The New York Times Faults Trump for Tax Tactics Used by Sulzbergers Who Own the Paper

Printed from: https://newbostonpost.com/2020/10/02/the-new-york-times-faults-trump-for-tax-tactics-used-by-sulzbergers-who-own-the-paper/

The New York Times has just published a big investigation of President Donald Trump. It says the president used big tax losses in some years to avoid paying taxes in other years, that he invested some of his profits into money-losing businesses, that Trump paid his daughter as “a way to transfer assets to his children,” that his businesses are propped up by foreign revenue, and that Trump “has written off as business expenses costs — including fuel and meals — associated with his aircraft, used to shuttle him among his various homes and properties.”

The Times ought to know — because the New York Times Company and the Ochs-Sulzberger family that control it have done the same things.

The Times investigation of Trump reports, “Mr. Trump’s business losses have often accumulated in sums larger than could be used to reduce taxes on other income in a single year. But the tax code offers a workaround:  With some restrictions, business owners can carry forward leftover losses to reduce taxes in future years.” That’s how it works for New York Times Company shareholders, too. The New York Times Company had a loss of about $58 million in 2008, and its 2009 annual report disclosed a net income tax “benefit” of nearly $6 million that year. The annual report says, “State tax operating loss carryforwards (“loss carryforwards”) totaled $13.5 million as of December 27, 2009 and $9.5 million as of December 28, 2008. Such loss carryforwards expire in accordance with provisions of applicable tax laws and have remaining lives generally ranging from 4 to 20 years.”

Similarly, in 2006, the New York Times Company was in trouble. Its stock price had tumbled from a high of $40.80 in 2005 to a low of $21.58 in 2006. The company reported an annual loss for 2006 of $543 million. The Times 2006 annual report says the company’s “effective income tax rate was 3.0% because the majority of the non-cash impairment charge of $814.4 million at the New England Media Group is non-deductible for tax purposes.”

Speaking of the New England Media Group, it is to the Ochs-Sulzberger family what loss-producing golf courses are to the Trump family. The Times Company bought The Boston Globe for $1.1 billion in 1993, added the Worcester Telegram & Gazette for $295 million in 1999, and sold them both to Boston Red Sox owner John Henry for $70 million in 2013. The Times Company, like Trump, has even dabbled in the golf sector:  The Times Company bought Golf Digest magazine in 1969 for between $3 and $4 million, then sold it in 2001.

The Times makes a big investigative scandal about President Trump’s businesses paying his sons and his daughter Ivanka, describing it as a way around the gift tax. Less than a week before the Times published its investigative report, it issued a press release:  “the New York Times Company today announced that Arthur Ochs Sulzberger Jr., 69, will retire as chairman and a member of its Board of Directors on Dec. 31, 2020 and will be succeeded as chairman by A.G. Sulzberger, 40, Times publisher since 2018. Mr. Sulzberger Jr. will assume the title chairman emeritus.” The Times’s 2020 proxy statement includes two paragraphs on Ochs-Sulzberger family members employed at the company in 2019, including not only the outgoing chairman’s son A.G. Sulzberger, who was paid $2,075,313, but also James Dryfoos, who earned $285,022; Pamela Dryfoos, who earned $138,750; and David Perpich, who earned $931,338.

The Sulzberger father-and-son chairman-publisher duo themselves can’t even be bothered to report their transactions to the government on time as required. The 2020 Times Company proxy statement says, “On February 27, 2020, reports on Form 4 that were filed for Messrs. Sulzberger, Jr. and Sulzberger disclosed certain transactions in 2017 and 2018 that were inadvertently omitted from previous reports:  (i) for Mr. Sulzberger, Jr., two gifts of Class A stock that he made in 2017; and (ii) for Mr. Sulzberger, the transfer of Class A stock in 2018 to an account for which he serves as custodian.” Imagine the treatment Trump would get from the Times if he claimed to have “inadvertently omitted” reporting gifts of stock.

Foreign revenue? The Times complains that Trump is making money overseas, “licensing deals in countries with authoritarian-leaning leaders or thorny geopolitics — for example, $3 million from the Philippines, $2.3 million from India and $1 million from Turkey.” But the Times is operating overseas, too. The Times does business in the Philippines via a Singapore-based subsidiary, NYT Singapore PTE LTD. The most recent Times annual report says “International digital-only news subscriptions represented approximately 17% of our digital-only news subscriptions as of December 29, 2019.” Says the report, “the international edition of The Times is printed under contract at 35 sites throughout the world and is sold in over 120 countries and territories.” The Times even claimed a $2.6 million tax deduction in 2019 for “foreign-derived intangible income,” along with a $5.7 million “research and experimentation” tax credit. The Times annual report lists a subsidiary in communist China, the “Beijing Shixun Zhihua Consulting Co. LTD.”

Meanwhile, 9.8 percent of Times Co. stock is controlled by a Mexican national, Carlos Slim Helu, according to the 2020 Times proxy statement. That is down from the 17.3 percent Slim controlled back in 2017, when I wrote a column raising the question of whether The New York Times needed to register under the Foreign Agents Registration Act.

The Times complains about Trump’s taking the use of an airplane as a business expense. The Times, though, did this, too, for years, with a plane with the FAA tail number 1896, matching the year that the Ochs-Sulzberger family acquired the paper. In 2009 the Times Company put its corporate jet up for sale. Maybe the Times executives are jealous that Trump still has a plane at his disposal.

The Times assures readers that “All of the information The Times obtained was provided by sources with legal access to it.” But that skirts the question of whether was legal for those sources to provide the information to the Times, or for the Times to publish it. Federal law, 26 U.S. Code Section 7213, makes it a felony with a punishment of up to five years in prison willfully to disclose tax return information. That law applies to federal and state employees and also to “other persons.” It’s also a felony to solicit such information. The night watchman at the Smithsonian has “legal access” to the Hope Diamond, but that doesn’t permit him to hand it over to the Washington Bureau of the New York Times.

Carlos Slim and the fifth-generation members of the Ochs-Sulzberger family are making money selling a story based on dubiously obtained information, painting Trump as somehow corrupt for doing things that the Ochs-Sulzberger family has itself been doing for years.

As Judge Learned Hand of the Second Circuit put it back in 1934, “Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.” The Sulzbergers apply that principle to their own business affairs, but they apply a different standard to the non-Sulzberger rich, including the president.

 

Ira Stoll is editor of FutureOfCapitalism.com and author of JFK, Conservative.

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