Scandal continues to follow Trump. On one hand, the Mueller Report is completed and the US Congress is not satisfied with the four-page summary Attorney General William Barr sent to both Chambers, demanding access to the details. To support this demand, social media users made the hashtag #ReleaseTheReport a trending topic.
However, even before the report follows up on parliamentary investigations, the testimony of Trump’s former lawyer, Michael Cohen, as well as an existent New York Southern District investigation have addressed Donald Trump’s taxes. In his testimony in front of Congress, Cohen said that Trump’s businesses operated on the margins of the law to avoid paying taxes and manipulated financial reports to obtain credits or when applying to access fiscal or legal benefits.
In the last two years, the New York Times has published at least two reports (the first of them during the election campaign) in which a copy of the statement and reliable sources confirm indications that the Trump organization is far from transparent and law abiding; and even that, as a result of these manipulations, it has not paid taxes. Indeed, Trump himself has excused from the customary duty of disclosing tax returns arguing under lawyers advice he can’t do it since he is under audit, a claim he just made in the past few days as a seating president when asked about Congress desire to investigate his tax returns.
In that direction, the House of Representatives has called the US Internal Revenue Service (IRS) to deliver Trump’s last six tax returns to the Committee investigating him. It is an effort to legally obtain access to these documents. Although not required by law, all presidents since the sixties have customarily revealed this information to the public during their presidential election campaign.
Tax returns are also an x-ray of the contributor. There is information in its multiple annexes about connections with partners and financiers, as well as conflicts of interests. Furthermore, this documentation could be contrasted with other public documents or bank statements emitted to determine the veracity of the tax declaration, which is presented to the tax authority under oath and subject to penalty of perjury.
It seems that a fraction of the Democratic Party will not be put to rest until it are able to prove Trump’s characterization as a subject tied to corruption and questionable business people, probably in Russia and other countries. Of course, Trump will do whatever he can to avoid this; already the White House Counsel announced an incessant legal battle to prevent the IRS from offering those documents to Congress.
While the investigation into Trump’s tax returns carries on, there is another fiscal conflict that impacts the economy and life of the US population. A couple of weeks ago, the Department of the Treasury acknowledged a significant growth in the fiscal deficit. The projection that begins to climb above 4% of GDP in the short term, as a result of the indiscriminate tax cuts that the Trump administration made in its first year of government, with support of the parliamentary majority he had in both Houses. Analysts warn that the impact of those tax cuts do not seem to point towards a growth tendency greater than the impact they had last year. Therefore, collecting more taxes from a broadening base through economic expansion does not seem likely.
Income from corporate taxation has fallen by more than 17%, without substantial impact in terms of investments, employment and growth. In fact, the statistics bureau of the Department of Labor reported that the annual number of new private sector jobs inserted into the economy is lower during the Trump administration than the annual average added in that same sector by the Barack Obama administration’s second term. For example, for the first two years of the Trump administration—and under the influence of the 2017 tax cuts—the private economy added on average 175 thousand jobs a month, reaching 217 thousand new jobs in 2018. On the other hand, the average of new jobs added during Obama’s administration was 217,000 in 2017 and 208,000 in 2016, after a record 254 thousand new positions added per month in 2015. It should be remembered that during the Obama administration the fiscal deficit fell to 2.8% of GDP as of 2015, and grown to 4.3% since Trump’s inauguration.
In a few words, the numbers prove that Trump’s tax cuts to the corporate sector and those with high income have not translated into greater economic and employment growth. Real wage income increased only 3% (slightly above inflation), and this tax cut did not provide a better compensation for the working class or the lower income sectors. All this at an immense fiscal cost, which has facilitated, along with the deficit, a new tendency for concentration of wealth at the top of the socioeconomic pyramid.
In summary, Trump has some explaining to do. First, he should dispel the mystery of his tax returns (and whether or not he actually paid taxes, consistent with his wealth range). He should also inform on the real impact—meaning, the lack of benefits—of his tax cuts policy to both the corporate and most favored sectors of the population. Until both enigmas are resolved with reliable information for the US public opinion, the scandal will not leave the President alone.