Hillary Clinton’s campaign cannot contain its delight at The New York Times’s revelation on Saturday that Donald Trump reported a loss of nearly $1 billion on his 1995 tax return, which has possibly given him a deduction so large that he hasn’t paid any personal taxes since. “There it is,” Clinton campaign manager Robby Mook chortled in an official statement. “This bombshell report reveals the colossal nature of Donald Trump’s past business failures and just how long he may have avoided paying any federal income taxes whatsoever. In one year, Donald Trump lost nearly a billion dollars. A billion. He stiffed small businesses, laid off workers, and walked away from hardworking communities.”
Mook’s statement foreshadows how the Clinton campaign will exploit this news by portraying Trump as a failed businessman who has hurt ordinary people with his financial shenanigans. This is an especially potent attack line because it cuts to the root of Trump’s appeal.
Americans are willing to believe the worst about Trump, except in one area: his supposed business acumen. Trump is one of the most unpopular presidential candidates ever, with 60 percent of the public thinking he’s biased against women and minorities and 61 percent believing that he’s not qualified to be president. But these numbers are offset by the fact that a majority of the public buys into the false impression that his wealth is self-made. This is particularly true among his base. Only 42 percent of Republicans believe Trump was born into wealth (which he was). The idea of Trump as a self-made billionaire helps explain his enormous popularity with non-college educated white men.
Trump’s claims to be a business genius are at the heart of his pitch. As he told a crowd in Iowa in January, “All my life, I made money. I have always been good at making money. All my life, I did well... My whole life, I have been greedy, greedy, greedy. But now I want to be greedy for the United States.” But what happens to Trump’s remaining popularity if the Clinton campaign can persuasively argue that his charmed financial life owes more to tax avoidance than shrewdness?
Hitherto, attempts to shake belief in Trump’s business competence haven’t proved successful. As The Washington Post’s Dave Weigel and Jenna Johnson noted on Sunday, Barack Obama’s 2012 campaign successfully painted Republican rival Mitt Romney as a predatory plutocrat, but similar attack ads against Trump haven’t had as much traction, particularly among the white working class. But Weigel and Johnson also report that the news of Trump’s taxes has broken through to voters who weren’t influenced by earlier arguments. “It’s disgusting,” Steve Crouse, a small businessman in Toledo, Ohio, told them. “As a businessman, he’s got that right to do that. It’s the way the laws were set up. But it’s not right. I would feel guilty if I didn’t pay anything. It’s flat-out cheating the government.”
Crouse’s comments hint at how revelations about Trump’s finances undermine not just claims of business success, but also his patriotism. Trump is running on a nationalist platform of “America First.” Yet if he has avoided paying taxes, however legally, while living the life of a prince, that calls into question his devotion to his country.
There’s one more very subtle but important way this issue helps Clinton: It moves the debate to the terrain of policy rather than Trump’s circus of scandal. During the presidential debate, Clinton hit Trump for proposing tax cuts that would disproportionately benefit the rich, saying, “And the kind of plan that Donald has put forth would be trickle-down economics. It would be the most extreme version—the biggest tax cuts for the top percents of the people in this country that we’ve ever had. I call it ‘trumped up trickle-down,’ because that’s exactly what it would be.”
This argument attracted little attention since coverage was dominated by Trump’s treatment of a beauty queen and his veiled threats to bring up Bill Clinton’s sexual history. But with Trump’s taxes in the news, Clinton can weave personal scandal with policy. The shrewd play for Clinton would be to say, “My opponent has benefitted from tax laws that favor the very rich and he wants to change to the tax code to tilt the playing field even more to benefit the very wealthy. By contrast, I want a fairer tax code where the rich will pay their fair share.”
If Clinton does use the tax revelations to highlight their policy differences, she may overcome one of the big problems of the campaign: Trump’s dominance of the news has prevented her from getting her positive message out. Of course, he is likely to respond by stirring up more muck and making lurid accusations. But the only thing that rivals sex in the public imagination is money. A majority of Americans pay taxes, so the question of who gets advantages is naturally interesting, enough so that it could foreclose Trump’s attempt to return to the tabloid fare of the 1990s.