The New York Times dropped a bombshell Tuesday with its report detailing how President Donald Trump received the equivalent of $413 million in today’s dollars from his father’s real estate empire, with much of the money delivered through “dubious tax schemes” to dodge payments to the IRS and, in some cases, “outright fraud.”
Trump on Wednesday called the story a “boring and often told hit piece” and a lawyer for the president vigorously denied the allegations to the Times, saying that the facts on which they are based “are extremely inaccurate.” New York State officials have reportedly opened an investigation into the Trump’s family’s tax practices in the wake of the report.
Whatever the political and financial implications of the report may be for Trump, tax policy experts on the left are jumping on the details in the report as emblematic of the ways in which the wealthy avoid paying their fair share of taxes.
“The key takeaway,” said Alan Essig, director of the liberal Institute on Taxation and Economic Policy, “is that the wealthy and powerful abide by a different set of rules than the rest of us. … During his presidential campaign, President Trump called for closing the types of loopholes that allow some wealthy people to get ‘away with murder’ on taxes, yet his most significant legislative achievement, the Tax Cuts and Jobs Act, created a slew of new loopholes and amounted to a massive tax cut for the wealthiest Americans.”
In a Twitter thread, Lily Batchelder, a professor at the New York University School of Law and former Obama economic adviser, argued that the Times investigation highlights the problems with the estate tax.
“The estate tax should be reinvigorated,” she writes, not cut, as the Republicans did with their 2017 tax overhaul. And loopholes like “valuation discounts,” which allow heirs to avoid taxes on the assets involved, should be shut down. “Obama’s Treasury proposed a regulation limiting estate tax avoidance through valuation discounts. This appears to be the exact scheme the Trumps used to avoid millions of dollars in estate taxes. Trump’s Treasury reversed it,” Batchelder writes.
Her other suggestions include:
- Increasing the IRS budget so it can enforce tax law and crack down on more cheats.
- Repealing the stepped-up cost basis on inherited assets.
- Requiring heirs of huge amounts, like Trump, to pay income and payroll tax on what they inherit.
Read Batchelder’s Twitter thread for more.