There are two theories for why Donald Trump won’t release his tax returns

Robert Reich
8.13.2016

There are two theories for why Donald Trump won’t release his tax returns (which every presidential candidate since Jimmy Carter has done). One theory is they’d show how indebted he is to Russian oligarchs and, indirectly, Putin, thereby confirming fears that they own him.

The other is he hasn’t paid a dime of income tax for years. That seems likely. The only of his tax returns ever made public – in 1978, 1979, and 1984 – showed no income taxes paid. It’s perfectly legal because:

1. Real estate developers like him enjoy a special loophole letting them use paper losses to offset ordinary income.
2. They can also deduct “depreciation” on their properties – the fictional idea that real estate loses value over time.
3. Another loophole lets them avoid taxes when they sell properties at large profits if they then use the proceeds to buy other real estate.
4. Developers often make minimal down payments and use as much debt as possible to finance their purchases -- with interest payments on that huge debt also tax deductible.
5. Trump’s businesses also deduct all their expenses, which are likely to include most of his living and travel expenses because they’re so intertwined.

In other words, it’s likely Trump pays no taxes because of all the tax loopholes he and other real estate developers have wangled.

But that doesn’t make it right. Patriotism isn’t just about talking about “making America great.” It’s about bearing a fair share of taxes necessary to keep the nation going.

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