Deep in the Heart of Taxes

I've been a big admirer of tax expert David Cay Johnston for years, starting when he was still with the NY Times.  Indeed, he won the Putlizer Prize in 2001 for his  "penetrating and enterprising reporting" that exposed loopholes and inequities in the U.S. tax code.  What I think sets him apart from most people who write on the subject is how he makes something so arcane to be understandable.  Among many things, his explanation of why deficit financing can be a good thing was a thing of exquisite simplicity. 

(Short version: Let's say you were out of work and no money.  You get a great job offer that will pay a great deal of money -- but it's two hours away and you have no way of getting to it.  However, if you got a loan and went into debt so that you could buy a car, then that would allow you to accept the job, earn enough money to pay back the loan, get out of debt and start earning money.  Or you could not go into debt, turn down the job, stay unemployed and have no money.)

He's also long been an excellent investigative reporter and now has his own non-profit journalism organization, DC Report.  And has long been reporting on Trump well-before the White House back in his New York business days, including two books on him, notably The Making of Donald Trump.

Johnston was on A.M. Joy this past Saturday, and what he said will make many people's heart sing, as he discussed the possibility of criminal indictments against Trump.  It was all interesting, but it was the very end that put his predictions on a completely different level from most commentators.

The discussion began because of the recent Supreme Court rulings that allowed subpoenas for Trump to go forward, in particular the one from the Manhattan D.A. Cyrus Vance. 

​“What do you think might be out there?” host Joy Reid asked him.

“Well, Donald Trump has already had two income tax fraud trials by the state of New York and the city of New York,” said Johnston. “They were civil fraud, not criminal fraud. The New York Times in October of 2018, in this brilliant project on Trump’s taxes based on records we know came from his niece — without question, he and his siblings are major-league tax cheats."

He added, ​“What the district attorney is seeking is the business records, the accounting records, the banking records to 2011,” said Johnston. “If those deviate from what Donald trump put on the tax returns, I expect they’ll indict Donald Trump for criminal tax fraud. How quickly it comes depends on how successful Trump’s lawyers are in delaying and using procedure and interlocutory appeals if they don’t like the federal judge overseeing the case — his rulings.”

Joy Reid mentioned that although Trump currently has immunity from prosecution, that will end on January 20, 2021, if he doesn't win.  And she noted that even if the federal government doesn't continue any investigations into prosecuting a former president, that has nothing to do with Vance and New York.

“Right," Johnston replied. "Let’s assume Donald Trump has the audacity to resign as president, Mike Pence sworn in, and Pence pardons [him].  The state charges are completely different. The only involvement in the federal government is challenging to seek his remedies in federal court."  And here is where Johnston added one final comment that few other analysts can make --

"Donald Trump is going to be indicted if the business records do not match up. They won’t match up. Trust me. I have a lot of his records. They won’t match up.”