Mr. Trump’s lawyer said, probably accurately, that such complaints usually are settled as a civil matter with the Internal Revenue Service for the reasons alluded to above. The IRS cares mainly about getting maximum money at least cost for its enforcement efforts. Not so elected officials such as Mr. Vance and Ms. James. If the prosecution is a giant net loser financially for the state of New York, that’s fine with them.
If the charges are right, among the expenses Mr. Trump picked up for his employees to maximize the bang for his compensation buck were school tuition, a company Mercedes, and free apartments for employees and their family members.
Mr. Trump would have dispensed these goodies because in New York City, where the top cumulative income-tax rate is 52%, he could cut in half the cost of providing after-tax compensation to a high-level employee.
Tax systems, which both fund the government and shape the incentives that drive the private economy, are too important not to be regarded with extreme practicality. Every tax system operates on the margin between people’s desire to live within the law and their incentive to cheat, which smart tax designers keep in mind.
You will be right to ask: If Mr. Trump is now to be held to this standard of tax honesty, will others? When and if a grand jury gets around to indicting him for offenses reportedly related to how buildings were valued for tax and banking purposes, the same questions will simmer. As the
New York Times reported in 2018 after
digging through a decade of Trump family tax data, the Trumps use the same appraisers, tax lawyers and accountants that other New York real-estate families use, albeit the others are not so imprudent as to put their heads in the tiger’s mouth by contesting with the nation’s political class for its top prize.
It wouldn’t be right to leave this subject without a passing note. On the same behavior that is rightly treated as offensive if Mr. Trump does it, Congress built the distortion that many diagnose as a root cause of our healthcare-financing maladies: employers being allowed to hand out health coverage to employees as untaxed compensation, which ends up inflating the price of healthcare and disproportionately benefits wealthier taxpayers.
The likelihood that Mr. Trump, for all his incentive to signal otherwise, would run for president again always seemed to me low and seems lower now. His investment in the stolen-election lie struck me as the opportunism of the checkers player, without a plan. He realized if he backpedaled and ran up the white flag his audience would drift away. His ability to reward and punish by mobilizing his supporters would disappear. His way into the minds of 40% of voters would be a power officeholders and office-seekers would no longer have to fear (it’s eroding anyway thanks to the social media freeze-out). I expect when Mr. Trump enters settlement talks with his latest legal assailants, he intends this ability to make trouble or refrain from making trouble will be a bargaining chip on