Trump campaign can use this to reset the conversation.
My take on why Trump hasn’t released tax returns is he couldn’t control the narrative. If Hillary is running on the Marxist platform of take from the rich, her voters will not be persuaded one way or the other.
It’s the American undecided who has never filed a Schedule C, etc., that needs some tax law education. The ones who are not taken in by phony Marxist rhetoric. Now the stage is set. If Trump can be very articulate.
I have been somewhat disappointed that the defense of Trump using carry-forward losses seems to be based on a “well it’s legal” meme. There’s a good reason why carry-forward losses are legal ... because it’s also MORAL!
For example, if a company has 10 division, 9 of which make 100 million in profits each, but the 10th one has a net loss of 900 million, how much tax SHOULD the company pay on an annual combined net income of ZERO! And why should it be any different for losses in an earlier year and gains in later years? To do otherwise would mean a tax code that essentially confiscates the money you have rather than, over time, taxes the money you earn.
An entrepreneur who puts his own money at risk will have to pay heavy taxes if that gamble pays off over time. So of course any loss of capital in a bad year should be allowed to offset any increase in capital in future years, so that over the long term the only money that is taxed is the net increase in capital.
That’s a fairly simple concept to explain and to understand, and this would be a good opportunity for the Trump campaign to use to explain this to those who do not, to defend the MORALITY of using carry-forward losses, rather than making sound like he is excusing an unfair loophole based on mere legality.
Also, aside from morality it’s also a sound pro-growth strategy, given that nearly half of all new businesses will fail - and the rest almost always lose money for a year or more before becoming profitable. So if those carry-forward loss provisions were taken away, you’d see a sharp decline in the number of entrepreneurs willing to put a significant portion of their accumulated wealth at risk in order to start a new business, since any losses from failures or even initial-year losses could not be recouped by offsetting those against future profits.
And yes, it is and SHOULD BE different for business owners than for wage earners, since there really is no such thing as negative wages in any tax year.
This is a great opportunity to educate the public on this issue and I truly hope our side starts doing exactly that.