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Ron Insana: Trump Isn't a 'Genius' for Using Business Losses to Cut Tax Bill

Image: Ron Insana: Trump Isn't a 'Genius' for Using Business Losses to Cut Tax Bill

(AP Photo/John Minchillo)

By    |   Monday, 03 Oct 2016 10:19 PM

 

CNBC commentator Ron Insana says, despite Republican presidential nominee Donald Trump’s proclamation to the contrary, it doesn’t take a “genius” to use business losses to cut your tax bill.

“There is no genius involved in using business losses to reduce one's personal tax bill,” Insana wrote for CNBC.com. “However, it does take a special kind of genius to LOSE a billion dollars and claim one is a business success,” Insana wrote.

 

Trump's decision to take a $916 million loss on his 1995 income tax return showed his business acumen and "genius" at figuring out how to minimize his tax bill, two of the Republican presidential candidate's advisers said, Reuters reported.

"This is a perfectly legal application of the tax code. And he would have been fool not to take advantage of it," said Rudy Giuliani, the former New York mayor who is one of Trump's advisers.

Speaking on the ABC program "This Week," Giuliani said that as a business owner, Trump has a "fiduciary duty" to the investors in his real estate company to maximize profits.

 

Trump said on Monday he "brilliantly used" U.S. tax rules to his advantage in trying to limit the amount he paid in taxes, arguing it helped him survive a difficult period in the real estate market, Reuters reported.

"I was able to use the tax laws of this country and my business acumen to dig out of the real estate mess ... when few others were able to do what I did," Trump told a crowd in Pueblo, Colorado.

It was Trump's first extended comments since a New York Times report said he had claimed a $916 million loss on his 1995 tax returns, which experts said might have allowed him to avoid paying federal income taxes for 18 years.

“Trump, and his surrogates, has said that by lowering his personal tax bill, maybe as low as zero dollars paid in federal and state income taxes, that he was serving his constituents. That's hogwash! Horse hockey! Bull----! Mr. Trump does have a constituency … but it is a constituency of one … himself,” Insana said.

“Reducing his personal tax bill does absolutely nothing for any business he may be running, public or private, and more than likely the losses he generated to reduce his personal tax liability very likely came at THE EXPENSE of shareholders, bondholders, employees and vendors,” Insana said.

“Multiple bankruptcies, billion dollar losses, alleged misdirection of income to charitable foundations and, published reports suggesting potential further abuses of the tax code, are not the characteristics normally ascribed to a great business builder,” Insana wrote.

“While it's true that the deductions taken by Mr. Trump are legal under the code, you rarely hear names like Gates, Jobs, Buffett, Bezos, or other builders of great companies, and great wealth, using business losses to reduce their personal tax bills,” Insana wrote.

“They also enriched their investors and employees as they, themselves, got fabulously wealthy. Not so, Trump.”

 

Newsmax Finance Insider Megan McArdle explained that one way to look at the situation is that Trump was just following the game rules of the time.

"If Trump managed to pay no taxes for years, the most likely way he did this was by losing sums much vaster than the unpaid taxes. This is fair, it is right, it is good tax policy," she wrote. 

"There are many valid indictments of Trump as a candidate and as a businessman. But on the charge of unseemly tax avoidance, if this is all the evidence we have, then the grand jury would have to return … no bill." 

 

(Newsmax wire services contributed to this report).

© 2017 Newsmax Finance. All rights reserved.

   
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CNBC commentator Ron Insana says, despite Donald Trump's proclamation to the contrary, it doesn't take a "genius" to use business losses to cut your tax bill.
ron insana, donald trump, business loss, tax bill
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2016-19-03
Monday, 03 Oct 2016 10:19 PM
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