White House economic adviser Larry Kudlow on Wednesday night attributed President Trump’s success on taxes to his experience in limiting his business tax liability.
“As a businessman, he knows a lot about taxes,” Kudlow said. “He’s been dodging them for all these years — legally. And he would show us in his offices stacks of papers and what he had to do.”
Kudlow made his remarks at a dinner hosted by the conservative American Spectator magazine on Capitol Hill in the context of a discussion about the corporate tax rate reduction enacted by Trump and Republicans. He argued that, while corporations nominally pay taxes, ultimately it is individuals and consumers that bear the burden of corporate taxes.
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The former CNBC host, who is Trump’s National Economic Council director, said that Trump’s business experience gives him greater insight into the economic costs of taxes and regulations.
Trump has engaged in extensive and aggressive tax planning throughout his career. Breaking with precedent for presidents, he has not released his tax returns, making it difficult to know which tax strategies he has used.
But his financial disclosures indicated that his business, the Trump Organization, comprises hundreds of separate tax entities that could help minimize his taxes. He's also exploited conservation tax breaks for his properties.
And a copy of his 1995 tax returns leaked to the media revealed that he suffered a $916 million loss he suffered on his real estate business, a loss that provided him deductions that likely allowed him to avoid taxes for years.
Trump has boasted about his ability to avoid taxes.
Hillary Clinton alleged in a 2016 presidential debate that Trump hadn't released his tax returns because they would show that he doesn't pay taxes. Trump responded: "That makes me smart." He clarified, though, that he has paid taxes.
A recent New York Times investigation also revealed that Trump's father, Fred Trump, used tax schemes to pass wealth to Donald and his siblings while bypassing estate taxes. The publication concluded that Trump gained more than $400 million from his father's real estate empire, funneled through shell companies.
During the debate over the tax legislation, Democrats criticized the bill on the grounds that it would likely cut taxes for Trump's own business and family. The law lowered rates on businesses and individuals, while also creating a new special tax break for businesses whose income flows straight through to owners' tax returns, as many of Trump's do. It also increased exemptions to the estate tax.