After tax story, Giuliani calls Trump 'genius'

Visiting church in Charlotte, Clinton laments gun violence

Democratic presidential candidate Hillary Clinton takes her seat after speaking at the Little Rock AME Zion Church in Charlotte, N.C., on Sunday.
Democratic presidential candidate Hillary Clinton takes her seat after speaking at the Little Rock AME Zion Church in Charlotte, N.C., on Sunday.

NEW YORK -- Donald Trump and his Republican allies embraced a report on Sunday that said the New York businessman may not have paid federal income taxes for nearly two decades after he and his companies lost nearly $916 million in a single year.

The unexpected revelation punctuated a week of missteps and aggressive personal attacks from the Republican presidential contender, with early voting already underway in some states and Election Day quickly approaching.

Trump supporters said the tax story in The New York Times may shift the national conversation away from Trump's weeklong feud with a former beauty queen and his unfounded suggestion Hillary Clinton may have cheated on her husband.

"He's not been on message," said Barry Bennett, a former Trump adviser. "A week was wasted where he could have been talking about the heroin epidemic and jobs and [the Islamic State militant group]. All the money in the world can't get that time back."

[INTERACTIVE: The 2016 election in Arkansas]

Trump is deciding whether to use the debate stage to attack Clinton's role in the infidelities of her husband, former President Bill Clinton. That's according to a person with knowledge of Trump's thinking as his senior advisers huddled Sunday for debate preparation. The person was not authorized to discuss publicly the private conversations and spoke on condition of anonymity.

Publicly, however, Trump's team was aggressively defiant on Sunday.

Neither New Jersey Gov. Chris Christie nor former New York City Mayor Rudy Giuliani, both top Trump supporters, disputed the report that said Trump's loss in 1995 was big enough that he could have legally avoided paying taxes for as many as 18 years.

"The man's a genius," Giuliani said when asked on CNN's State of the Union about Trump's use of tax provisions that could have helped him minimize what he pays in federal income taxes. "He knows how to operate the tax code for the people that he's serving."

In this case, Giuliani said, Trump was simply acting as any responsible American businessman would to save money for his enterprises. Trump's investors, he added, could have brought legal action against the Manhattan businessman had he not taken advantage of the tax law's provisions.

"Don't you think a man who has this kind of economic genius is a lot better for the United States than a woman?" Giuliani said on ABC's This Week. "And the only thing she's ever produced is a lot of work for the FBI checking out her emails."

Trump did not appear publicly on Sunday, but weighed in on social media, saying he was singularly qualified to fix the nation's tax system.

"I know our complex tax laws better than anyone who has ever run for president and am the only one who can fix them," Trump tweeted.

Christie, appearing on Fox News Sunday, said it was "a very, very good story for Donald Trump."

"This is a guy who, when lots of businesses went out of business in the early 1990s, he fought and clawed back to build another fortune, to create tens of thousands of more jobs," Christie said.

Clinton made no mention of Trump's taxes during her events in North Carolina on Sunday, where she spoke about gun violence at the Little Rock AME Zion Church in Charlotte. But the Democratic presidential nominee reposted a tweet from Trump, who wrote in 2012 that "HALF of Americans don't pay income tax despite crippling govt debt. ..."

"Now that's pretty rich coming from a guy who paid $0 in taxes for 18 years," Clinton tweeted.

Robby Mook, Clinton's campaign manager, said Trump has "spun out of control."

"We see Donald Trump is having to defend the fact that he may not have paid taxes for 20 years, which is something most Americans don't have the option to do," Mook said on NBC's Meet the Press.

Senate Minority Leader Harry Reid, D-Nev., who has sparred with Trump over his taxes and business record, also weighed in Sunday.

"Trump is a billion-dollar loser who won't release his taxes because they'll expose him as a spoiled, rich brat who lost the millions he inherited from his father," Reid said in a statement. He went on to call Trump "a racist, incompetent failure who managed to lose a billion dollars in a boom year."

Central to Trump's candidacy has been the idea of him as a successful businessman. Political analysts said the revelation that he declared a nearly $1 billion loss when his real estate company almost collapsed threatens to undercut his credibility in business.

"People can look at this little bit of evidence and now question his business acumen," said Mo Elleithee, a Democratic strategist who runs Georgetown University's Institute of Politics and Public Service.

Secondly, he said, it is an example of Trump benefiting personally from a system he has railed against. "His whole argument is that there are too many people in the establishment that are using the system to screw the little guy."

In a story published online late Saturday, The Times said it anonymously received the first pages of Trump's 1995 state income tax filings in New York, New Jersey and Connecticut. The filings show a net loss of $915,729,293 in federal taxable income for the year.

That Trump was losing money during the early to mid-1990s -- a period marked by bankruptcies and poor business decisions -- was already well established.

But the records obtained by The Times show losses of such a magnitude that they potentially allowed Trump to avoid paying taxes for years, possibly until the end of the last decade.

His campaign said that Trump had paid "hundreds of millions" of dollars in other kinds of taxes over the years.

Sen. Bernie Sanders of Vermont, who battled for the Democratic nomination with Clinton, said that far from making Trump a genius as his allies suggested, the disclosure about Trump's taxes illustrated the unfair and unequal advantage given to wealthy Americans.

"The rich are getting richer," Sanders said on ABC's This Week. "Almost everybody else is getting poorer. And yet billionaires like Donald Trump are able to manipulate the tax system so that they avoid paying federal income tax."

Before The Times story put Trump's taxes back at the center of the campaign, the candidate and his backers were engrossed in an effort to change the subject from his feud with 1996 Miss Universe, Alicia Machado, and his middle-of-the-night tweets that directed voters to what he called her "sex tape."

The online taunts referred to footage from a Spanish reality show in 2005 in which Machado was a contestant and appeared on camera in bed with a male contestant. The images are grainy and do not include nudity, though Machado later acknowledged that she was having sex in the video.

On Saturday night in Manheim, Pa., Trump imitated Clinton's stumbles as she left this year's 9/11 memorial service ill with pneumonia and questioned her loyalty to her husband.

"Why should she be, right?" he asked. "Why should she be?"

Strategists with both parties said Trump is harming his own campaign.

"What we're seeing is somebody who's blowing himself apart in real time," said Peter Wehner, a strategist and scholar who served in the administrations of the last three Republican presidents. "It's a pretty extraordinary thing to see. It's a political death wish, as if at some deep level he doesn't want to be president."

Wehner added, "It's gnawing on him that he could become what he has contempt for, and that is a loser."

Elleithee said, "Political operatives and strategists are going to study this week for generations as the textbook case of self-sabotage."

Trump has refused to release his tax returns, breaking with four decades of presidential campaign tradition. Trump has said his attorneys are advising him to keep his tax returns private until a government audit is completed.

IRS Commissioner John Koskinen told a House committee Sept. 21 that people under IRS audit are free to release their returns, or IRS letters informing a person they're being audited.

Trump has done neither. Clinton has publicly released nearly 40 years' worth, and Trump's running mate, Indiana Gov. Mike Pence, has released 10 years of his tax returns.

In Charlotte, N.C., Clinton addressed gun violence fewer than two weeks after the shooting death of Keith Lamont Scott touched off two nights of violent protests in the city's downtown.

"Our entire country should take a moment to really look at what's going on here and across America, to imagine what we see on the news and what we hear about, imagine it through our children's eyes," she said.

Clinton did not mention Trump by name but referred to her opponent's calls for "law-and-order" during the campaign.

"There are some out there who see this as a moment to fan the flames of resentment and division. Who want to exploit people's fears even though it means tearing our nation even further apart," Clinton said. "They say that all of our problems would be solved simply by more law and order. As if the systemic racism plaguing our country doesn't exist."

Information for this article was contributed by Steve Peoples, Laurie Kellman, Jeff Horwitz and Ken Thomas of The Associated Press; Nicholas Fandos of The New York Times; and Philip Rucker, Jenna Johnson, Sean Sullivan and Robert Costa of The Washington Post.

A Section on 10/03/2016

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