James B Stewart writes: Now we know: Donald J. Trump racked up losses so huge in the early 1990s that he wouldn’t have had to pay federal or New York State income tax on nearly a billion dollars in income.

None of this seems to have made the slightest dent in Mr. Trump’s opulent lifestyle over the years. At the nadir of his personal financial crisis in the early 1990s, his lenders put him on a monthly “budget” of $450,000 in personal expenses — more than enough to sustain his lifestyle of lavish homes, private jets, country clubs and golf courses — even as he was using the tax code to avoid paying any federal income tax.

It’s hard to imagine a starker contrast with the vast number of Americans who struggle to both pay taxes and make ends meet, or a more damning indictment of a tax code that makes that possible.

“If it wasn’t clear before, it is now: The tax code is tilted toward the rich in its statutory framework, its exceptions, and in how it is enforced and administered,” said Steven M. Rosenthal, a real estate tax specialist and senior fellow at the Urban-Brookings Tax Policy Center.

“The American public,” he said, “needs to wake up and send a message that the tax code should be written to generate revenue and enforced to collect it, not to favor wealthy real estate developers and other special interests and their lobbyists.”

If Mr. Trump’s pattern of generating losses and using them to offset other income has continued, as seems likely, it’s obvious why he has not released his tax returns: not because he is being audited, or because the returns are too complicated, but because he hasn’t paid any taxes. [Continue reading…]