October 3, 2016

Donald Trump went for yet another Big Lie today in order to justify his near-billion dollar loss in 1995.

Speaking to a crowd in Pueblo, Colorado today, Trump claimed that the economy in 1995 was terrible, worse than anything since 1929, or even the 2008 Great Recession.

In typical Trumpian fashion, he also claimed that only Trump, with his amazing business acumen and deep knowledge of the tax code, kept his company afloat without declaring bankruptcy, which is also a lie.

Here is the full transcript of the clip above, broken down with some facts.

Believe me, I understand the tax laws better than almost anyone, which is why I am one who can truly fix them. I understand it. I get it. and that is what I commit to do. We want fairness. We want money brought in. And we want money to be spent when it goes out. Because they spend our tax dollars so unfairly and unwisely. Remember that.

As a businessman and real estate developer I have legally used the tax laws to my benefit. And to the benefit of my company, my investors and my employers. I mean, honestly, I have brilliantly -- I have brilliantly used those laws.

I have often said, on the campaign trail that I have a fiduciary responsibility to pay no more tax than is legally required, like anybody else, or to put it another way, to pay as little tax as legally possible.

Katy Tur did a quick fact-check on this, and found the same as what I know to be true. This loss was on Trump's personal tax return, not a business return. Therefore, fiduciary responsibility is not applicable here.

And I must tell you, i hate the way they spend our tax dollars. And believe me, that makes a difference, as a major real estate developer in this country and throughout the world I face enormous taxes, city taxes, state taxes, sales taxes, excise taxes, employee taxes, federal taxes, VAT taxes.

It's my job to minimize the tax system to my best ability, which allows me to build properties which build tremendous growth in the community and always helps our providers of jobs.

And we always have to help our small businesses. What it's all about. What it's all about.

This is your daily reminder that Trump regularly stiffs small businesses at every opportunity. When he speaks of small businesses, he is not speaking of actual small businesses, like the building architect whom he stiffed. He is speaking of large business owners like Koch Industries and The Trump Organization, who put all of their business inside Subchapter S corporations which pass through income AND losses to their owners, which is why he has a near-billion dollar loss in 1995.

Moving on to the tax return, with the brief reminder that this is a page from his 1995 personal tax return.

The news media is now obsessed with an alleged tax filing from the '90s at the end of one of the most brutal economic downturns in our history.


If you remember the '90s, other than I would say 1928 there was nothing even close. The conditions facing real estate developers in that early period was almost as bad as the Great Depression of 1929, and far worse than the Great Recession of 1998, not even close. What was a great era of Ronald Reagan changed dramatically, and the landscape changed with it.

Bank failures and collapse, the absolute 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.

Many businesspeople, including some of my competitors and some of my friends were not able to survive.

Let's just stop right there. Trump is off a full decade. The Savings and Loan crisis was not something that happened in the 90s. That happened in the 80s, specifically on Ronald Reagan's watch, and largely because regulators fell asleep on the job in typical Republican fashion. "Junk bonds" were a large part of what caused the collapse of S&Ls, and they likely funded more than one of Trump's ventures.

No. Donald Trump is not going to hang the S&L crisis on Bill Clinton, who came along and cleaned up the mess Ronald Reagan and George W. Bush left behind, no matter how hard he tries.

Past where I cut off this clip, Trump went on to brag that he never, ever declared bankruptcy. Which is only partly true, because he put his businesses into bankruptcy four times. One of those bankruptcies was in 1991, and another in 1992. Both were Chapter 11 bankruptcies, with the 1991 Taj Mahal reorganization and loss amounts tying closely to the amount he passed through on that 1995 tax return.

Cut the crap, Donald. You're a lousy businessman and a worse liar.

As to his claim that he "brilliantly used tax laws," I'll let David Cay Johnston explain it, since he can do it better than I can.

The technique is simple. The taxes due immediately because a debt is forgiven can be exchanged for relinquishing future real-estate tax deductions. Trump agreed to forgo his future right to take about $1 billion worth of depreciation on his casino hotels.

This exchange created a future problem for Trump. Real estate that cannot be depreciated is worth a lot less. Indeed, generous tax benefits drive real-estate investment. So while Trump escaped an immediate income-tax bill, the future tax benefits he gave up would mean that he would likely have to pay income taxes on his salary, fees for licensing his name, and other income.

To solve this problem, Trump sold stock for the first time in 1995. He founded Trump Hotels and Casino Resorts, which which then took ownership of his casino hotels.

That meant Trump got money for selling his casino hotels, while the investors got real estate with greatly diminished tax benefits.

Fiduciary responsibility, you say? Not so much.

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