Editor's Note: (Edward J. McCaffery is Robert C. Packard trustee chair in law and a professor of law, economics and political science at the University of Southern California. He is the author of "Fair Not Flat: How to Make the Tax System Better and Simpler" and founder of the People's Tax Page. The opinions expressed in this commentary are his own. View more opinion at CNN.)
(CNN) "I know our complex tax laws better than anyone who has ever run for president and am the only one who can fix them. #failing@nytimes" -- Donald J. Trump, via Twitter, Oct. 2, 2016
The never-sleeping folk at the not-yet-failed New York Times on the Trump tax beat are at it again, this time with a lengthy expose on how Jared Kushner, the President's son-in-law, likely paid no taxes from 2009 until 2016, at least.
This comes on the heels of the reporting, published less than two weeks ago, on how Fred Trump, Donald's father, engaged in aggressive tax planning with his son starting when Donald was as young as 3. It continued over decades, to avoid more than $400 million in taxes, per the Times' analysis. And those two reports followed the bombshell reporting from October 2016 -- to which Trump was responding in the tweet above -- that Trump had used losses, which we later learned came from other people's money, to avoid paying any tax on almost $1 billion in income for up to two decades.
The most recent piece on Jared's non-taxpaying is once again lengthy and detailed, turning on tax-law intricacies such as depreciation deductions, the income tax treatment of debt, Section 1031 "like kind" exchanges, and more. The New York Times article leaves little doubt that Jared's tax-saving techniques were legal. Cue up the band to sing odes to Jared's genius, which is precisely what Rudy Guiliani said of Donald two years ago, after the first Times story broke: "The man is a genius, he knows how to operate the tax code for the benefit of the people he is serving."
But the legality of Jared's tax planning is not a defense of Trump. It is a damnation of him.
The fact is that it has long been perfectly legal for billionaires like Trump and company to pay no taxes. Some of Fred's tactics likely crossed lines of propriety, and, without seeing Donald's tax returns, we can't tell whether there might be illegalities lurking there, too. But, by the third generation represented by Jared and his wife, Ivanka Trump, the Trump clan has seemingly entered the ranks of fully legal tax avoiders. Good for them.
Bad for the rest of us.
For another fact is that it is perfectly illegal for the rest of us, working Americans, not to pay taxes. Those of us who get regular paychecks pay taxes on the first dollar we earn. Our income taxes are taken from our paychecks before we even get to see any money.
When it comes to tax time, there are few if any deductions for us to take. Our wages are taxed at the higher, "ordinary" rates, not the lower "capital gains" ones, because most of us don't have any capital gains. And this is the way it has to be, for if the rich like Jared and his father-in-law are not paying any taxes, then the rest of us have to, because the government still wants lots of money to spend.
And therein lies the rub. Trump said -- promised? -- that he would fix all this. We're still waiting on that promise. The Tax Cut and Jobs Act of 2017, Trump's one major legislative accomplishment, was mainly a corporate tax rate cut, combined with a slashing of the gift and estate tax, and very modest tax breaks for individuals. Far from using Trump's knowledge of tax tricks to shut them down, Republicans added last-minute provisions to benefit Trump and friends.
And Trump and his merry band of tax cutters are still at it, proposing Tax Cuts 2.0 featuring more breaks for the wealthy, who need them least.
Maybe Rudy Guiliani was right. Maybe Donald Trump is indeed a genius, at least when it comes to avoiding taxes, having learned his craft in the nursery from Fred. And maybe Trump "knows how to operate the tax code for the benefit of the people he is serving." Trump may know how to operate the tax system for others, but he is not doing that. He is continuing, even as President, to operate it for himself. The rest of us have to keep working, and paying taxes, and waiting for some fix to come.