First, a parable:
Mr. Joe HighRoller is a successful business executive whose one vice is gambling. One year, his boss awards him with a hundred thousand dollar bonus for closing a major deal. When he gets his bonus check, it is exactly $50,000 after all taxes have been withheld.
So he takes the $50k and goes to his favorite casino for a five day gambling binge. He knows that any WINNINGS will be taxable, and is prepared to pay them, as required.
On Day One he loses $40k.
On Day Two he wins back $10k. Same on day three, four, and five.
On days 2,3,4, and 5, the cashier reminds him that he will have to pay taxes on those winnings of $10k perday.
But of course he doesn't have to pay any taxes on the "winnings" of $40k over days 2-5. He hasn't won anything; he has merely recovered his initial losses, and he walks away having no net winnings, and no tax liability.
ENTER DONALD TRUMP. All of his assets - real estate, stock, bonds, interests in ventures, etc) are NET OF TAXES. They have all been accumulated with funds on which taxes have been levied, whether they be inheritance, estate, income, or gains taxes. his entire net worth is net after taxes.
So in one particularly bad year, he begins a huge but disastrous development project. He acquires property, spends money on it, hires consultants and lawyers, only to find out that the development cannot be built due to some EPA mandate (or whatever). It is a huge, $100 million write-off.
So he pays no taxes in that year. He has a net loss of, say $80 million.
In the following three years, he has net earnings of $20 million in each tax year.
But in logic, and in the eyes of Congress and the Internal Revenue Code, he doesn't really have any taxable income in those following years, because he is still recovering the losses in the one disastrous year. Once he has fully recovered those losses, his net income will again be taxable, but for some number of years, even though he was "making a lot of money" he had no obligation to pay any income taxes, because those earnings were simply a recovery of prior losses.
Hey Lefties, are you still anxiously awaiting The Donald's tax returns?
Mr. Joe HighRoller is a successful business executive whose one vice is gambling. One year, his boss awards him with a hundred thousand dollar bonus for closing a major deal. When he gets his bonus check, it is exactly $50,000 after all taxes have been withheld.
So he takes the $50k and goes to his favorite casino for a five day gambling binge. He knows that any WINNINGS will be taxable, and is prepared to pay them, as required.
On Day One he loses $40k.
On Day Two he wins back $10k. Same on day three, four, and five.
On days 2,3,4, and 5, the cashier reminds him that he will have to pay taxes on those winnings of $10k perday.
But of course he doesn't have to pay any taxes on the "winnings" of $40k over days 2-5. He hasn't won anything; he has merely recovered his initial losses, and he walks away having no net winnings, and no tax liability.
ENTER DONALD TRUMP. All of his assets - real estate, stock, bonds, interests in ventures, etc) are NET OF TAXES. They have all been accumulated with funds on which taxes have been levied, whether they be inheritance, estate, income, or gains taxes. his entire net worth is net after taxes.
So in one particularly bad year, he begins a huge but disastrous development project. He acquires property, spends money on it, hires consultants and lawyers, only to find out that the development cannot be built due to some EPA mandate (or whatever). It is a huge, $100 million write-off.
So he pays no taxes in that year. He has a net loss of, say $80 million.
In the following three years, he has net earnings of $20 million in each tax year.
But in logic, and in the eyes of Congress and the Internal Revenue Code, he doesn't really have any taxable income in those following years, because he is still recovering the losses in the one disastrous year. Once he has fully recovered those losses, his net income will again be taxable, but for some number of years, even though he was "making a lot of money" he had no obligation to pay any income taxes, because those earnings were simply a recovery of prior losses.
Hey Lefties, are you still anxiously awaiting The Donald's tax returns?
