CBS This Morning on Tuesday brought on financial adviser Mellody Hobson to critique Donald Trump’s statements on taxes and his business dealings. Considering that Hobson is a longtime donor to Barack Obama and a supporter of Hillary Clinton, she’s not the most objective source.
Co-host Gayle King, another Obama donor, introduced, “Billionaire investor Warren Buffett is firing back after Donald Trump attacked his tax history. The Republican nominee has faced criticism to use a deduction that could have helped him legally avoid paying federal taxes for years.”
In this exchange, co-host Norah O’Donnell used Hobson to attack Trump on finances:
NORAH O’DONNELL: And Mellody, [Trump] says though that the financial disclosure forms he filed with the FEC covers most of that. Is that true?
MELLODY HOBSON: No. So, I actually went and looked at the filing. And the thing, the difference between the tax return and this financial filing. Tax returns, specific. The financial filing talks in generalities and estimates.
King allowed one sentence to alert viewers about Hobson’s allegiances: “We want to point out and she wants to point out that she supports Hillary Clinton as does Warren Buffett.”
Hobson doesn't just appear on television to promote Barack Obama she also donates her own money. In 2012, she was a bundler for the Democrat, putting together $131, 200. In 2008, she donated $28, 500.
How close is the network news analyst and the President? Obama said this about her at a White House event in November of 2013:
BARACK OBAMA: Mellody was being very modest when she said she had a front-row seat. Mellody was one of my earliest supporters back when nobody could pronounce my name. And her and John Rogers at Arial Capital helped to co-chair some of my first fundraisers. And they’d have to drag some straggly group in, kicking and screaming, and write a check and listen to this young senator who had a lot of ideas but not necessarily any realistic prospects to win. And she went through a lot of ups and downs with me and my career and is just a great, great friend. So I want to thank her publicly for all the support that she’s given us.
Perhaps there were other choices CBS could have found to weigh in on Trump’s taxes? Maybe a financial adviser not so deeply tied to top Democrats?
A transcript is below:
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CBS TM
10/11/16
8:14:54GAYLE KING: Billionaire investor Warren Buffett is firing back after Donald Trump attacked his tax history. The Republican nominee has faced criticism to use a deduction that could have helped him legally avoid paying federal taxes for years. In Sunday's debate, Donald Trump said Warren Buffett used the same practice.
DONALD TRUMP: Now, the taxes are a very simple thing as soon as I have — first of all, I pay hundreds of millions dollars in taxes. Many of our friends took bigger deductions. Warren Buffett took a massive deduction. Soros, who is a friend of hers, took a massive deduction. Many of the people who are giving her all this money that she can do many more commercials gave her — took massive deductions.
KING: In a statement yesterday, Buffett said, Trump, quote, “has not seen my income tax returns and I've paid federal income taxes ever year since 1944 when I was 13.” CBS News financial contributor Mellody Hobson joins us now from Chicago. We want to point out, and she wants to point out, that she supports Hillary Clinton as does Warren Buffett. Mellody, good morning to you.
HOBSON: Good morning.
KING: So, I know you have talked to a source that is very close to Warren Buffett. Was he watching the debate and he heard his name and he thought what?
HOBSON: He was very annoyed. Very. And my source said it was just because it was factually incorrect what was being stated. And he felt the need, first thing Monday morning, to set the record straight, which is why he released a summary of his 2014 tax return and just spelled out the facts and the numbers and debunked any idea that he had taken some kind of big loss to not pay taxes.
CHARLIE ROSE: He basically made the point that he had not used the carry-forward for his personal income taxes?
HOBSON: Correct. Specifically, my source says he never has in the 73 years he's been filing taxes.
KING: But the type of deduction that Donald Trump is being criticized for is called a net operating loss-carry forward that has been voted into law, supporting by Democrats and Republicans, arguably no one has used it quite to the extent perhaps that Donald Trump has, but this has had bipartisan support in the past and many businesses, personal people use it. Correct?
HOBSON: Totally legal. And, again, we don’t know that, you know, how many people have used it in this way. But it's totally legal. So, that is true. It's very simple. He took a big loss and the law says that you can use that loss to offset future income. So, it’s very simple math.
O’DONNELL: So, Mellody, let’s just spend a minute on that. Why does that exist within the law?
HOBSON: Why does it exist? It basically goes back to tax code for a long, long time. It's basically a way for people to recoup losses they have had.
O’DONNELL: So, for instance, someone who owns a lawn mowing company. If they had a year where there were floods and terrible and they lost all the money. Then the next year they wouldn't have to pay taxes?
HOBSON: As much in taxes, correct.
ROSE: It also depends on whether it’s a Chapter S corporation, doesn’t it, Mellody?
HOBSON: We're getting very technical here, but that's true. That’s the big difference between what we’re looking at with Buffett and what we’re looking at with Trump. Lots of private companies where Buffett is the head of a big public company where we have a lot more transparency.
KING: Okay, Mellody, here's something that's not so technical. Warren Buffett has called on Donald Trump to release his tax returns. He disputes that he can’t do it while under audit. What would we specifically learn from those tax returns.
HOBSON: Yeah. So, he said he's under audit. He’d release his. You show me yours. I’ll show you mine. We just need a very small section to understand his financial picture. His son has said he's not releases because the returns are 25,000 pages long. This is what we need. Page one. It would tell us income and any losses that he had. Page two, it would tell us how much he pays in taxing and we could compute his effective tax rate. Section A. It would tell us any kind of deductions he has, including any charitable. And then Schedule D. Excuse me, Schedule A. And then Schedule D, which would tell us any kind of capital gains or losses he has had some asset sales. A building, stock. It's pretty simple. That's all we'd need. We'd have 80 to 90 percent of his financial picture just from that very limited amount of information.
O’DONNELL: And Mellody, he says though that the financial disclosure forms he filed with the FEC covers most of that. Is that true?
HOBSON: No. So, I actually went and looked at the filing. And the thing, the difference between the tax return and this financial filing. Tax returns, specific. The financial filing talks in generalities and estimates.
KING: Is Warren Buffett now saying, “Donald Trump keep your name out of my conversations? Keep my name out of your conversations?”
HOBSON: Basically, that’s what he said.
