Robinson: One of GOP tax bill’s biggest winners is Trump

Along with the reduction in his tax rate, there are breaks tailored to Trump’s real estate empire.

By Eugene Robinson

One of the biggest beneficiaries of the massive, slapdash tax bill that President Trump and Republican lawmakers celebrated at the White House on Wednesday will be, wait for it, President Trump. What a coincidence!

The rest of Trump’s wealthy family will benefit lavishly as well, including his son-in-law and all-purpose adviser Jared Kushner. And, of course, it’s not a coincidence at all. The chance that this president would preside over a revision of the tax code without lining his own pockets was zero. Anyone who believed Trump’s claim that the tax bill would “cost me a fortune” hasn’t been paying attention.

It is not possible to calculate precisely how much money the president will save, since he — unlike all other recent presidents — refuses to release his tax returns. But the figure is surely in the millions, assuming Trump is anywhere near as wealthy as he claims. His extended clan will have plenty of liquidity for Donald Jr. and Eric to jet off to Africa and kill more leopards and water buffaloes; for Jared and Ivanka to disappear on ski trips whenever they need to claim deniability regarding the latest administration outrage; and for the president himself to consume as many Big Macs, Filet-o-Fishes and chocolate shakes as his constitution can bear.

Trump claims to be worth $10 billion; Forbes estimates his wealth at $3 billion, and some analysts believe the true figure is lower. Any way you look at it, however, he’s a wealthy man — and the tax bill, which awaits only Trump’s signature to become law, is designed to make the very rich even richer.

Like all 1-percenters, Trump will benefit from the lowering of the top tax rate from 39.6 percent to 37 percent. But that’s just for starters. As is always the case with the tax code, the devil is in the details.

Trump conducts his business affairs through hundreds of “pass-through” companies whose income is taxed at the personal rate, not the corporate rate. The House wanted to dramatically slash the pass-through rate across the board, but the Senate initially balked. At the last minute, however, the Senate wrote into the final bill a 20 percent deduction for pass-through income. If a taxpayer had, say, $100 million in pass-through earnings, he or she would only be taxed on $80 million; the rest would be tax-free.

At first, senators sought to limit this sweetheart deal to companies with large numbers of employees or high payrolls — unlike Trump’s pass-through businesses, which are mostly paper entities. But the final legislation gives the full deduction, regardless of the number of employees, to pass-through companies that own a lot of depreciable property, such as commercial real estate. Which just so happens to be the president’s livelihood.

It would be hard to craft a measure more tailor-made to enrich Trump and his family. If he wanted to avoid even the appearance of corruption, of course, Trump could decline to take this tax break or donate an equivalent amount to the Treasury. Somehow I doubt either of those things will happen.

Trump also gets to continue using a frequently abused tax loophole called “like-kind exchange.” Usually, if you sell a piece of property at a profit, that profit is considered income and is taxed. Creative accountants and tax lawyers came up with ways to structure sales so that they technically qualified as trades, meaning that as far as the IRS was concerned, there was no income to tax. This practice is now ending for all types of property — except real estate. Another coincidence, I’m sure.

Oh, and most businesses will be negatively affected by a measure capping the amount of interest expenses they can deduct — except real estate investors and hotel operators, which are explicitly exempted. If this were a movie, lobbyists and lawmakers would have hammered out this last provision in a back room at the Trump International Hotel.

On the flip side, Trump’s ability to deduct the state and local taxes he pays in New York would be drastically limited. But that is nothing compared to the likely upside.

Join with me in a thought experiment. Imagine that the legislature of some other country — Brazil, say, or Mozambique, or Thailand — decided to rewrite the tax code, with no public hearings or expert testimony, in a way that benefited the rich overall, with maximum financial gain for businesses like that of the sitting head of government. What would you say?

I’m pretty sure you’d use the word corruption. And you would be right.

Eugene Robinson’s email address is eugenerobinson@washpost.com.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Opinion

toon
Editorial cartoons for Friday, March 29

A sketchy look at the news of the day.… Continue reading

Initiative promoter Tim Eyman takes a selfie photo before the start of a session of Thurston County Superior Court, Wednesday, Feb. 10, 2021, in Olympia, Wash. Eyman, who ran initiative campaigns across Washington for decades, will no longer be allowed to have any financial control over political committees, under a ruling from Superior Court Judge James Dixon Wednesday that blasted Eyman for using donor's contributions to line his own pocket. Eyman was also told to pay more than $2.5 million in penalties. (AP Photo/Ted S. Warren)
Editorial: Initiative fee increase protects process, taxpayers

Bumped up to $156 from $5, the increase may discourage attempts to game the initiative process.

Schwab: Who was Langerhans? And when’s the ferry to his islets?

The Herald’s resident retired surgeon slices into the anatomy of the etymology of our anatomy.

Comment: Cervial cancer treatable; if you’re screened for it

A screening for cervical cancer can detect cancerous or precancerous cells and direct treatment.

Comment: Framers gave us Goldilocks Constitution; let’s use it

It was meant to be resilient, not perfect, but it has to be used as designed toward workable solutions.

Comment: GOP in Congress isn’t fighting crime; it’s arming it

Budget cuts to the FBI and ATF and other riders have made it easier for criminals to get firearms.

toon
Editorial cartoons for Thursday, March 28

A sketchy look at the news of the day.… Continue reading

Washington state senators and representatives along with Governor Inslee and FTA Administrator Nuria Fernandez break ground at the Swift Orange Line on Tuesday, April 19, 2022 in Lynnwood, Washington. (Olivia Vanni / The Herald)
Editorial: Community Transit making most of Link’s arrival

The Lynnwood light rail station will allow the transit agency to improve routes and frequency of buses.

Protecting forests and prevent another landslide like Oso

Thank you for the powerful and heartbreaking article about the Oso landslide… Continue reading

Boeing’s downfall started when engineers demoted

Boeing used to be run by engineers who made money to build… Continue reading

Learn swimming safety to protect kids at beach, pool

Don’t forget to dive into water safety before hitting the pool or… Continue reading

An image of Everett Mayor Cassie Franklin is reflected in a storefront window during the State of the City Address on Thursday, March 21, 2024, at thee Everett Mall in Everett, Washington. (Ryan Berry / The Herald)
Editorial: State of city address makes case for Everett’s future

Mayor Franklin outlines challenges and responses as the city approaches significant decisions.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.