

By Larry Elder

Published Oct. 6, 2016

Let's describe the relationship of the media and their Democratic cohorts to taxes and those who "don't pay them" as, well, complicated.

In 2012, ABC News' Jonathan Karl claimed on television that an auto mechanic making $75,000 a year paid a higher federal income tax rate than that paid by then-Republican presidential nominee Mitt Romney. But, as I later told Karl in a radio interview, that would only be true if Mr. Auto Mechanic had no children, owned no home and therefore did not take the same deductions as those taken by Romney. In an apples-to-apples comparison, I informed him, Romney, at a 14 percent rate, pays twice the rate paid by Mr. Mechanic.

Karl said he would look into that, and get back to me. He must've used Hillary Clinton's email server, because I never heard back.

Democrat's 2004 presidential nominee, John Kerry, through marriage, is also a wealthy man. A few years ago, he bought a 76-foot yacht, but docked it in nearby Rhode Island, rather than Massachusetts where he lived and presumably used the yacht. It turns out by doing so he could avoid $500,000 in sales and excise taxes. Embarrassed by a media expose, he later paid up.

In 2001, Kerry's state of Massachusetts lowered its income tax rate. If, however, the guilty Bay State liberals wanted to pay the higher rate — so as not to deprive schools, hospitals and all — they could check a box and do so. Out of over 3 million tax filers, only a fraction of 1 percent (930 taxpayers) voluntarily agreed to pay the old, higher rate. Not among that fraction of 1 percent was then-Rep. Barney Frank, D-Mass., who once said, "There are a lot of very rich people out there whom we can tax." When asked about the apparent contradiction, Frank said, "I don't trust the (Republican-led state) government to spend the money properly."

The late Sen. Ted Kennedy, D-Mass., cast many votes opposing decreases in the estate tax. But his father, Joe Kennedy, placed his family's fortune in trusts to avoid paying the very estate tax that his son later advocated during his Senate career. The late Democratic tax-the-rich Ohio Sen. Howard Metzenbaum relocated to Florida upon retirement, a move reportedly made so that upon death he would avoid state estate taxes. Based on where he was when he died, mission accomplished.


Then there are the tax-the-rich hosts at cable news channels, with the list led by MSNBC's Rev. Al Sharpton, whose endorsement was vigorously pursued by Hillary Clinton, even though she criticizes Donald Trump for having "paid nothing in federal taxes." Sharpton, according to The New York Times in 2014, owes "more than $4.5 million in current state and federal tax."

It was The New York Times that dropped the "bombshell" that for years Donald Trump "paid no federal income taxes." This would be the same New York Times that, in 2014 — and who knows what other years — paid zero federal income taxes.

Donald Trump is a rich businessman. Business people typically do not become rich by willingly pay more in taxes than they believe they owe. He took legal deductions, apparently using losses and his casino businesses to offset his income taxes. Perfectly legal, nothing to see here.

Trump does pay taxes — a lot of them. He pays payroll taxes, property taxes, excise taxes, sales taxes, local taxes and whatever fees imposed by the various states in which he does business. And as for his claim that he's undergoing an audit and therefore does not want to release returns? The explanation is simple, if not clear to people who don't run a complicated business.

Trump and the IRS are very likely in disagreement over how much he owes and how the tax code should be interpreted to come up with the correct amount. Trump, who says he gets audited every year, probably has these disagreements every year. If he were to disclose his returns, and the public became aware of the amount the IRS says he owes versus the amount he thinks he does, the IRS will be publicly shamed into digging in its heels, refusing to negotiate lest they be perceived as caving in to a rich guy. In short, Trump would lose his leverage and very likely millions of dollars in taxes. What sane person does that?

Warren Buffett, who claimed he paid a lower tax rate then did his secretary, disputed what the IRS claimed one of his companies owed. Given that Buffett famously wants income taxes raised, why doesn't he simply accede to the IRS' request, pay the money voluntarily and increase the federal treasury? By the way, while we're at it, has anybody seen Buffett's returns and those of his secretary to confirm his assertion that he pays a lower tax rate than she does?

But then, neither Buffett, nor, we presume, his secretary, is a Republican. Different strokes for different folks.

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Larry Elder is a best-selling author and radio talk-show host.

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