Finding truth in Trump’s tax return

Rudy Giuliani has tried to make it easy for anyone who might be perplexed about his friend Donald Trump’s income tax maneuvers. All you need to know, Giuliani said Sunday on CNN, is that the tax code is complex and Trump is a “genius” for figuring out how to navigate it.

Giuliani was trying to help viewers understand the New York Times’ revelation that Trump may have used $916 million in business losses to legally lower his federal income taxes – or avoid paying them at all for more than a decade.

But this has nothing to do with genius. If it did, Trump would have already released his returns in full so the public could have a transparent look at his brilliance.

Trump has chosen not to release his returns because they would reveal that the career he boasts so much about is built on sand. That’s just one reason the 1995 tax return anonymously sent to the Times is so valuable. It refutes Giuliani’s argument in big numbers.

Most of the $916 million loss that Trump claimed for 1995 is probably derived from about $900 million in bank loans taken out in the mid- to late 1980s that he had personally guaranteed and that he used to wildly overpay for hotels, airlines, yachts, barren land and other trinkets. Trump couldn’t afford to buy any of this with his own money, he lacked the good judgment and foresight to pay the right price for almost everything he bought, and once he bought all of it, the interest payments on the loans quickly became unmanageable. Corporate bankruptcy ensued.

None of these things are hallmarks of a great business operator or deal maker, two of the central themes that Trump, Giuliani and the rest of Trump’s supporters have gestured toward when flogging Trump’s resume and suitability to occupy the Oval Office.

The $900 million in loan guarantees reflected in the 1995 return expose decision-making so poor, it almost forced Trump into personal bankruptcy. His bankers’ forgiveness and loans from his father’s estate helped him escape that fate, but his fumbling ultimately led to years of corporate bankruptcies, job losses and investors getting pummeled.

Trump told Hillary Clinton during the recent presidential debate that not paying federal taxes “makes me smart.”

But Trump isn’t that financially sophisticated. His eyes tend to glaze over when complex numbers come into play.

Trump’s own former accountant, Jack Mitnick, told the Times that it was always Trump’s ex-wife Ivana who asked probing questions about the couple’s taxes. Trump himself, Mitnick said, was disengaged and less detail-oriented than his father, Fred.

It’s now been more than two decades since the 1995 return was filed. In that time, Trump has become an international celebrity and made his riches a fixture of his presidential campaign. But how much has his business operation really improved?

Trump could answer that by releasing all his tax returns – which is maybe exactly why he hasn’t.

This story was originally published October 6, 2016 at 5:03 AM with the headline "Finding truth in Trump’s tax return."