IT is a serious error of judgement to underestimate Donald J. Trump, the 44th President of the United States of America. He is the undisputed champion of disruptive aggression. He has his new Treasury Secretary, Steven Mnuchin firmly in his corner. They both sang from the same song sheet when they addressed the retired partners of KPMG who are still awaiting their gratuity and pension. The event was given prime time live coverage all over the United States of America and beyond just to drive home the powerful message that clarity of purpose is anchored on the robustness of vision. According to the President:
“The retired partners of KPMG stand four square with us and they have endorsed our projection that the radical tax cuts which we propose combined with deregulation will double economic growth in the U.S. In order to boost the economy and create millions of new jobs, we shall implore Congress to pass a serious package of reforms by August 2017. Under President Barack Obama, the economy underperformed. Disguised unemployment was all over the place. They were fiddling the figures and playing games with phoney statistics. We are going to ensure that America First makes the U.S. more competitive and able to grow more strongly. Our KPMG retired partners along with more than 100 tax specialists in the Treasury have been working round the clock. It bears repetition that the number one item on our agenda is the economy and the first issue to be addressed is growth. The tax experts are adamant the first most important thing that will impact growth is a tax plan. We are committed to pass tax reform. It will be very significant. It is going to be focused on middle income tax cuts, simplification and making business tax competitive with the rest of the world, which has been a big problem and a reason why companies are leaving and cash is sitting off shore. We want to get this done by the August recess.”
It was typical of Donald Trump to dominate proceedings by insisting on reminding the press that regardless of their hostility: “We intend to implement a wide-ranging overhaul of economic policy. We shall shake the economy out of several years of mediocre growth. Our plan is to double economic growth rate in the US from 1.6 per cent in 2016 to more than 3 per cent by the end of 2018. If you look at long term growth, we have underperformed where we need to be. We believe that we can be competitive and get back to sustained growth of 3 per cent or more.”
By Sunday 13th February 2017, in anticipation of President Trump’s return from his Mar-a-Lago Club, Palm Beach, Florida where he has been spending every weekend since his inauguration, Washington D.C. was blazing with news that the media had a huge scoop in the bag. It was not until Monday that the mystery scoop was “scooped”!! It was MSNBC’s Rachel Maddow who delivered advance notice that on Tuesday evening she would divulge Donald Trump’s 2005 tax return. During the presidential campaign Trump had promised to release his tax returns – which every American presidential nominee had done for several decades and had become a routine precedent, only to turn round and insist that he would do so only after the conclusion of “a routine audit”. Thereafter, both the President and his spokesman Sean Spicer had been dragging their feet. It seemed Maddow was about to hold their feet to the fire.
Right from the inception of Trump’s campaign for the presidency of the United States of America, his tax returns have generated intense interest amongst the generality of the public. The retired partners of KPMG volunteered their services to assist Donald Trump without demanding any fee when in October 2016, the New York Times anonymously obtained a single year’s tax return that showed that Trump declared a $916 million loss and listed tax benefits he used after a turbulent financial period (four bankruptcies !!) in the early 1990’s. Citing non-KPMG tax experts, New York Times speculated that Trump could have used his massive loss to cancel out an equivalent amount of taxable income (losses carried forward) for nearly two decades. Since his election on 8th November 2016 Trump and his aides have been signalling that there was no need to release his tax returns. Maddow was all over the place jubilating and proceeded to disclose that her source was Pulitzer Prize winning investigative reporter David Clay Johnson who in turn claimed that Trump’s tax document had been dropped anonymously into his mailbox.
Three hours before Maddow was scheduled to go on air, the White House played its Trump card – just to spoil the party by issuing the following press statement: “You know you are desperate for ratings when you are willing to violate the law to push a story about two pages of tax returns from over a decade ago. Before being elected President, Mr. Trump was one of the most successful businessmen in the world with a responsibility to his company, his family and his employees to pay no more tax than legally required. That being said, Mr. Trump paid $38 million dollars even after taking into account large scale depreciation for construction, on an income of more than $150 million dollars, as well as paying tens of millions of dollars in other taxes such as sales and excise taxes and employment taxes and this illegally published return proves just that. Despite this substantial income figure and tax paid, it is totally illegal to steal and publish tax returns. The dishonest media can continue to make this part of their agenda, while the President will focus on his, which includes tax reform that will benefit all Americans.”
The White House statement came with a supplement provided on Twitter by Donald J. Trump himself: “Does anybody really believe that a reporter, who nobody ever heard of, “went to his mailbox” and found my tax returns ?” In any case, what was being bandied around was based on only two pages of an IRS [Inland Revenue Service] 1040 form. The information provided only partial disclosure rather than the full picture for 2005.
(To be continued).
- Bashorun Randle is a former President of the Institute of Chartered Accountants of Nigeria (ICAN) and former Chairman of KPMG Nigeria and Africa Region.