Good morning.


It looks increasingly likely that Donald Trump has paid little or no federal income tax in decades. Fortune’s clever Shawn Tully laid out the scenario by which this is possible in an analysis last week; the New York Times put meat on the bones yesterday with its report on some old Trump tax records it obtained.


The question for voters: assuming Trump used legal means to eliminate his tax liability, is that a bad thing or a good thing? Without confirming either the Fortune or New York Times stories, Trump yesterday tweeted: “I know our complex tax laws better than anyone who has ever run for president and am the only one who can fix them.”


In this respect, Trump is joining the likes of Apple and Google– which have used complicated tax structures in favorable jurisdictions like Ireland to escape billions in taxes – or even Mylan and Medtronic – which technically “moved” their headquarters outside the U.S. to do same. Should they be shunned for shirking their patriotic duties; or cheered for the cleverness of their tax lawyers?


We’ll be watching to see how this plays out with voters. But it seems to me this game-playing by rich and powerful people, as well as rich and powerful corporations, is exactly the sort of thing that has sowed the seeds of populist discontent that now threaten the social compact on which post-World-War II prosperity was built. Whether the result is a President Trump, pursuing an anti-globalization agenda, or a President Clinton, with a constituency clamoring for taxes and regulation, the future looks cloudy for business.


Meanwhile, Deloitte this morning is releasing its poll of U.S. CFOs in which they identified the top risks to their companies in the coming year. Number one on their list is the possibility of a global slowdown or recession; number two is the increase in burdensome regulation; and number three is the uncertainty around the U.S. election. A full 87% of those surveyed said the future performance of their company depends at least somewhat on the outcome of the U.S. presidential election; 17% cited a strong or significant dependence.


By the way, a full 71% of the CFOs also said U.S. equity markets are overvalued.


Enjoy the day.



Alan Murray

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