Ever since he began his presidential campaign, Trump has been asked by reporters why he hasn’t produced his tax returns. Candidates have always followed this ritual, some delaying as Mitt Romney did , but all coming through. Clinton has released 38 years of her tax returns. Trump’s excuse for months was that he was being audited and couldn’t interrupt the process. However,The Internal Revenue Service confirmed that an audit was no reason for not sharing his returns. Hillary Clinton asked at her rallies, and during their first debate on September 26, “What are you hiding, Donald? “ She and the 84 million people watching the debate were to learn the answer to that basic question on Saturday night , October 1, about nine o’clock when The New York Times posted a blockbuster story they had uncovered by accident.
The revelation of Trump’s tax returns had a mysterious, dramatic beginning in the third floor mail room of the Times where employees’ open mailboxes are stacked. On Friday, September 23, Susanne Craig, who likes to use snail mail, was checking her box where she saw a manila envelope, postmarked New York, NY , with a return address of The Trump Organization. She wrote later, “My heart skipped a beat.” Craig had been writing at length about Trump’s finances and was eager to see his actual returns. When she opened the envelope, she was amazed to find what appeared to be three pages from Trump’s 1995 tax records, with detailed figures that revealed his tax strategies.
She immediately walked over to the desk of David Barstow , her teammate in the search for Trump’s tax returns, and a three time Pulitzer Prize winning investigative reporter. He was on the phone and she waved the tax documents in front of him. He hung up and they then took two other colleagues, Megan Twohey and Russ Buettner, into the nearby conference room. Craig describes their battle plan. “We obsessed over the documents, the envelope, the postmark, the date . We even checked every other mail box on the floor in case the tipster had mailed additional documents to any other reporter. Next, we set out to develop a portrait of Mr. Trump’s finances from the period on question, to see if we could support what the documents showed –that he had taken a huge loss in 1995 that could have allowed him to avoid paying federal income taxes for nearly two decades.”
The reporters were skeptical as they examined the records. They were signed by Marla Maples, his wife at the time and by Donald Trump in his distinctive signature of huge, jagged letters. They felt they needed more evidence and hired tax experts to take them through the math. They also researched the 1995 tax code. Then Barstow went to Florida to find Jack Mitnick, the retired accountant who had prepared and signed the tax returns. Mitnick was reluctant to meet at first, but agreed to meet in a bagel shop. In conversation, he agreed that the records were authentic. They also dug more into Trump’s finances at the time . By Saturday, they were ready to go to the Trump camp with their findings. Trump, through his spokeswoman, neither challenged nor confirmed the tax records. Trump threatened them with legal action if they were to publish them. They returned to The New York Times and the four reporters were in the newsroom when the story was published.
During the September 26th debate, Clinton had posed the possibility that Trump had taken advantage of real estate loop holes in the tax code to avoid paying any taxes at all. He quickly leaned in with a smile and said, “That makes me smart.” Clinton immediately countered by listing how federal tax dollars are spent. “For veterans. For infrastructure. For defense. For education. For the disabled.” After the debate, the “smart” line became a major topic for discussion by media commentators and Op Ed writers.. They wondered if avoiding taxes would be seen by viewers who pay their taxes as “smart”. Or as negligent and shirking civic responsibility. And did that make them “stupid for paying their taxes?”
Sunday morning, October 2, Americans awoke to newspaper headlines and TV coverage of the stunning story that Donald J. Trump had paid no taxes for nineteen years. A real estate legal loop hole was the way he was able to declare a $916 million dollar loss on his 1995 federal income tax return. That allowed him to avoid taxes for the next eighteen years.
The Trump campaign immediately began a concerted effort to translate these facts into different positive “spins”. He had already said he was “smart” when he evaded taxes. Now, his campaign issued their rationale: “ Mr. Trump had a fiduciary responsibility to his business, his family and his employees to pay no more tax than legally required.” Legal experts scoffed at that argument. Richard Painter, professor of corporate law at the University of Minnesota, said, “There is no such thing as a fiduciary duty of a business man to oneself. That’s called greed.”
Newt Gingrich, Rudy Juliani and Chris Christie, Trump’s favorite surrogates stormed the Sunday talk shows to proclaim that Trump was a “genius” for using the tax code to survive almost a billion dollars in losses so he could rebuild his businesses and create jobs for millions of people. The three were asked by TV hosts if this would hurt Trump’s campaign when American men and women — who had been paying taxes for years —- would see his actions as “unfair” or “not civic minded”? They stuck to their insistence that he was a” genius” and it showed his “business acumen” . Trump himself bragged that he was indeed “brilliant” at his rallies, and since he knew so much about the tax code, he could “fix it” when he became president.
Hillary Clinton unleashed an avalanche of criticism at Trump on Monday before a crowd of over a thousand in Toledo Ohio. “He abuses his power, games the system he claims he will change, puts his own interests ahead of the country’s. It’s always Trump first, and everyone else last.” Her speech was targeted to the economy, thus a natural to contrast Trump’s behavior with that of most Americans. She began, “Toledo is the kind of place where people work hard, look after one another and yes, pay their taxes, “ And then she referred to the defense his surrogates were giving. “What kind of a genius loses a billion dollars in one year?” This, of course, struck at his claim to be a multi –billionaire. If Trump ever releases his tax returns, his total financial worth would also be revealed.
By Thursday, October 6, national polls showed Hillary Clinton leading at five to ten points over Donald Trump among likely voters. Swing states also showed her gaining ground, in Florida, Pennsylvania, New Hampshire , Michigan, Colorado and North Carolina. The New York Times gave Clinton an 81 % projection of winning the election on November 8 and becoming the first woman president of the United States.