Donald Trump’s opponents have posited no shortage of theories for why the New York billionaire would be wary of releasing his tax returns. High on the list? The likely use of extensive tax avoidance strategies.
None other than Trump University — the now-defunct education company named after the tycoon — heartily touts a book explicitly designed to help people do just that: avoid taxes.
The book, “Asset Protection 101: Tax and Legal Strategies of the Rich,” lays out in extensive detail strategies to keep the U.S. government away from the readers’ assets. It minces no words on its intent, at one point telling readers “the topic of asset protection is amazing, cunning, baffling, powerful and tricky.”
Trump wrote the foreward to the book, which was authored by attorney J.J. Childers and published in 2007 under the Trump University banner — part of a series of books promoted as “practical, straightforward primers on the basics of doing business the Trump way — successfully.”
“If you’re not satisfied with the status quo in your career, read this book, pick one key idea and implement it. I guarantee it will make you money,” the presumptive Republican nominee wrote in his foreword.
Trump touts the book — and the others in the Trump University series — as a recipe to riches, calling the contents “the most important and powerful ideas in business — the same concepts taught in the most respected MBA curricula and used by the most successful companies in the world, including The Trump Organization.”
“I created Trump University to give motivated business-people the skills required to achieve lasting success,” Trump wrote.
Asked about the book and Trump’s personal strategies on tax avoidance, Trump’s spokeswoman Hope Hicks pointed to Trump’s tax plan, which is posted on the campaign’s website. As to Trump’s returns themselves, Hicks reiterated that Trump “is undergoing a routine audit and plans to release the returns when the audit is complete.”
The IRS has corrected this false claim: “Federal privacy rules prohibit the IRS from discussing individual tax matters. Nothing prevents individuals from sharing their own tax information.”
The book itself is an in-the-weeds breakdown of strategies to shield income and property from the Internal Revenue Service. With sections including “Tax Secrets of the Wealthy,” “Lawsuit Protection Secrets of the Wealthy” and “Estate and Retirement Planning Secrets of the Wealth,” it’s composed of the ins-and-outs of how, in its words, readers can set themselves up to “pay as little tax as legally possible.”
In short, it’s a certified public accountant’s dream manual.
Or, as the book puts it:
These strategies are one of the primary reasons why people make statements such as, “the rich just keep getting richer.” It’s true. The difference between the rich and others is that the rich take the time to learn the system. Others simply sit around and complain about the system. If you feel like the rules of the game discriminate against one group or another, you’re right. Businesses get far more in deductions than do individuals. If you don’t like the treatment that you’re getting as an individual, it’s time for you to get down to business. You can do that by starting a business so that you can take advantage of the tax secrets of the wealthy.
Get your head around reality
The rich have an army of lawyers and accountants solely focused on taxes. Those lawyers and accountants are paid very well to make sure the rich find as many loopholes as possible to shield their cash and property. And with good reason, according to the book:
Asset protection is the foundation of all wealth building; you must understand it if you are ever to join the ranks of the financial elite.
Prepare for combat
Those lawyers and accountants are there for a reason — to fight. And that, according to the book, is the attitude needed to truly take advantage of a tax code riddled with loopholes. Just remember: do it legally.
If you plan on becoming (or staying) wealthy you must learn to legally combat your tax bill.
Maybe worse than the IRS: While the government is certainly Enemy No. 1 in the book, lawsuits — the kind that can threaten accumulated wealth — come in a close second.
Putting your assets in a position that will leave them untouched by litigation is crucial.
Entire family futures have been put in jeopardy. The worst part is that these lawsuits often could have been avoided with a few simple preventative measures.
Shield your retirement
Or the government will take it: The book goes into great detail on how to structure your savings in a way that will shelter them from future taxes, fees or expenses.
Wealthy families in this country take estate planning seriously because they know how bad government intervention can be. You must adopt this mentality.
Don’t be afraid of the IRS
While the U.S. government certainly isn’t revered in the book, it also goes to great lengths to make clear that readers shouldn’t be afraid. Instead, the convoluted tax code provides a series of advantages — the kinds that should be taken advantage of.
The fact is, you don’t have to be scared of the IRS. Americans have every right — some would say a duty — to pay as little tax as possible.
A business can be one hell of a tax shelter
The chapter titled “The Greatest Tax Shelter in the World: Owning Your Own Business” includes a section on breaks known as like-kind exchanges, or the use of “1031,” as it’s often called, for the section of the tax code where it resides. Use of such strategies is so valuable, it’s a shock they’re legal, according to one passage in the book:
Would you be interested in avoiding paying the tax on the sale of your property completely while maintaining or even increasing your overall net worth? Of course, any wise investor would. Amazingly, this can indeed happen and even better, it is totally legal.
The break allows real estate owners to sell a piece of property and avoid taxes on any capital gains by buying a new one shortly thereafter. Continued use of the break, which basically comes down to swapping properties, would result in deferred capital gains that, if deployed strategically — and repeatedly — by an active real estate investor, could completely avoid taxation.
The tax code is undoubtedly skewed toward easing burdens on small businesses. (Because seriously, what lawmaker is going to vote against a loophole that benefits small business?)
The best advice I can give to anyone looking to keep a larger percentage of their hard-earned money is to do what it takes to own your own business.
Real estate is king
In a passage that lines up rather nicely with Donald Trump’s primary line of business, the book makes clear that real estate — either through rental-income or through appreciation — is a great way to use the tax code to actually build wealth.
There are very few business opportunities that allow you to build wealth without paying taxes and then subsequently pay reduced rates when the time comes to settle up with Uncle Sam. Real estate, however, is a prime exception.
The book, citing Trump himself, makes clear that the tax code favors those in the real estate business. Between strategies like like-kind exchanges and cost segregation, real estate provides ample opportunity to take advantage of the tax code.
Depreciation — the “mother of all tax deductions” could “potentially allow a business owner to deduct up to $108,000 of asset purchases while actually spending little to no money now.”
It’s all on you
Well, technically it’s not (see: lawyers, accountants.) But the key theme of the book is that the tax code is so riddled with loopholes that anyone who doesn’t take advantage is simply leaving money on the table.
As it concludes:
When all is said and done, you have a decision to make. You are the one responsible for what you do with what you’ve been presented. You can go on doing things the same old way, which would produce the same old results. Or you can do things the way millionaires do things.
The book explains why the wealthy, who can afford the high-priced lawyers and accountants, are awesome and everyone else is just a sucker who has to pay their fair share in taxes.
Keep in mind all of these loopholes are 100% legal. What a sanctioned Trump book that brazenly mocks and highlights the separation between the haves and the have-nots shows is how he rarely looks out for the little guy. A common belief among Trump supporters.