The Enigma of Trump's Taxation Strategy

Since New York's Attorney General (AG) has revealed that Donald Trump overvalued his properties on tax records, while New York State accepted the higher values for tax payments, a common question arises: is Trump entitled to state tax refunds in the hundreds of millions, given that he paid taxes based on inflated values?

Skeptics argue that Trump paid taxes based on the inflated value of his properties, as if he were part of a devoted cult, with his supporters seeing him as cute, but ultimately in need of assistance. However, the evidence suggests the opposite.

Under-Valuing for Tax Purposes

No, Trump was not overpaying taxes by valuing his properties higher than necessary. On the contrary, Trump consistently overvalued his properties for loan purposes but undervalued them for property tax assessment purposes. This strategy led to underpayment of taxes and potential fraud against the taxpayers of New York.

Deceptive Practices and Collateral Loans

When using his properties as collateral for loans, Trump put higher values on these assets. This allowed him to secure more financing than the actual value required. When these loans defaulted, not only did he lose the properties, but he owed more to the lenders because of the inflated values.

ProPublica's Investigation

To support these claims, ProPublica uncovered that Trump maintained two sets of books: one for lenders and another for tax purposes. For example, in December 2011 and June 2012, a prospectus for a loan mentioned that 99% and 98.7% of the Trump Tower's commercial space was occupied according to the “borrower financials.” Yet, in tax filings, the same commercial space reported an occupancy rate of only 83% in January 2012 and the same year later, a 16 percentage point difference, “a very significant difference,” according to Susan Mancuso, a New York property tax specialist.

The discrepancies are indicative of a broader pattern of strategic misrepresentation. By inflating values for lenders, Trump was able to secure loans that otherwise wouldn't have been possible. Subsequently, he would report these inflated values on tax records, knowing they were false. This practice not only cheated the state of necessary taxes but also exposed both the taxpayer and the public in general to financial harm.

Mar-a-Lago, one of Trump's most famous properties, is a glaring example of this under-valuation strategy. It currently has a tax assessment value of $18 million, not hinting at its supposed inflated value during tax payments based on lender reporting.

While the debate about Trump's tax practices remains contentious, it underscores the importance of transparent and accurate tax valuation. Fraudulent practices not only result in financial loss for the state but also erode public trust in the tax system. It is crucial for lawmakers and regulators to implement stronger measures to prevent such tactics, ensuring fair and accurate taxation for everyone.

By examining these issues more closely, we can better understand the complexities and potential frauds in the property tax system and work towards a more robust and trustworthy tax environment.