Taxes

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  • Fox & Friends Defends Trump’s Infeasible “Trickle-Down” Tax Plan

    Fox Staunchly Defending Myth That Tax Cuts Create Economic Growth

    Blog ››› ››› ALEX MORASH

    Fox & Friends attempted to defend Republican nominee Donald Trump's budget-busting tax plan by pushing the discredited claim that his proposed tax cuts for the rich and for corporations would stimulate economic growth.

    On October 11, Fox & Friends was joined by Fox Business host Stuart Varney to discuss Trump’s tax cuts, which, according to Varney, will “get 4 percent growth within a couple of years.” After Fox & Friends co-host Brian Kilmeade pressed Varney about criticism of how much additional debt would be incurred under Trump’s “trickle-down” tax plan, Varney admitted it would “initially” increase federal deficit before speculating that, “over the longer term, the deficit, I think, comes down.” Varney also claimed Trump’s plan “is cutting taxes across the board” -- failing to mention that his cuts overwhelmingly benefit the top 1 percent of taxpayers, with almost nothing for working- and middle-class Americans. From the October 11 edition of Fox News’ Fox & Friends:

    Fox & Friends has hosted Varney before to push Trump’s “trickle-down” economic policies; on September 28, the show invited Varney to defend Trump’s tax cuts for the rich. He decried Clinton’s assertion at the September 26 presidential debate that Trump’s tax cuts are "Trumped-up trickle-down economics" and claimed Trump’s huge tax cut for the wealthiest of Americans is “how we grow the economy.” Varney continued his defense of Trump’s economic policies on his Fox Business program Varney & Co. later that morning, claiming that, economically speaking, “we are in a mess [and] the only way out is to stimulate private enterprise by tax cuts.”

    Fox’s desperate attempt to shore up Trump’s right-wing tax policy comes after economists, experts, and journalists have lampooned the plan’s many flaws. During the September 15 edition of CNN’s The Lead, Moody’s chief economist Mark Zandi noted that the job creation and economic growth Trump has promised are “not feasible” without a significant increase of net immigration over the next decade, which Trump vehemently opposes. CNN global economic analyst Rana Foroohar derided Trump’s reliance on tax cuts to boost economic growth as “magical thinking,” and noted that economists now have “20 years of evidence that this sort of trickle-down theory is not working.” The idea of tax cuts as a means for creating growth has even been debunked by economists on Fox -- including on Varney’s own show. Economist Austan Goolsbee scolded Varney on the April 25 edition of Varney & Co., reminding the Fox host that cutting taxes would not increase growth and arguing instead that they would “choke off the money that you needed to make the investments that are critical to your future grow[th].”

    According to a September 2014 report from the Brookings Institution, tax cuts do not always create economic growth and can even discourage growth by undermining economic incentives to invest. A September 2012 report by the Congressional Research Service (CRS) similarly concluded that reducing top income tax rates does not correlate to increased economic growth, but lowering top rates does "appear to be associated with the increasing concentration of income at the top of the income distribution."

    Varney has attempted to rewrite history before to claim tax cuts created “gigantic” increases in revenue during previous Republican administrations, and Fox has repeatedly pushed debunked trickle-down economic claims. The fact remains that tax cuts for the wealthy guarantee only one thing: lost revenue that could be spent on vital investments that improve the lives of every American.

  • Tax Experts: Trump Surrogates’ Defense Of His Tax Avoidance Is “Silly” And “Nonsense”

    Blog ››› ››› JOE STRUPP

    After The New York Times published tax documents from 1995 revealing that Republican presidential nominee Donald Trump lost nearly a billion dollars and could as a result have avoided paying any federal income tax for “up to 18 years,” Trump and his campaign surrogates have claimed he had a “fiduciary responsibility” to reduce his personal tax liability to the smallest amount possible under law. Veteran tax law experts tell Media Matters this explanation is “silly,” “complete nonsense,” and “almost incomprehensibly incoherent.”

    In a front page Sunday article, the Times reported, “The 1995 tax records, never before disclosed, reveal the extraordinary tax benefits that Mr. Trump, the Republican presidential nominee, derived from the financial wreckage he left behind in the early 1990s through mismanagement of three Atlantic City casinos, his ill-fated foray into the airline business and his ill-timed purchase of the Plaza Hotel in Manhattan.”

    The Trump campaign issued a statement in response that said, among other things, that Trump “has a fiduciary responsibility to his business, his family and his employees to pay no more tax than legally required." Leading campaign surrogates including former New York City Mayor Rudy Giuliani have made similar claims during media appearances. Giuliani told CNN, "If you have a set of laws, you live by those laws. And the reality is, you are ignoring completely the fiduciary obligation he has to all the people around him to run his business at the lowest possible expense."

    But respected tax attorneys and others who teach tax law said this defense doesn’t pass the smell test.

    “That’s nonsense,” said Rutheford B Campbell, a corporate law professor at the University of Kentucky College of Law. “He has a fiduciary responsibility to reduce the corporation’s tax liability. … The notion that somehow he owes an obligation to the corporation to reduce his own taxes doesn’t make sense.”

    Jeff Scroggin, a tax attorney with Scroggin & Co., P.C. of Roswell, GA., agreed.

    “I don’t see that as a legitimate argument,” said Scroggin. “The only way I can see that argument working is to say he is going to take the dollars he saves and invest them back in the business and I doubt seriously he is doing that. I doubt seriously anyone is expecting him to do that, take the savings and put them back in the business.”

    He later added, “If you lose a billion dollars can you really be a successful businessman? It has to raise questions about the viability of what he’s been doing over those years.”

    Martin McMahon, co-author of law school textbook Federal Income Taxation of Individuals, said having the responsibility to pay as little corporate taxes as possible does not extend to personal taxes.

    “I’ve never heard of any legal principle that the owner of a business has an obligation to the employees of the business or the directors to minimize the owner’s personal tax liability,” McMahon said, calling it, “complete nonsense, there is absolutely no legal principle to support that.”

    Edward Kleinbard, a tax law professor at the University of Southern California Gould School of Law, echoed that view.

    “He owes no fiduciary duty to anyone else not to pay personal income tax. It is an almost incomprehensibly incoherent argument,” Kleinbard said via email. “No, it’s just plain silly. No one is under a fiduciary duty to lose nearly $1 billion of other people’s money. He made very bad investment decisions, he skirted with bankruptcy, his lenders forced him to unload several of his properties at pennies on the dollar, and as a result he claimed a $900+ million tax loss attributable to losing his lenders’ money. What’s hard about that?”

    Roberton Williams, a senior fellow at The Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution, called Trump’s claim “kind of odd.”

    “It is his own tax return, he is the one who personally benefits from it,” Williams said. “He has this other income that normally people would have to pay tax on.”

  • Morning Joe Asked For The Difference Between Clinton Speeches And Trump Taxes. Here It Is.

    Blog ››› ››› MATT GERTZ

    MSNBC’s Mika Brzezinski offered a ringing defense of Republican presidential nominee Donald Trump’s effort to avoid paying taxes on today’s Morning Joe, declaring that Democratic presidential nominee Hillary Clinton had similarly “made a lot of money” from speeches to banks and that the difference is “she hides it. Donald Trump just doesn’t hide it.” At one point she said, “What’s the difference?” and asked whether “anybody want[s] to explain [it] to me.” Here’s the difference.

    We know in excruciating detail how much Hillary and Bill Clinton were paid for giving speeches, who they gave them to, and when, because all of that information was released in federal financial disclosures Hillary Clinton has made over the years. We also have a full picture of their tax status because the Clintons have released decades of returns.

    We know remarkably little about how much Trump pays in taxes, what his income is, what types of deductions he takes, and how the amount he pays in taxes would be impacted by his tax proposals. That’s because Trump has refused to release any tax returns, breaking decades of tradition. The only reason we know that Trump took a $916 million loss in 1995 that he could have used to wipe out nearly two decades of income tax payments is because someone sent three pages from Trump’s 1995 tax records to The New York Times.

    During the same segment, co-host Joe Scarborough said, “This tax thing, I'm sorry, this tax thing, please, find me one person that pays more taxes than they have to pay. You can't do it. So everybody that's acting so shocked that he did what he was legally entitled to do is a freaking hypocrite.” In fact, the Clintons have paid more in taxes than they could have.

     

     

    Media figures frequently refuse to Clinton give credit for the voluminous disclosures she has made -- disclosures that leave her vulnerable to criticism on issues like paid speeches -- while downplaying Trump’s historic lack of transparency.

  • MSNBC's Hewitt Blames Trump Business Failures On A Non-Existent "Clinton-Triggered Recession"

    Trump Falsely Claimed He Weathered “One Of The Most Brutal Economic Downturns In Our Country’s History” During One Of America’s Wealthiest Decades

    Blog ››› ››› CRAIG HARRINGTON

    MSNBC contributor and conservative radio host Hugh Hewitt parroted Republican presidential nominee Donald Trump’s false claim that he weathered “an economic depression” in the 1990s, with Hewitt blaming a so-called “Clinton-triggered recession” that did not actually happen for Trump’s disastrous business failures throughout that decade.

    During an October 3 speech in Pueblo, Colorado in which the GOP nominee attempted to deflect criticism in the wake of a devastating New York Times investigation into a decades-long period where he may not have paid income taxes, Trump blamed his business struggles in the 1990s on “one of the most brutal economic downturns in our country’s history” that he claimed was “almost as bad as the Great Depression of 1929.” Immediately following Trump’s speech, frequent Trump apologist Hugh Hewitt gave cover to Trump’s dubious claim, saying that President Bill Clinton’s policies and a supposed “Clinton-triggered recession of those years” were to blame for Trump’s business collapse, where he reported losses of over $900 million in 1995:

    Unfortunately for Trump and contrary to Hewitt’s claim, there was no recession during the Clinton administration, much less an economic contraction as severe as the Great Depression of 1929 or the profound economic and financial crisis of 2007 through 2009, which was inherited by President Obama.

    According to the National Bureau of Economic Research (NBER), the institution responsible for delineating and analyzing American economic cycles, there was a mild recession from July 1990 to March 1991 during the George H.W. Bush administration, and another from March 2001 to November 2001 during the first term of George W. Bush. Neither recession occurred during the period of time covered by the Times' report on Trump’s nearly billion dollar loss, or during Bill Clinton’s presidency, which was marked by steady economic growth and job creation. As you can see in these data from the Bureau of Economic Analysis (BEA) compiled by the Federal Reserve Bank of St. Louis, the 1990s resembled the exact opposite of the economic tumult Trump had described (recessions are noted in gray):

    The 1990s weren’t the only time when Trump’s real estate empire has been bedeviled by losses in the midst of an overall economic expansion. According to the latest reporting from Forbes magazine, which has been tracking Trump’s wealth for nearly four decades, the GOP nominee has lost almost $800 million over the past year mostly thanks to the declining value of his real estate while the rest of the economy performed admirably with a robust increase in median household incomes and historic reductions in poverty.

  • Five Ways Fox Is Spinning The Release Of Trump's Tax Returns

    ››› ››› JULIE ALDERMAN

    Fox News is using five strategies to deflect criticism away from Republican presidential nominee Donald Trump amid The New York Times’ release of portions of Trump’s tax returns. The network is hyping Trump’s claim that he can change the tax code because he knows it well, that most Americans do the same thing Trump did, that his tax avoidance shows how well his business career went, and that Democratic presidential nominee Hillary Clinton did the same thing. It’s also pivoting to criticize the Clinton Foundation.

  • Media Falsely Equate Trump’s Billion-Dollar Tax Avoidance Scheme With Clinton’s Taxes

    ››› ››› ALEX KAPLAN

    Media figures are inaccurately equating Democratic presidential nominee Hillary Clinton’s use of a common tax deduction on her 2015 tax return to Republican presidential nominee Donald Trump’s $916 million declared loss in 1995, which, The New York Times reported, he could have used to virtually wipe out his federal income tax obligations over the past two decades. Several media outlets have falsely claimed Clinton “did the same thing” as Trump when, in fact, Clinton’s 2015 tax return shows that she could take only a $3,000 deduction for her reported $700,000 loss, and her campaign reports that she has paid between a 25 and 38 percent income tax rate since 2001.

  • Right-Wing Media Faceplant In Rush To Accuse The Clintons Of Doing "The Same Thing As Trump" On Taxes

    Falsehood Rockets From Reddit To Fox News

    Blog ››› ››› MATT GERTZ

    Conservative media are attempting to deflect attention from the revelation that GOP presidential candidate Donald Trump took a $916 million loss in 1995 that might have allowed him to avoid paying federal income taxes for 18 years by saying that that Democratic nominee Hillary Clinton and former president Bill Clinton did “the same thing” by claiming a “$700,000 loss” on their 2015 tax return. The claim, which originated with a pseudonymous Reddit poster and has already spread to Fox News, fails to note that while the Clintons’ 2015 return shows that they did have a roughly $700,000 capital loss carried over from a prior year, that loss originates with the financial crash of 2008, and they received only a $3,000 deduction for those losses and paid $3.2 million in federal income taxes in 2015.

    The New York Times reported October 1 that after declaring “a $916 million loss on his 1995 income tax returns,” Trump may have “legally avoid[ed] paying any federal income taxes for up to 18 years,” according to tax documents the paper obtained. Utilizing “tax rules especially advantageous to wealthy filers,” writes the Times, Trump could have used the massive “financial wreckage he left behind in the early 1990s” to “cancel out an equivalent amount of taxable income over an 18-year period.” The Trump campaign has struggled to explain the revelation, but it has not denied the suggestion that Trump avoided paying nearly two decades of federal income tax.

    Last night, Reddit commenter “TheGoldenDon” claimed on the pro-Trump Reddit page “The_Donald” that “Hillary Clinton recorded a $700k loss to avoid paying taxes in 2015.” The post included an image from the Clintons’ return which shows that the Clintons had a net long-term capital loss of $699,540 carried over from a prior tax year. The image was picked up by the conservative blog Zero Hedge, which stated that the returns show that Hillary Clinton “Used Same Tax Avoidance ‘Scheme’ As Trump.”

    The claim rocketed through the conservative media and has been repeatedly cited on this morning’s Fox & Friends, where co-host Ainsley Earhardt claimed that the “$700,000 loss” shows that “Hillary did the same thing” as Trump.

    In fact, as the next page of the tax returns show, while the Clintons claimed a $700,000 capital loss carried over from a prior year, they could take a deduction for only of $3,000 for that loss:

    The first page of the tax return confirms that the Clintons received a $3,000 deduction for their capital loss:

    The next page confirms that they paid $3,236,975 in federal income tax that year.

    The Clintons claimed a $726,721 capital loss on their 2008 tax returns -- likely as a result of the financial crash -- and have carried forward the loss and claimed a $3,000 deduction in each subsequent year. The campaign says they have paid an effective federal tax rate of between 25 percent and 38.2 percent every year since 2001.

    This data is available because the Clintons have released decades of tax returns, while Trump has shunned more than 50 years of precedent by refusing to release any tax information.