Here’s the key takeaway from the NY Times tax “bombshell”…

Trump’s low taxes were courtesy of an “unwitting gift” from Obama-Biden !
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It didn’t surprise me that Trump paid virtually no income taxes for the past decade.

But, I was surprised to read an under-hyped part of the story:

Starting in 2010 (Trump) claimed, and received, an income tax refund totaling $72.9 million — all the federal income tax he had paid for 2005 through 2008, plus interest.

(The $72.9 million refund) was “an unwitting gift from an unlikely source — Barack Obama.” Source

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Say, what?

Here’s the relevant part of the story…

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According to the Times article

Trump paid $70.2 million income taxes in 2005, 2006 and 2007 … boom years for “The Apprentice”.

In 2008 and 2009, during the financial crisis (i.e. the “worst recession since the depression”), Trump declared a total of $1.4 billion in business losses from his core businesses.

In general, losses offset gains (i.e. “income”) to arrive at net taxable income.

Losses that exceed income in the current year can be rolled forward to offset income in future years … and, in some cases, can be rolled back to past years, potentially resulting in a refund for taxes paid in those years.

In 2008 and 2009, tax laws had prevented Trump from using the the “tax loss carry-backward” to 2005 and 2006.

Again, according to the Times:

Until 2009, tax losses could only be used to wipe away taxes going back only two years.

But that November, the window was more than doubled by a little-noticed provision in a bill Mr. Obama signed as part of the Great Recession recovery effort.

Obama’s gift: Business owners could request full refunds of taxes paid in the prior four years, and 50 percent of those from the year before that.

With the stroke of a pen, Obama created an opportunity for Trump to claim a  $72.9 million refund — the taxes Trump paid in 2005 to 2007, plus interest (which continues to accrue). 

Note: “Trump also received $21.2 million in state and local refunds, which often piggyback on federal filings.”

In a nutshell: Trump paid over $70 million in income taxes but Obama-Biden said “Fogetaboutit”.

Tell me again who’s smart and who’s dumb…

Of course, Trump used the Obama-Biden tax regs to his advantage.

The scandal is how naïve Obama-Biden were to change the tax law without considering its consequences.

My bet: Trump wasn’t the only businessman to take advantage of the “loophole” that Obama-Biden created.

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