Trump Tax Returns: Who Owns Income, Who Takes Risk?

In a bombshell report The New York Times revealed ten years of tax information showing President Donald Trump claimed financial losses of over a billion dollars, wiping out any taxable income for those years.

The Times and other media claim the revelation refutes Trump’s Art of the Deal persona as a highly successful businessman: “Mr. Trump was propelled to the presidency, in part, by a self-spun narrative of business success and of setbacks triumphantly overcome,” while the leaked information by contrast “paints a different, and far bleaker, picture of his deal-making abilities.”

Other critics question whether the losses were legitimate – and have seized on the story as an illustration of a tax system which fails to tax property owners and real estate entrepreneurs enough. New York Magazine’s Eric Levitz, for example, alleges that allowances for claiming loss on property depreciation (a reduction in value of a property asset over time) aren’t adequately balanced by gains in property value:  It’s an indefensible provision that, among other things, allows many landlords to pay no taxes on their rental income.”

Without expertise in commercial real estate tax law, many learning of the revelations reported by The Times will likely evaluate the significance of the news based on their judgment of the reliability, objectivity, and intent of those doing the reporting – and even partisan Democrats acknowledge that the tenor of media coverage of the Trump presidency betrays a consistently negative bias.

Without hypothesizing on what Ayn Rand’s opinion of Donald Trump might have been, her views on capitalism and entrepreneurship were clear.  She celebrated those rare individuals who were willing to risk greatly to achieve greatly – risk which, by its nature, meant the willingness to brave great losses as well.

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Ayn Rand celebrated those rare individuals who were willing to risk greatly to achieve greatly – risk which, by its nature, meant the willingness to brave great losses as well.

Ayn Rand also had distinct views on the individual right to property – and the unethical seizure of private property by government for the purpose of economic redistribution. The fullest exposition of her views on the subject are contained in her essay, “Government Financing in a Free Society”:

In a fully free society, taxation—or, to be exact, payment for governmental services—would be voluntary. Since the proper services of a government—the police, the armed forces, the law courts—are demonstrably needed by individual citizens and affect their interests directly, the citizens would (and should) be willing to pay for such services, as they pay for insurance.

While she was fairly circumspect on how to implement such a system, and conceded it would have to “be regarded as a goal for a distant future,” she was unequivocal in positing the principle of voluntary taxation on the premise that “that the government is not the owner of the citizens’ income and, therefore, cannot hold a blank check on that income.”

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It’s high time to evaluate not just the validity of leaked tax information, but the moral validity of a tax system which ignores constitutional limits on government authority and protections on individual property rights.

In light of the President’s longstanding, and exceptional refusal to release his tax records, it’s likely these revelations will not be the last, particularly as media critics and political adversaries of President Trump gear up for a shot to take him out of office – by democratic vote next year, if not by attempted impeachment earlier.

Moreover, as Democratic primary contestants vie with each other to vilify the rich, threaten to increase confiscatory tax rates on top earners, and promise to expand government services, it’s high time to evaluate not just the validity of leaked tax information, but the moral validity of a tax system which ignores constitutional limits on government authority and protections on individual property rights.