The New York Times’ bombshell scoop about Donald Trump’s 1995 tax returns is fascinating largely because Trump’s determination to keep his full tax documents secret implies there’s something truly scandalous somewhere in there. But on its own terms, the document tells us surprisingly little. It’s no secret that Trump horribly mismanaged his businesses and wound up out of cash in the early ’90s — he even wrote a self-aggrandizing version of the story called The Art of the Comeback. And we know from sporadic casino regulatory filings that Trump has often managed to avoid paying federal income tax. The sheer scale of Trump’s billion-dollar loss is impressive, but the basic volatility of Trump’s business career was already known.
Instead, as is almost always the case with Trump, what’s truly disturbing isn’t what was in the tax returns — it was what Trump did in response. Faced with a moderately embarrassing news cycle, Trump cocooned himself with sycophants who broadcast the message that losing a billion dollars was actually brilliant. He lashed out at critical coverage in a manner that revealed ignorance of the law and contempt for a free press.
And most of all, he retreated into a rhetorical fantasy-scape of his own creation. An alternate universe in which the mild early-’90s recession was the near-equivalent of the Great Depression; Trump businesses had never gone bankrupt; and aggressive tax avoidance isn’t just a thing Trump did because he could, but a lofty fulfillment of a moral obligation. It’s the response of a man with the emotional self-control of a toddler. But more alarmingly, of a man who genuinely seems to see no difference between what’s good for Donald Trump and what’s good for the world.
Trump’s fake economic history
Speaking at a rally Monday night in Colorado, Trump addressed the tax controversy in part by concocting a ridiculous alternate economic history of the United States in which the small recession of the early 1990s was actually worse than the Great Recession of 2008:
If you remember the early ’90s, other than, I would say, 1928, there was nothing even close. The conditions facing real estate developers in that early ’90 period were almost as bad as the Great Depression of 1929 and far worse than the Great Recession of 2008. Not even close. What had been a booming economy in the era of Ronald Reagan changed dramatically and the business landscape changed with it. Bank failures and collapse, the absolute total destruction of the savings and loan industry, and the implosion of the retail market and real estate in general, something we've never seen anything like it.
The 1990s economic down-cycle lasted eight quarters, and the unemployment rate peaked at 7.8 percent for one month. The Great Recession down-cycle lasted 18 quarters and the unemployment rate stayed over 7.8 percent for four years, peaking at 10 percent.
What explains Trump’s mis-recollection? Well, for starters, the early 1990s problems really were unusually concentrated in the commercial real estate sector where Trump happens to have worked at the time. But more importantly, the early 1990s were a profoundly bad time for Donald Trump personally. He made a lot of poor business decisions in the 1980s, many of them financed with high interest rate bonds that had become newly fashionable at the time. That left him, personally, poorly situated to weather even a mild downturn.
Which is why a mild economic downturn became a total calamity for him. One he was only able to survive through such expedients as an illegal $3 million loan from his dad, and an even bigger — though this time not illegal — $30 million loan from his siblings.
Trump’s fake fiduciary responsibility
Earlier, Trump justified his aggressive tax avoidance as not just something he did because he likes money, but as the lofty exercise of a solemn duty:
I have a fiduciary responsibility to pay no more tax than is legally required like anybody else. Or, put another way. To pay as little tax as legally possible.
This was no mere off-the-cuff remark. The Trump campaign’s official written response to the Times story flagged an alleged fiduciary responsibility to minimize taxes. Key surrogate Rudy Giuliani invoked it during media appearances on Trump’s behalf.
As Cornell’s Lynn Stout told Time magazine, “his argument is legal nonsense.” NBC’s Jane Timm writes that, by definition, “being a fiduciary means doing what's best for another person or entity, not to yourself.” There is no way Trump can have a fiduciary obligation to himself to maximize his own after-tax income.
“There is no such thing as a fiduciary duty as a businessman to oneself,” Richard W. Painter, the top ethics counsel in George W. Bush’s White House, told Gretchen Morgenson. “That’s called greed.”
Trump’s contempt for press freedom
Trump also issued a nonspecific threat to sue the New York Times over the story.
It’s not clear what grounds he would cite, since the Times isn’t libeling him by publishing inaccurate information. There is a federal law against publishing improperly obtained federal income tax returns, but that’s probably why the documents the Times was sent were state tax forms. The leaker of the documents may themselves have broken some laws, but neither Trump nor the Times knows who the leaker was. The reality is that it was a shrewdly assembled caper, assembled by both a smart leaker and the team of first-rate lawyers and investigative journalists at the Times.
But of course Trump doesn’t need a good reason to threaten to sue. Just a few weeks ago he said he would sue the Times for “irresponsible intent,” which is not in any way a real thing you can sue people over. And by Trevor Timm’s count, the Times is one 11 separate news organizations Trump has threatened to sue during the course of the campaign.
Trump’s worldview is all about Trump
The common thread in all of this is Donald Trump’s exceptionally Trump-centric worldview.
- An economic downturn that was unusually bad for Donald Trump becomes an economic downturn that was unusually bad.
- Donald Trump’s personal desire for Donald Trump to have more money becomes a fiduciary obligation to enrich Donald Trump.
- The laws balancing privacy rights and freedom of speech become special tools to shield Donald Trump from embarrassment rather than serve the public interest.
“All my life, my whole life I’ve been greedy, greedy with money,” said Trump back in January in one of the more notable lines of the campaign. “But now I want to be greedy for the United States.”
It’s a pretty good pitch, all things considered. But it’s not remotely plausible. There’s no new Trump who’s been remade as a selfless patriot. Under attack, he simply mentally rewrites everything, from the First Amendment to US economic history, to retroactively justify his own personal self-interest.
And yet looking back, he can’t even admit the obvious reality that he opted out of paying taxes because he could get away with it, not because he was under some obligation. Trump is Trump, and every new story — and Trump’s reaction to every new story — just confirms how deeply and profoundly Trumpy he continues to be.