Is Donald Trump a self-made billionaire, as he likes us to believe? Far from it, or so The New York Times alleges. Their explosive new report openly accuses the president of a bevy of underhanded financial activities – a great many of them illegal – stretching back to age three, all aimed at passing Fred Trump’s massive wealth to his children while avoiding gift or inheritance taxes.
If what The Times charges is true, then Donald Trump built his wealth by transferring something like $413 million in today’s dollars from his father over the years. The report is allegedly based on over 100,000 pages of financial documents, from public records to confidential tax information secretly leaked to the paper, and interviews with Fred Trump’s former employees and advisors. According to the report:
“The president’s parents, Fred and Mary Trump, transferred well over $1 billion in wealth to their children, which could have produced a tax bill of at least $550 million under the 55 percent tax rate then imposed on gifts and inheritances.
The Trumps paid a total of $52.2 million, or about 5 percent, tax records show.”
A Grain of Salt
This isn’t the first article with suspiciously anonymous sources we’ve seen from The New York Times lately. Just because they claim to have these documents doesn’t mean they do – or that they’re accurate. As is generally the case with newspapers-turned-tabloids like The NYT and The Washington Post, anything their “reliable sources” offer up should be taken with a grain of salt and a shot of penicillin.
However, just because the claims are outrageous and we can’t see the source documents doesn’t necessarily mean they’re false. Now that they’ve released these allegations, no doubt there will be quite a bit of digging into both the story and Trump’s past. So without further ado, here’s how The New York Times claims the Trump family, and the president in particular, “cheated” the government out of millions of tax revenue.
Working for the Man
From the tender age of three, Donald Trump was employed by his old man, so the story goes. His starting salary was the equivalent to $200,000 a year at current value – not bad, for a toddler. As he grew into a man, young Donald was given considerably more job titles and money. The president was supposedly bringing in a cool million each year by the time he graduated college – which grew to a $5 million annual salary in his 40s and 50s.
In 1992, the Trump family formed the company All County Building Supply & Maintenance, according to the report, to mask massive transfers of funds from Fred Trump to his kids and extended family. Ostensibly, All County would supply everything Fred needed for his buildings, “from boilers to cleaning supplies.” They didn’t, according to the alleged confidential records. Rather, the company was a shell through which Fred passed millions of dollars to his children by marking up purchases already made by other employees. To top it off, Fred Trump then allegedly used the padded receipts to justify raising the rent for thousands of people.
An Undervalued Strategy
Additionally, Donald allegedly helped his father shave even more off the tax bill by devising a strategy to undervalue Fred’s assets. Which, of course, were sold for far more than what they were supposedly worth when Fred gave them to his children.
In 1997 – a year and a half before Fred died – The Times said the family saved hundreds of millions of dollars in taxes by valuing the majority of the Trump empire at just $41.4 million when the kids took over, then selling the buildings over the next decade for “more than 16 times that amount.”
We’ve all heard the “$1 million loan in 1975, paid back with interest!” story. But that isn’t the half of it, apparently. If this report is to be believed, Fred gave Donald loans throughout his life – possibly as much as $14 million worth – and didn’t expect to be paid back. The loans were, of course, just another way to give his son money and not pay what the government considers the appropriate taxes on it.Fred and Donald Trump
The New York Times claims to have tried to get President Trump to comment on this information for weeks to no avail. However, once the story was released, Charles J. Harder, a lawyer for the president, gave a written statement that called the report “100 percent false, and highly defamatory.” Mr. Harder wrote: “There was no fraud or tax evasion by anyone. The facts upon which The Times bases its false allegations are extremely inaccurate.” Additionally, though The NYT neglected to include it in their article, Mr. Harder warned them that they might be leaving themselves open to being sued for defamation.
In an odd turn of events, the president hasn’t tweeted about the allegation yet – not a peep. Does that mean something? Certainly, there will be those who see it as proof that he knows he’s caught. Perhaps it’s because he knows this allegation could seriously affect his future as president – whether the story itself is true or false – then again, maybe Trump doesn’t think it’s worth bothering with. Perhaps it’s early, yet, to read too much into it.
The Big Lie
The common theme running through the article is that, in addition to being a cheat and potentially a thief, Donald Trump is also a liar. He lied while committing the fraud and tax evasion. He lied when he claimed to be a self-made billionaire. Finally, he lied to get elected president and continues to lie about pretty much everything to this day.
Maybe Donald Trump has lied throughout his life about this, and perhaps he hasn’t. If this report is proven, it won’t be his taking the credit for his father’s work that gets him in trouble. While there are exceptions, lying generally isn’t a punishable crime. And did he lie to get elected? If The Times isn’t the one fibbing, then he absolutely did. But if we locked up every political candidate who lied to get elected, we wouldn’t have a government – or any room for murderers or other violent offenders in prison!
The End Is Nigh?
Are these allegations the harbinger of Trump’s doom? If proven, what penalties would Donald Trump face for crimes committed over two decades ago? Liberty Nation’s legal affairs editor, Scott D. Cosenza explains that he’s most likely in the clear on criminal charges, but it might still cost him a pretty penny:
“There are some conditions and exceptions, but generally the statute of limitations on tax fraud cases is six years. Usually, the statute of limitations begins when the crime ends. However, the crime does not always end with the filing of a false tax return. The end time of the crime may extend to when the last affirmative act is taken, such as filing an amended return, for instance. Civil fines for tax fraud are not restricted by a statute of limitations.”
In addition to civil fines, the political cost could be quite high. Democrats would cry foul and bring it up at every possible opportunity. It could spell serious trouble for 2020 – though successfully avoiding millions in taxes might give Trump some much-needed street cred with the libertarians amongst us.
And of course, regardless of whether these decades-old crimes would constitute some impeachable offense, and whether they’re proven or not, we can almost certainly expect a renewed cry from the left to have him removed from office.
Will this most recent set of allegations prove out, or fall flat? What effect will this have on Trump’s presidency – and the likelihood he’ll enjoy a second term? What will happen when Trump decides to fire back – as he almost certainly will? We shall see.
*This story has been updated to reflect the fact — which The New York Times ommitted from their story — that Mr. Harder’s response included a warning that they might be sued.