So the cat is out of the bag, or more accurately out of the bank vault when it comes to U.S. President Donald Trump’s financial affairs.
The venerable New York Times somehow recently managed to obtain 20 year’s worth of personal income tax returns that the president has refused to reveal since taking that office four years ago. That represents a tremendous accomplishment by investigative journalists but perhaps the bigger task remains on how to explain the implications for those running afoul of tax laws to the average citizen/taxpayer.
Apparently Trump has about 500 different businesses and likely as many tax lawyers and accountants creating a paper trail more complex than the human neurological network. At first glance it appears he is a very wealthy, successful businessman but at the same time he was consistently losing millions of dollars ever year. Go figure.
Because financial reports are so confusing to the average person I expect a public airing of his accounting misdemeanours will do him little harm in the upcoming presidential election.
I base this on the reaction of those attending the general annual meeting of a wide range of organizations from service clubs to sports organizations to farm commodity groups when the financial report is presented.
The report – consisting of lines and columns of figures under various headings – is usually read out loud by one of the volunteer members who has slightly more of an understanding of accounting than the other organization members.
There will be mention of ‘depreciation this’ or ‘deferred that’ mixed in with a little of ‘accrued here’ or ‘amortized there’ as the presenter methodically plows his or her way from one line of figures to the next. A rapt audience member will occasionally identify a figure on the sheet of paper in front of him or her simultaneously mentioned by the speaker, more as an indication of how far the presenter is from the end rather than the figure’s fiscal significance.
Although the report seemingly takes longer than a documentary on contagious poultry diseases, it is actually over relatively quickly in relation to the overall length of the AGM.
When the financial presenter concludes the report, known in layman’s terms as ‘the bottom line’, even the most casual observer will glance briefly to see whether the figure is in brackets or not. Brackets around figures are generally a bad thing.
The presenter will then ask the membership if there are any questions on the annual financial report. There follows another seemingly long, slightly awkward period of stone cold silence.
This can give the impression that each member of the organization is giving the financial report deep, thoughtful consideration before asking any question, fearful that they might ask a question to which the answer should have been obvious to them.
In actual fact thoughtful consideration is being given to how soon a motion to pass the annual financial report can be made without appearing hasty or simply anxious for that part of the meeting to be over. Pressure builds as seconds tick by until someone, usually sitting near the back of the hall, less visible, breaks rank, taking responsibility for making the desperately desired motion.
Hands to second the motion shoot up around the hall like contestants at a game show, followed in equally rapid succession by a vote to approve.
Similarly, a request is made to approve an auditor to glance over the books, usually the same auditor that has performed that task since the organization formed a hundred or so years ago. One can’t help but wonder if the firm even still exists but why get pulled back into the financial field of landmines by asking questions? Motion made. Motion approved. Done.
You can feel the mood relax again after the financial annual report is folded up and filed away. Other agenda items can then be dealt with at greater length, for instance a new sign for display in front of the building. Sign dimensions, location, colors, print size are all things that members can get their teeth into and usually do over an hour or two sharing of opinions, alternatives and objections.
Accounting principles – and I use that term loosely – are hard for most of us to fully understand, especially since they are made to provide special monetary privileges to those who do understand them.
While I was still an elementary school youth living at home, my two younger siblings decided to earn money by selling eggs. They formed the Cluck Cluck Club with the older of the two made president because she was older and the younger being the sole member of the organization because he was younger.
They combined their cash coin assets from returning empty pop bottles and doing household chores to finance their venture. Concerned with security for their cash they made a motion based on their understanding of financial principles at the time. This was to buy a piggy bank in which they could keep their cash safely stored.
The first affirmative action then taken by the Cluck Cluck Club was the purchase of a shiny, impressive porcelain piggy bank that required all their cash resources and reserves.
This left no money for the purchase of chickens and effectively bankrupted the organization – the only time I fully understood an organization’s financial report.
Apparently The Donald began his business career with a huge amount of cash supplied by his father who had made a fortune in real estate. He too was then able to purchase some shiny objects that attracted his attention such as casinos, airlines, a university to bear his name and several golf courses. These ate up all his millions of gift cash, losing him money year after year yet he became a rich business man or at least portrayed as one on television and now as president of the richest country on earth.
Over the next few weeks I am sure the New York Times will be methodically letting out more and more lines of print copy in trying to demonstrate how confusing, ambiguous tax laws – maybe even including the ones most recently passed by the Trump administration – have thus far worked to his advantage.
With my rudimentary grasp of accounting I likely won’t understand most of it, other than to say, unlike my aforementioned siblings, Trump will have chickens coming home to roost.