President Trump's tax returns.
Plus, should you vote by mail?
I’m Isaac Saul, and this is Tangle: an independent, ad-free, subscriber-supported politics newsletter that summarizes the best arguments from across the political spectrum — then “my take.” You can read Tangle for free, subscribe for Friday editions and you can reach me anytime by replying to this email. If someone sent you this email, they’re asking you to sign up. You can do that by clicking here.
Today’s read: 11 minutes.
Trump’s tax returns, a question about whether you should vote by mail and some important numbers for tonight.
Photo: Gage Skidmore from Peoria, AZ, United States of America
Correction.
In Friday’s special edition, I referred to Chuck Schumer as the Senate Majority Leader. Schumer is, in fact, the minority leader — and this is the second time in Tangle’s history I’ve called someone the majority leader who wasn’t. What’s there to say? When you write these names and titles 100 times a day, sometimes your brain melts. Long live my hawk-eyed readers.
This is the 16th Tangle correction in its 57-week history. I track corrections in an effort to be transparent and plan to stop counting when the number becomes embarrassing.
Reader feedback.
Yesterday, several readers wrote in about this statistic: “77% of Americans want Roe v. Wade preserved.” Each of them fairly noted that this data point is a bit misleading. One, because many Americans wrongly believe that Roe v. Wade being overturned would make all abortion illegal. And two, because many Americans’ views on whether an abortion should be legal are tied directly to when the abortion happens.
This blog post sums up the paradox nicely: "When asked about Roe v. Wade most Americans want the case upheld. Yet simultaneously most Americans think abortion should be illegal after the first trimester and about half think it should be illegal outside of the hard cases of rape or life of the mother. This implies many Americans want Roe v. Wade upheld but also want abortion restrictions that Roe v. Wade makes impossible.”
Quick hits.
The total number of global deaths from COVID-19 surpassed one million yesterday, another grim milestone in one of the worst global pandemics in human history. The death toll has surpassed 204,000 in the United States alone, and many health officials — including Dr. Anthony Fauci — continue to insist the official count is lower than the real total. “Adjusted for population, Peru, Belgium, Bolivia, Spain and Brazil have had the world's deadliest outbreaks to date,” Axios reported. “The U.S. is eighth and Mexico is 10th.”
House Democrats have come back to the table with a $2.2 trillion coronavirus relief package, restarting talks with the White House and Senate Republicans. The bill would restore $600 weekly federal unemployment benefits and include money for restaurants, child care centers, airlines, performance venues and the Postal Service, according to The Wall Street Journal.
Yesterday, President Trump announced 150 million rapid COVID-19 tests would be deployed across the country. 100 million tests are supposed to be given to states and territories to help reopening, while 50 million will go to high-risk communities like nursing homes.
A new poll from the crucial battleground state of Pennsylvania was released by ABC/The Washington Post last night, showing Joe Biden with a healthy nine-point advantage. “If Biden really is ahead by 9% in PA, it’s not a scenario where late deciders or ‘naked ballots’ would meaningfully affect the outcome,” Cook Political’s David Wasserman said.
Donald Trump and Joe Biden will participate in the first presidential debate tonight at 9 p.m. EDT. The highly anticipated debate will be hosted by Fox News in Cleveland, Ohio, and moderated by Fox News host Chris Wallace. 74% of voters are expected to tune in, according to a recent poll.
What D.C. is talking about.
Donald Trump’s taxes. On Sunday, The New York Times dropped a deeply reported story on the president’s financial situation based on decades of tax returns the paper obtained. It is the first of a series of stories on Trump’s finances The Times says will be released in the coming weeks.
The tax records contain much of the financial information the president has long hidden from public view. In 2016, candidate Trump broke previous precedent by refusing to disclose his tax returns to the American public, citing an ongoing audit and his vast array of businesses. Trump was the first major nominee for president since 1974 — with the exception of Gerald Ford in 1976 — not to release his tax returns to the public.
The Times report did, in fact, confirm the existence of an audit (though experts say there is no reason that audit would prevent him from releasing his returns). That audit is being conducted over a decade-long battle between President Trump and the Internal Revenue Service (IRS) on the legitimacy of a $72.9 million tax refund the president claimed and was given. If Trump loses the battle, he could owe more than $100 million in taxes to the IRS, a backbreaking sum of money when considering other revelations from the report, including already existent debt totaling hundreds of millions of dollars.
From The New York Times report:
The tax returns that Mr. Trump has long fought to keep private tell a story fundamentally different from the one he has sold to the American public. His reports to the I.R.S. portray a businessman who takes in hundreds of millions of dollars a year yet racks up chronic losses that he aggressively employs to avoid paying taxes. Now, with his financial challenges mounting, the records show that he depends more and more on making money from businesses that put him in potential and often direct conflict of interest with his job as president.
What the right is saying.
If there was ever a story that the right could widely mock in unison, this one might be it. For years, Trump refusing to release his tax returns has been a subject of much speculation on the left. Is he breaking the law? Does he owe Vladimir Putin millions of dollars? How stupid is he? Many on the right have gleefully read The Times report and noted it’s riddled with speculative and mocking language and contains little in the way of bombshells for Trump.
The Wall Street Journal editorial board said voters can “decide whom to believe,” as The Times won’t release the tax documents to protect its sources and Trump continues to deny he pays so little in taxes.
“Is it a scandal if Mr. Trump legally exploited the tax code’s treatment of chronic business losses to pay little tax? Hardly. Mr. Trump admitted this himself in a 2016 debate,” the board said. “Congress littered the code with loopholes aimed at assisting real-estate businesses, among others. Democrats write a tax code to please their corporate donors and then selectively attack CEOs or businesses that use the loopholes… The story also claims that Mr. Trump’s empire is under financial stress and rising debt. This may be true, but the reporters can’t seem to decide if Mr. Trump is a shark exploiting the White House for personal gain or a sap who is bleeding cash while in office. Brilliant or bumpkin? Make up your mind.”
Tim Worstall noted some hypocrisy in the story, writing in The Washington Examiner that “There's nothing in Trump's tax information that would frighten a tax accountant.”
“Just take a quick look at the New York Times's own accounts,” he wrote. “They save up losses ($500 million in 2006! $70 million in 2008!) which they then put against future profits — as every company and business has the right to do, and every reasonable, sensible, tax system allows. They take depreciation on buildings, $8 million a quarter on their new one apparently. They pay consultants, as consultants tend not to do the work if they think they won't be paid.”
Freddy Gray mocked the story in Spectator USA, proclaiming “There is no smoking gun.”
“Despite clearly exhaustive efforts, the Times investigative team has failed to uncover any illegality or clear wrongdoing,” he wrote. “In fact, the subtext of the story is a mounting frustration at the skill of Trump’s accountants in alleviating their man’s fiscal burden. The reporters seem particularly pained to note that a law passed under President Barack Obama enabled Trump to recoup more historic losses than he could otherwise have done… The paper is reduced to mocking Trump where they think it hurts him most — by pointing out that he’s not as rich or as ‘smart’ as he says he is. Most of his business empire runs at a loss — ha ha! That line of attack gives satisfaction to media people who now hate Trump for a living. But do voters really care?”
Some were less impressed. Conservative provocateur Ann Coulter was trending on Twitter this morning after she criticized Trump and aligned herself with the left on the story.
“I don't think the conservative take on [Donald Trump] paying no taxes should be: BECAUSE HE'S SMART!” she tweeted. “I've paid nearly 50% of my income in taxes, year after year, and any system that allows billionaires to pay ZERO is unspeakable [sic] corrupt. How about changing it, Democrats?”
What the left is saying.
For many on the left, the story is more proof that everything about Trump is fraudulent: his business success, his claims of financial acumen, every other word out of his mouth and, of course, his hair — which he apparently spent $70,000 on and then wrote off as a loss on his taxes. All of it, together, paints a picture of a fundamentally broken tax system that those concerned with wealth disparity on the left say overwhelmingly benefits the rich.
The New York Times editorial board noted that a recent study showed the “400 wealthiest households paid 70 percent of their total income in federal, state and local taxes in 1950, 47 percent in 1980 and 23 percent in 2018. The cuts in tax rates have come mostly at the federal level.”
“In the years before he became president, Donald Trump lived lavishly while paying little in federal income taxes,” the board wrote. “The Times reported on Sunday that Mr. Trump paid no taxes in 10 of the 15 years immediately preceding his run for the White House. In each of the following two years, 2016 and 2017, he paid the token sum of $750… The portrait of a man who earned hundreds of millions of dollars, lived a life of comic excess and yet, in many years, paid nothing in federal income taxes is an indictment of the federal income tax system. It illustrates the profound inequities of the tax code and the shambolic state of enforcement.”
In The Washington Post, Elie Mystal said Trump’s tax payments look more “indicative of a cheat than a failure.”
“For instance, he appears to have paid his daughter Ivanka Trump nearly $750,000 in unexplained ‘consulting fees,’” Mystal wrote. “A large payment to a family member is inherently suspicious, and a prosecutor investigating tax fraud would try to establish what, if anything, Ivanka’s company did for the money. If the Trumps don’t have a good answer, and receipts, it could be seen as a willful act taken to evade $750,000 of income tax liability.”
Others are far more concerned with the debt side of this — and what it means for the country when a president may be under serious financial burdens and has the legislature at his back.
“According to the Times, Trump has about $421 million in debts which he has personally guaranteed and which are coming due over the next several years,” Timothy L. O’Brien said in Bloomberg. “The Covid-19 pandemic has [also] taken a particularly brutal toll on the sectors in which the Trump Organization operates — real estate, travel and leisure. If Trump is unable to meet his debt payments, he’s either going to have to sell assets or get bailed out by a friend with funds.”
This wouldn’t be a major story if he was just a reality star, O’Brien said, but he’s the president, and “the trade-offs someone like him would be willing to make to save his face and his wallet taint every public policy decision he makes — including issues around national security. If Vladimir Putin, for example, can backchannel a loan or a handout to the president, how hard is Trump going to be on Russia?”
My take.
Throughout his runs for public office, there were rumors swirling that Richard Nixon had been gaming the tax system to his advantage. Those rumors became so loud Nixon could no longer ignore them — so he released four years of tax returns in 1973. A Congressional committee pored over the returns and found he owed $500,000 in back taxes and interest (about $2 million in 2020 money), a bombshell story at the time that — ever since — has led to presidential candidates releasing their tax returns.
Trump has danced his way through hiding his, as the Wall Street Journal editorial board rightly pointed out. He’s promised to release them and then refused, oscillating back and forth (or, as others might put it, “lying” about his intentions). He probably could have avoided the damaging press he’s getting now by just putting them out himself, but alas, he didn’t do that — and the dogged journalism of The New York Times is producing them for the public instead. Say what you will about The Times (I’ve criticized them here plenty), but this is good journalism and must have taken an unbelievable amount of work.
There are quite a few things that are staggering about this reporting, not least of which is that Trump’s empire has pulled in far more money from overseas than we knew before — taking in $13 million from Turkey alone, a country run by Recep Tayyip Erdogan, a strongman leader whose politics are rife with corruption and who actively fails to protect women’s rights or freedom of speech. How those financial entanglements impact Trump’s relationship with Erdogan, which has been unusually (and regretfully) warm, is exactly why voters have asked for every presidential nominee’s tax returns for more than 40 years.
This stuff is not as complicated as it sounds or looks. Government officials are routinely rejected from obtaining security clearances because of debts they have to foreign countries, and his tax returns show Trump has hundreds of millions of dollars of debt coming due to lenders whose identities we still aren’t clear on because the money is often passed through entities and LLC’s. In another world, under another president, the refusal to release these records, followed by the records The Times is now reporting, would be an election-shifting story. In America in 2020, it’s just a Tuesday.
The left’s and the right’s reactions here have both been reasonable. I’ve seen compelling arguments from each side that this is a big or overblown story. But two things are indisputable about the tax records.
First, they definitively show the president is not the brilliant, wily businessman he portrays on TV. He’s made millions from his brand, his personality, and his time as a reality television star. He’s kept his head above water. John F. Harris argued that this story really proved Trump is a genius, and there’s no doubt the details support his reputation as a masterful manipulator of the media and his brand.
But, once again, as he did in the 1990s, he’s squandered a massive inheritance by running basically every company he takes control of into the ground. That’s not an exaggeration: the records show pretty much everything he’s personally overseen is operating at an astounding loss and has been for two decades, while the businesses he’s been partially or totally removed from have had success (and, in some cases, earned him passive income). He’s earned his reputation as a media master, with very good accountants, yet has more failing businesses than you or I can count on all of our fingers and toes.
Second, our tax system is broken. The IRS targets low-income households that can’t pay for tax attorneys while they are mired in a decade-long $100 million lawsuit with the President of the United States, a billionaire. This story is unlikely to resonate with voters, because most people’s eyes will gloss over while reading The Times piece and the complicated tax loopholes it details.
But it is the story of the class warfare being waged in politics and in the streets right now, and it adds gasoline to the progressive left’s and populist right’s positions that the wealthy, the politicians, and the corporations continue to fleece the American middle and lower classes. That a teacher or construction worker or nurse pays more in income taxes than Donald J. Trump the billionaire president is a simple and effective indictment on how our country operates. It may not be fair to blame Trump for working the system, but it is more than fair to blame the system for being worked by Trump.
Your questions, answered.
Q: I have been voting absentee ever since I became a mom, over 20 years ago. I am now reading and hearing so much about huge numbers of ballots being rejected; I can see sometimes there may be a torn or soiled ballot or some weird reason one can’t be counted, but what I am reading is beyond comprehension. Is it real, or just some fear tactics?
— Suzette, San Francisco, California
Tangle: Unfortunately, it looks real. The issue is and will be more pronounced in some states than others. For instance, much of the attention has been on Pennsylvania, a battleground state where the state Supreme Court recently ruled that officials should throw out “naked ballots.” These are ballots that arrive without being placed inside a second “secrecy envelope” that, in Pennsylvania, must be used to keep ballots private when they are returned by mail.
The two-envelope mail-in system is more complicated than in most other states, and there’s legitimate cause for concern: in November, Philadelphia had a municipal election and 197 of 3,096 absentee ballots were sent in without their secrecy envelope. That may not sound like much, but that is 6.7% of all absentee ballots, and it’s from a group of highly engaged voters who are casting absentee ballots in a municipal election and thus — one would presume — high IQ voters who have done this kind of thing before.
In 2020, many voters will be voting by mail for the first time. So, to address your question, I imagine you are less likely to make a mistake and have a soiled ballot than others, though you will almost certainly have your vote counted later than in years past, given the number of people who will vote by mail in California. And other Californians are definitely liable to mess up. In the presidential primary, California threw out 100,000 botched mail-in votes. Most of those thrown out ballots arrived too late, while others had no signatures. That won’t matter much in the presidential race, but it could have a huge impact on local and Congressional races.
In states like Pennsylvania, it could be a huge issue. One election official estimated more than 100,000 votes would be thrown out. Donald Trump won the state in 2016 by 44,000 votes, and he’s unlikely to win without Pennsylvania this year but very likely to win if he holds onto it. A viral article from The Atlantic this week detailed how Trump and Republican officials are already laying the groundwork to contest ballots and election results in Pennsylvania, though several of those Republican officials have said that while the plans were real, they were taken out of context. Experts in Pennsylvania I spoke to viewed The Atlantic story — and the doomsday scenarios it laid out — with a healthy dose of skepticism.
This year, I’ll be voting in person, and I’m telling friends and family who are in good health and my age to do the same. Frankly, if you are sanitizing your hands, wearing a mask and following all the procedures in place, I view voting in person as a low-risk activity. I’m also voting in person as a reporting exercise to see what it’s like at the polls. That’s my personal calculation and I am not giving medical advice here, but more than anything else I think folks who feel safe voting in person should do so to reduce the number of ballots that are being counted by mail — which will take a long time. No matter how you slice it, voting in person is the single best way to ensure your vote is counted and to lessen the burden on election officials who are about to be buried in mail-in ballots as they never have been before.
Reminder: Asking a question is easy, all you have to do is reply to this email and write in. I try to answer a reader question in every newsletter.
A story that matters.
We’re finally getting the crime data to line up against speculation about what’s been happening across U.S. cities this summer. Murders across the United States are up, but the explanations for why and where don’t align with the talking points from the political parties. There’s been a 15% increase in murder nationally but an 8% drop in property crime, while the overall violent crime trend looks nearly identical to last year. In 59 cities with murder data available through July this year, murder is up 28% from 2019. But while more cities are run by Democratic mayors than Republican ones, murder is rising pretty much everywhere — regardless of the political party in control. And the cities that have been the focus of much news attention — New York, Seattle and Portland — are still on pace to have fewer murders than most other big cities when adjusted for population. The FBI has not yet released individual city data for violent and property crime this summer.
Numbers.
90. The scheduled time, in minutes, of tonight’s commercial-free presidential debate.
35. The number of days until election day.
86%. The percentage of voters who say their minds are made up about who they will vote for.
14%. The percentage of voters who say they are still persuadable.
3%. The percentage of voters who said they plan to watch tonight’s debate and are very likely to hear something that will change their vote.
10%. The percentage of voters who said they plan to watch tonight’s debate and are somewhat likely to hear something that will change their vote.
62%. The percentage of Americans who would take a coronavirus vaccine if their doctor said it was safe.
19%. The percentage of Americans who would take a coronavirus vaccine if Donald Trump said it was safe.
26%. The percentage of Americans who get news from YouTube.
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Nearly 200 of the world’s biggest food suppliers have made a pledge to halve their food waste by 2030. Companies like PepsiCo, Unilever and Nestlé Global have signed on to the Food Waste Atlas, a searchable website that maps food waste, and pledged to the 10x20x30 global initiative. Walmart, Kroger and Giant Foods are already in on the pledge. As resources dwindle across the globe, data scientists have shown that about 30% of the world’s food goes unharvested or is thrown away at various points in the supply chain. According to The Washington Post, that waste contributes to 8% of global greenhouse emissions while also depriving millions of hungry people from eating. And yet, we have the most control on a very local level: about 80% of all food waste happens in homes and in consumer-facing businesses like grocery stores and restaurants.