Let me start with an apology — I am posting a heck of a lot today. Not having a job, and being a bit medically restricted right now, I have a lot of time on my hands. And I keep coming across things that I think would interest this community, yet no one else has at yet posted about them.
note — I somehow missed this post by Walter Einenkel which also cover this topic, perhaps because I was looking for Eichenwald’s name in the title. Sorry. We take slightly different approaches, so I will leave this up, even as I urge you to go read and support his.
As a result of following Eichenwald on Twitter, I encountered this tweet:
xWhy won't Trump release his tax records? Based on the ones I have now, its cause they show he's a lousy businessman. https://t.co/ekggS2FOla
— Kurt Eichenwald (@kurteichenwald) October 5, 2016which led to the article cited, which is chock full of details, that when examined carefully, destroy the notion of Trump being a successful businessman. Rather, he was reckless on a personal and professional level, and got himself bailed out repeatedly.
As I read, and as I thought back, I wonder if in fact when Trump took New York City tax breaks in theory available only to those with a limited amount of income, he actually may have been entitled, because he had no income, he was living on debt.
Eichenwald’s piece begins like this:
It wasn’t just 1995.
Five years of tax information from the 1970s that Donald Trump provided to the New Jersey Department of Law and Public Safety show mismanagement and losses that could have pushed him into personal bankruptcy—but for the largesse of his Dad.
After discussing how Trump and surrogates have tried to push back against the revelations in The New York Times about what was shown in his 1995 tax returns for the IRS, Connecticut, and New York, Eichenwald tells us
Trump flopped long before his casino bankruptcies, causing huge losses that wiped out his tax obligations. And the primary way he avoided bankruptcy those times was not through any personal skill, but because of an accident of birth—his wealthy father, who set him up in business, bailed Trump out.
There is more information available than most people — and apparently most journalists — realize. Eichenwald puts it together:
All of the tax information that has been publicly revealed—The Washington Post published figures for 1978 and 1979 in May, Politico reported in June he had paid no taxes in 1991 and 1993, The New York Times published 1995 information last week and further information from the 1970s show the same thing: Trump paying little or no taxes because of poor financial performance and huge mistakes he made in his business. Trump has steadfastly refused to release any tax returns on his own, but the headline numbers for the eight years of financial returns that have now been disclosed demonstrate that Trump’s self-celebrated business genius is a pose.
Eichenwald then turns to records in 1980 and 1981 as part of an attempt to gain a New Jersey gaming license. He ties that together timing wise with the opening of Trump’s NY Grand Hyatt on the site of the old Commodore Hotel in NYC, where his father Fred had both guaranteed the construction loan for the project, and obtained for Donald a PERSONAL $35 million line of credit, about which Eichenwald writes
In one more bit of evidence that the wealthy are not like you and me, the bank gave Trump the loan without even requiring a written agreement.
The next paragraph is key, because it gives us an absolute window into the mindset of Donald John Trump, whom I think is clear has realistically never been fully held accountable for anything in his life. As we learn more and more about him, the pattern is obvious.
But Trump was unable to control his spending. He loaded himself up with debt from the credit line in an apparent belief that he could make enough money through other deals and investments to cover the interest payments. This was the same logic that led him to assume billions of dollars in borrowings during the late 1980s for the casinos, the almost incomprehensible business decision that led to their bankruptcies that played out for more than a decade.
As you continue to read, you will shake your head as you learn that as Trump suffered ever greater losses, his real income was negligible:
He reported $76,210 in income to the Internal Revenue Service for 1975; $24,594 in 1976; and $118,530 in 1977. In other words, his losses in 1978 totaled almost twice his combined income from 1975 through 1977. His 1979 losses were 15 times his combined income for those three years.
You will, as you continue to read, discover that what kept Trump afloat were among other things loans from his father and from a family corporation at no interest with no fixed date to repay. Somehow he did not even have to report that lack of interest as income equivalent. In other words, because his family was rich he was able to operate under rules fundamentally different than those that apply to the rest of us.
I will push fair use and end with Eichenwald’s final paragraph, then encourage you to go read the entire piece:
The bottom line—no pun intended—is this: Trump is not a self-made man. He is a self-made disaster who only avoided personal bankruptcy thanks to his father being there to clean up his messes. In other words, if Trump really was the businessman he pretends to be—an executive who made it on his own through sheer grit and determination, rather than through his family’s ability to bail him out—today he would not be the Republican nominee for president, but instead just another forgotten footnote in the annals of New York real estate development.
We could only wish . . .
I fear, however, that the understanding that this — and the other recent pieces written by Eichenwald — should inform our political discourse, other than appearances by Eichenwald on MS-NBC it is likely to be largely passed over.
But at least we will know.