Photo: Jeff J Mitchell/Getty Images

The Times reports that Trump paid no federal income tax in 10 of the 15 years from 2001 through 2015. In 2016 and 2017, he paid just $750. He paid little tax because his substantial income — including hundreds of millions of dollars in proceeds from The Apprentice — was in many years fully offset by tax credits or losses in other businesses. For example, the Times reports Trump claimed $162.3 million in losses through 2018 from his Doral, Florida, golf resort alone.

Some liberal commentators are jumping on this to say Trump is broke, a shitty businessman who has frittered so much of his wealth away on failing ventures that he is now strapped for cash. The Times story itself is, in certain places, weirdly deferential to the contents of the returns, declaring straightforwardly that when the president used proceeds from The Apprentice to invest in golf courses and hotels, “each new acquisition only fed the downward draft on his bottom line.” But the president obviously isn’t broke, as you can tell from his consumption behavior. He owns several large homes and resorts that he uses as his own personal play spaces. He self-financed a substantial chunk of his 2016 presidential campaign. Before he became president, he used a Boeing 757 as a private jet. There’s a reason only very rich people do these sorts of things: If you’re poor, you can’t afford to do them.

So if you are presented with a tax document saying the president had zero net income in a given year, you should take it seriously, but not literally. There are all sorts of reasons why a person like Trump whose true economic income is very high might show a much lower income on a tax return. Some of those reasons have to do with perfectly legal tax avoidance strategies. Others have to do with criminal tax evasion. Whatever the reasons in this particular case — and prior reporting from the Times gives us reason to suspect that Trump’s tax-planning strategies are not entirely on the level — he isn’t broke, he’s rich, and he didn’t pay as much tax as he should have.

It is important to make this distinction because Democrats will have to pick a message about Trump’s light tax bills: Do they show him to be a terrible businessman who loses lots of money, or do they show him to be shielding so much income from federal income tax that he’s paying less than lots of middle-income workers? These explanations are not mutually exclusive — Trump has led a lot of businesses that have ended in bankruptcy in the past; some of his financial transactions over the last decade suggest an increasing need to lay his hands on cash. I’m not claiming he’s an especially good golf club operator — but the second explanation is clearly in play and is more politically explosive.

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Tim Miller, the former Jeb Bush aide who now runs the Republican Voters Against Trump PAC, talked with me about stop-Trump work he did for Our Principles PAC during the 2016 primary and how poorly messages about Trump being bad at business tested in polling.

“It just didn’t land at all,” he said, describing the response from poll respondents. “As far as they’re concerned, he’s a rich guy. He lives the lifestyle of a rich person. Rappers rap about how he’s rich, his whole brand is that he’s rich. So this idea that he’s actually broke or that he’s actually a bad businessman just didn’t sell with anybody.”

Of course, Trump inherited a huge amount of wealth, which could explain a lot of his consumption. But his inheritance, while huge, wasn’t huge enough to explain the enormous losses we already knew about Trump claiming on his taxes during his financial struggles in the 1990s. His tax returns said he lost more than a billion dollars during this period, which was before his father even died. He didn’t have enough inherited wealth to lose that much wealth, so he must have either had huge income prior to the huge losses or the losses must not have been descriptive of his true financial performance.

I think the respondents to Miller’s polls hit on a sensible observation: Trump’s lifestyle simply does not look compatible with the idea that his businesses just lose money. He spends so much that he has to have been making profits somewhere to finance his activities. And it’s important to admit that because it sets up a potent argument against him: There he is, rich guy, making money, by his own account awesome at business — and he’s paying less income tax than you. How could that possibly be fair?

If Trump really was as shitty at business as liberals like to say then it would be perfectly fair for him not to pay income tax — no income, no income tax. It’s more accurate and more powerful to say he’s a plutocrat with a high income who manipulated the tax code in a way that was unusual even for a very rich person, and who has used his power in office to make the tax code even more favorable to rich people like him. That’s the key lesson to draw from his low tax bills.

No, Trump Isn’t Broke. He Just Doesn’t Pay Enough Taxes.