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Quest Means Business
Outrage Grows over Donald Trump's Tax Arrangements; Dow Sharply Up for Biggest Gains since Mid-July; United Airlines Agree Not to Furlough Pilots until Next June. Aired 3-4p ET
Aired September 28, 2020 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:15]
ZAIN ASHER, CNN INTERNATIONAL HOST: All right, let's take a look here. The Dow is actually heading for its best day since July. A lot of investors are
hopeful that a stimulus deal could be reached.
Those are the markets, and these are the reasons why.
Donald Trump is due to speak any moment now as outrage grows over his tax arrangements.
And United Airlines agrees to put off some furloughs until next summer.
And TikTok beats the clock with a last-minute injunction from an American judge.
Coming to you live from New York, it is Monday, September 28th. I'm Zain Asher, and this is QUEST MEANS BUSINESS.
Tonight, the President is in damage control mode on the eve of his first debate against Democrat Joe Biden. We are waiting to hear the President
speak at the White House this hour. This, as a detailed report by "The New York Times" casts doubt about his business skills and his political
identity.
Those numbers in the report are stark. They say that he paid just $750.00 in income taxes the year he won the presidency and the same amount the
following year.
For perspective, in 2017, he paid more than $300,000.00 in combined taxes to India and the Philippines. Going back, Mr. Trump paid no U.S. income tax
at all in ten of the previous 15 years. Democrats are already using the story in attack ads accusing the President of looking down on the American
people, and if he does win, he'll be in office when hundreds of millions of dollars in loans come due, raising questions over what he might do as
President to meet that debt.
And finally, his tax history calls into question why he ran for President in the first place, given his tenue in finances when he launched his
campaign.
White House correspondent, John Harwood joins us live now from Washington.
John, one of the reasons why some people say they voted for Trump is because of how he portrayed himself as a businessman, as somebody who was
successful in a variety of industries. How much does all of this change his image in the eyes of the voters, do you think?
JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Well, I think it's very difficult at this point in Donald Trump's presidency to change his image.
Opinions and views of Trump have been locked in for a very long time. That's why the race between Joe Biden and Donald Trump for President has
barely moved throughout the year, despite all of the tumult of this summer.
But what it does is make it harder for the President to claw back the voters from Joe Biden that he needs. As you said, Donald Trump ran in 2016,
saying, I'm a successful businessman and my success means that I can take the skills that produced it and do the same thing for the country.
Now, we're seeing two things that are problematic for him. One is that he wasn't so successful as he claimed; and that part of the brand was a little
bit faulty. And the second is, it underscores the shenanigans that wealthy people can use to avoid taxes, and so this President who lived a very
lavish lifestyle nevertheless paid smaller amounts in taxes than schoolteachers, firefighters, and that is precisely the point that Joe
Biden is hitting in his advertising today, and it's the point that he's going to hit on that debate stage with Donald Trump tomorrow night.
ASHER: All right, I imagine that this is going to be the first, second, and third question to Donald Trump in tomorrow night's debates. How is he
going to defend himself, do you think?
HARWOOD: Well, what he's done is a series of characteristic defenses. First of all, he said it's fake news. He said it's not true, made up.
He has attacked "The New York Times," said they are out to get him because he's a conservative Republican. But he's also, today on Twitter, said,
well, I took deductions that were legal that everyone else can take for depreciation and tax credits, and again, that underscores the idea that,
no, the average schoolteacher or firefighter or nurse doesn't have depreciation or tax credit deductions to take. That's why they pay more in
taxes than Donald Trump did.
So, it puts him at odds with the average voter, and again, it's not likely to cost him a lot of votes, but he is running short of weeks to erase Joe
Biden's deficit. It makes it that much more difficult.
Joe Biden has framed his campaign as Scranton, Pennsylvania, versus Park Avenue. This story fits right into that narrative.
ASHER: And to your point, the average schoolteacher and firefighter isn't getting $72 million in Federal income tax refunds. John Harwood live for us
there. Thank you so much.
Donald Trump has always claimed his personal wealth was a political asset, as our John Harwood was just talking about there. Listen to him and his son
on the campaign trail ahead of the 2016 election.
[15:05:10]
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), THEN CANDIDATE FOR PRESIDENT OF THE UNITED STATES: The top person can't be bought. I'm worth far too much money. I don't need
anybody's money. I'm not running with anybody's money. I'm spending my own money.
ERIC TRUMP, SON OF DONALD TRUMP: Vote for the candidate who can't be bought, sold, purchased, bribed, coerced, intimidated or steered from the
path that is right and just and true.
Vote for the one candidate who does not need this job.
(END VIDEO CLIP)
ASHER: CNN senior political analyst, David Gergen joins us live now. So you heard Donald Trump and his son saying that, you know, he can't be
bought as President because he is so wealthy. Donald trump has $400 million in debt coming due in the coming years. Can he be bought?
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, he has $400 million that he himself is personally responsible for, so that's money he owes. Can he
be bought? That's the big question everybody has now.
If you have $400 million that he is going to bring in over the next four years and he were to be President over those four years, what kind of back
room deals is he going to be cutting with strongmen across the world? With corrupt business interests? With the Deutsche Bank type people? What kind
of deals is he going to be cutting?
He has shown already how two-faced he has been about this. He came to the public. He came to us, the voters, and said, I'm a really successful
businessman, and I'm a gold-plated businessman.
He went to the Internal Revenue Service and said just the opposite, I'm a loser. I've lost tons and tons of money and therefore I should be able to
write all that off and not pay taxes, and what does he do? He sticks the American people with the bill.
He got $70,000.00 for hair styling. That was a write-off -- $70,000 for hair styling.
He brings Ivanka in, gives her hundreds of thousands of dollars, it looks like apparently $700,000.00, calls her a consultant and writes off as a
business expense, his own daughter.
Yes, $750.00. The rooms are full of Secret Service over the weekend in Mar- a-Lago are more expensive than the $750.00.
$750.00 is a joke. It is disdainful to the public.
ASHER: You know, just before the election, in 2016, we had bombshell revelations in those "Access Hollywood" tapes. Now, in 2020, we have this
other bombshell revelation in terms of these tax returns. Will it make a difference, do you think?
GERGEN: That's a very good question, Zain. Look, I think if the "Access Hollywood" tape, which was so disgusting didn't knock him out of the box,
standing alone. I don't think this will knock him out of the box.
What I do think is that a lot of people who are unhappy with Trump, they just don't like him very much, but were beginning to line up behind -- or
beginning to line up against him, people's distrust and disdain and distaste for Trump is going to go way up, and the anger level -- the women
who are feeling a lot of anger already coming into this week over the Supreme Court pick and the whole response to Ruth Bader Ginsburg and where
we're going to go on women's rights in this country.
This will deepen their anger, and I think it's going to increase turnout, so I think he gets damaged. At this point, it's too early to say how much.
But Donald Trump, as John Harwood reported, time is getting very short to turn this race around.
A story like this, which is going to consume at least a week of chatter is a bad news for Trump's campaign, and really helps Biden. It does not knock
Trump out of the box, but damages his campaign and damages people's faith in him.
ASHER: But surely his supporters are going to say, listen, this is even more evidence that Donald Trump is a very smart, very astute businessman
who is able to use the Tax Code in this country to his advantage. Surely that's what his supporters are going to say, and to a certain extent, do
they have a point?
GERGEN: To a certain extent, but his view of voters, when he was on with Hillary Clinton in the debates last time, you'll recall that she raised
this question about his taxes, and insists that he hadn't been paying taxes and he said that's because I'm very smart, as if, you dodos, you're the
ones out there who do stupid things like pay taxes.
You dodos are the ones who go out and fight our wars. You're losers. That is what we mean by the disdain. That's going to be the root of the disdain,
and people feel that.
People feel like he is a grifter. He's a fraud. And he has gotten away with it for a long time, but people are sick of it, and I think there's going to
be a real taste for change.
ASHER: I mean, I would say that this is a godsend for the Democrats on the eve of the debate. I mean, you couldn't really pray for more, let's be
honest. So, how do you think Biden is going to weaponize this come tomorrow night?
[15:10:10]
GERGEN: Well, I think what he should do, it has to do -- is not get down in the gutter with Trump.
Trump is going to try to bait him into getting an angry, to get his Irish dander up, and Joe Biden can go off if he does that. He gets angry. He does
-- he lights up, and -- but the thing for Biden tomorrow night, he's got to do what Reagan did. Treat these vicious attacks with humor.
Sort of be, you know, there you go again, I can't believe you're doing that. And keep his humanity. Don't -- the last thing Joe Biden has going
for him is his humanity, his empathy, his connection with people. Don't lose that in this debate by getting all wrapped up with Donald Trump. It's
not worth it.
Stay true to the people who are putting you there, the voters who love you and want you to succeed versus Trump who wants to eat your lunch.
ASHER: Well, a little bit more than 24 hours to go, we will see what ends up happening. David Gergen live for us there, thank you so much.
GERGEN: Thank you, Zain.
ASHER: The White House is having its best day in a couple of months. Investors are hopeful of a stimulus breakthrough in Washington, and good
news for United Airline pilots. Tens of thousands of others in the industry are facing the prospect of layoffs this week. That story next.
(COMMERCIAL BREAK)
ASHER: The U.S. markets are rallying today. This looks to be the best day for the Dow since mid-July. The Dow is up almost 500 points. Paul La Monica
is watching the markets for us here in New York. So, is this a sign that investors really do believe that potentially, there's a stimulus deal on
the horizon?
PAUL LA MONICA, CNN BUSINESS REPORTER: I'm not so sure they believe a stimulus deal is on the horizon, per se, but they are, I think, at least
heartened by some progress that we might be getting because of those comments from House Speaker Nancy Pelosi.
I mean, we all know that this is going to be an extremely volatile couple of weeks because of the election coming up. And I think that you have to
take that into account, that we've, you know, had, you know, a couple of weeks now of stocks selling off, so this might be one of those proverbial
bounces, buying on the dip, people coming back in.
It is encouraging to see banks and energy stocks, which are economically cyclical, rally, but I'd be very wary to say that the worst is over for
this volatility just yet.
ASHER: All right, so there is going to be more volatility especially in the run-up to the U.S. election. Do you anticipate more than volatility? Do
you anticipate even a mini-pullback or correction in the run-up to the election?
[15:15:12]
LA MONICA: Yes, I don't know if we'll get a correction, per se, because, you know, the good news is that we are seeing some signs of economic
improvement, even though, you know, the economy continues to be well off of where it was before the pandemic began this spring. So, obviously, that is
a concern.
I think, though, that investors are hopeful that earnings will improve later this year and into 2021, but then again, we have the election, and
there could be a lot of volatility because there's this distinct possibility we won't know the winner for a while.
One strategist I spoke to today actually joked, saying that the true black swan event in the markets would be if we find out at 9:00 p.m. the night of
election night that there's a winner and someone is conceding. I think Wall Street is bracing for this to be a weeks, maybe months-long process.
ASHER: So if there is no declared winner on the night of November 3rd, A, what happens to markets then? And B, what sort of precautionary behavior
will we see from companies in the aftermath -- in the direct aftermath of that?
LA MONICA: Yes, that's a great question, Zain. You would have to think that investors would probably sit on their hands. I mean, I think that
everyone wants there to be just an outcome so that we can move on, whether or not it's the status quo, is it a blue wave, obviously, that would be
disappointing for various people, depending on their political beliefs, how they feel, Democrats would do for the markets versus Republicans.
But I don't think we're going to get a definitive answer any time soon and because the market kind of expects that, I don't think there will be this
huge selloff. I think the big question and challenge is going to be, if there is a clear winner at some point, what happens if the loser doesn't
actually acknowledge the results and doesn't concede?
I don't think it's any secret that more people believe that that's likely if Trump loses than Biden, but that could be a big problem for the markets,
if we come to January, and you know, no one is willing to give up.
Because then Nancy Pelosi becomes acting President, you know, if there's no winner decided by Inauguration Day.
ASHER: Right. And Paul, finally, you know, regardless of what happens after Election Day, between now and November 3rd, is the only thing that's
going to boost markets at this point a stimulus deal? I mean, is that the only game in town? Just seeing how much the Fed has really propped up the
markets? Is it stimulus or bust, basically?
LA MONICA: I think stimulus would be what really helps, but I wouldn't discount, also, what happens on Friday. We have the last Jobs Report before
the election. If the Jobs Report is better than expected, and it lends credence to the notion that the economy is slowly getting back to, you
know, a bit of a healthier place, then people might be willing to not be as wedded to the notion that you have to have stimulus.
But if we have really bad jobs numbers on Friday and then there's no stimulus, that's a problem.
ASHER: All right, Paul La Monica, live for us there. Thank you so much.
This could be a devastating week for workers in the airline industry, mass layoffs are expected to begin Thursday, and nearly 50,000 jobs could be on
the line. United has agreed not to furlough any of its pilots until at least next June, but as Pete Muntean reports, others will not be so lucky.
(BEGIN VIDEOTAPE)
ROBIN HAYES, CEO, JETBLUE: I'm here with just one request.
(END VIDEO CLIP)
PETE MUNTEAN, CNN AVIATION CORRESPONDENT (voice over): Airline CEOs are making a new plea on Capitol Hill, to avoid a layoff cliff only days away.
(BEGIN VIDEO CLIP)
HAYES: Please, Congress, we need you to do your job, and we need you to do it now.
(END VIDEO CLIP)
MUNTEAN (voice over): A new CNN analysis finds nearly 50,000 airline workers are facing furloughs that begin October 1st.
(BEGIN VIDEO CLIP)
DOUG PARKER, CEO, AMERICAN AIRLINES: It would be a very, very horrific event, I think, if that happens, given all the support.
(END VIDEO CLIP)
MUNTEAN (voice over): Doug Parker is the CEO of American Airlines. It sent involuntary furlough notices to 17,500 of its workers. At United Airlines,
the new number is 12,000. The furloughs industry-wide for mechanics and gate agents to pilots and flight attendants like Angela Frid.
(BEGIN VIDEO CLIP)
ANGELA FRID, FLIGHT ATTENDANT, UNITED AIRLINES: It's very emotional. You know, I'm scared for myself. I'm scared for my friends.
SARA NELSON, ASSOCIATION OF FLIGHT ATTENDANTS: This is real people. Moving their stuff into their cars and trying to figure out how to survive.
(END VIDEO CLIP)
MUNTEAN (voice over): This new push means a new bailout for airlines, a new bill would give carriers $28 billion to keep workers on the payroll
through next March.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: This is taking longer, and it is deeper than most people expected six months ago.
(END VIDEO CLIP)
MUNTEAN (voice over): New T.S.A. figures show air travel remains stalled at 30 percent of last year's levels. Airlines are losing millions of
dollars a day flying planes that are only two-thirds full. But more help is facing new slowdowns. The Capitol is now consumed with the Supreme Court
pick.
House Democrats want airline assistance in a larger recovery package. Industry leaders say they need to know now whether workers will be saved.
[15:20:23]
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Six months from now, I really don't believe we'll be even close to this level of furloughs and hopefully zero.
(END VIDEO CLIP)
MUNTEAN (voice over): Pete Muntean, CNN, Washington.
(END VIDEOTAPE)
ASHER: The coronavirus pandemic is forcing airports around the world to rethink the way they do business and SkyTrax has an update on their efforts
to keep passengers safe. It's ranked a few more European airports given Athens International four stars on its COVID-19 precautions as well as
Dusseldorf, London's two main airports have three stars, while Rome has earned five.
The rankings are based on physical checks and hygiene tests by SkyTrax staff and involve no airport self-evaluation.
I'm joined now by Edward Plaisted, the CEO of SkyTrax. So just us through, with these rankings, the first thing that passengers, specifically -- I
understand that you've placed airports on this rank, but what should passengers be looking out for, specifically, when they fly?
EDWARD PLAISTED, CEO, SKYTRAX: I think that customers are, as we all know, they're looking for some level of assurance that the airport has put in
place all the necessary measures possible to, if you like, reduce the spread of coronavirus.
And I think the other real key factor we look at, particularly when we're doing an audit, but from a customer perspective is consistency.
At every element of the airport experience, whether they are in the car park, at check-in, going through security, immigration, grabbing a coffee,
whatever it may be, it's really trying to see that the airport has not only, if you like, advertised a consistent policy, this is what we will
offer you, and this is what we provide, but it's much more about the reality whether that is consistent and whether the standards are the same
landside, airside, arrivals, departures, and I think that's primarily what we focus on.
ASHER: And what would you say was the most important aspect when you graded these airports in terms of what you were looking for to really
ensure that these airports are keeping people safe?
PLAISTED: The -- I mean, obviously, key is social distancing. Over and above simply having decals on the floor, having barriers, and again, that's
something which varies according to the country you're in, according to the customer types.
Some customers in some countries will distance naturally much more voluntarily than in some other particular regions that we just visited
where despite wearing face masks, customers will still crowd upon other customers, again, at security, at immigration, and we are really expecting
in the pinch points, if you like, of an airport for the airport company to take some proper involvement and to have staff that actually will reprimand
customers and put them in line, so to speak, where necessary.
Because it is the safety of all rather than just those that abide by the rules, whether at an airport or whether out in society nowadays.
ASHER: All right, so it's beyond just having signs like, you should be six feet apart, and there should be actual airport staff involved in
maintaining and ensuring social distancing.
Just given how much Europe has struggled to beat back this pandemic, we're seeing record number of cases every single day in places like the U.K. and
France. How important are airports when it comes to the fight against the coronavirus?
PLAISTED: It is an unknown quantity, so to speak, in terms of whether they are effectively a breeding ground or a passing on platform for COVID-19.
That's not known. I think that for the very small number of customers that are flying today, it is important. They are making the effort, if you like,
to use the airlines, to use the airport, whether it's business, whether it's pleasure -- I say pleasure, mostly sort of returning residents and
that type of travel.
I think it is important that the airport steps up, really, and delivers what they say they're going to deliver. This is our -- the primary basis on
which we evaluate an airport.
[15:25:10]
PLAISTED: It's very easy to lay out all these wonderful terms and conditions and processes, but is it actually happening? Do the security
staff change their gloves between patting down customers? These type of recommendations, not just from W.H.O. but many industry bodies.
So, it's that level of detail that really matters.
ASHER: And finally, just tell us about the airports that are getting it right. Rome was awarded five stars. What can other European airports learn
from Rome's International Airport?
PLAISTED: I think Rome -- a very key factor behind Rome, the branding, if you like, they brought in, and for all of the COVID-19 signage, facilities,
sanitizers, all of the additional elements they put a lot of thought into creating a very distinctive brand. When we look at some other airports.
They have the sanitizers, the signage, but we find it can almost get lost. It almost matches the normal sort of signage you see around an airport
terminal.
But over and above that, Rome was certainly one of the first. They have their biosecurity teams, whose primary objective -- they're very visible --
is to patrol the terminals, to maintain customer adherence, if you like, to the policies. It's just a very efficiently organized but efficiently
implemented system.
And again, key to anything, which we mentioned in some of the releases, is the consistency with which those standards are being delivered.
ASHER: Edward Plaisted live for us there, thank you so much.
PLAISTED: It's a pleasure.
ASHER: When we come back, we ask a tax expert how Donald Trump managed to pay just $750.00 in U.S. income tax, even as he was forking over hundreds
of thousands in taxes to governments overseas.
(COMMERCIAL BREAK)
[15:30:00]
ASHER: Hello, everyone, I'm Zain Asher. Coming up on the next half hour of QUEST MEANS BUSINESS, we are waiting to hear from U.S. President Donald
Trump. He's due to speak in the Rose Garden any minute now. And we'll hear from Microsoft's President as he reflects on the company's failure to
strike a deal with TikTok, but first, these are the headlines on CNN at this hour.
Any minute now, President Donald Trump is expected to speak at the White House about his government's Coronavirus testing strategy. If he allows
questions, he's certain to be grilled on a New York Times report that says he's paid little, if any, federal income taxes for years largely by
claiming massive financial losses.
President Trump's former campaign manager Brad Parscale is in hospital, following a reported suicide attempt. Police arrived at his Florida home on
Sunday after a call from his wife. They say that Parscale was detained without injury. According to the police report, his wife says he's made --
he made suicidal comments throughout the week.
Armenian and Azerbaijani forces are battling over a disputed region. Both sides report military casualties as well as civilian deaths and injuries.
The land is internationally recognized as part of Azerbaijan but is controlled by ethnic Armenians. And the World Health Organization has
announced an agreement to widen access to rapid COVID-19 tests in lower and middle-income countries. WHO says that it will especially help improve
testing capacity in remote areas without lab facilities or enough professional health workers.
The German government confirms Chancellor Angela Merkel visited Russian President -- dissident, excuse me, Alexei Navalny in a Berlin hospital
while he was recovering from suspected poisoning. A government spokesperson called it a personal visit. Navalny was released from the hospital last
week. He's undergoing rehabilitation therapy in Germany.
Returning to our top story, a New York Times report claims President Trump paid little to no federal income taxes over much of the past two decades,
as massive losses across his business empire helped shrink his tax bill. Joe Johns has more.
(BEGIN VIDEOTAPE)
JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Just two days before the first presidential debate, a new report revealing some of the information
President Trump's worked hardest to hide, his tax returns. A New York Times investigation says Trump paid only $750 in federal income taxes in 2016 and
2017. Soon after the report published, the President called it fake news saying he's paid a lot of taxes.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Well, first of all, I paid a lot and I paid a lot of state income taxes, too. The New York State charges
a lot, and I paid a lot of money in state. It will all be revealed, it's going to come out.
JOHNS: But the Times reports the President has been fighting with the IRS for years over a nearly $73-million tax refund, he claimed. If he loses
that battle, it could cost him over $100 million.
TRUMP: They're doing their assessment. We've been negotiating for a long time. Things get settled like in the IRS. But right now, when you're under
audit, you don't do it.
JOHNS: Despite the President's claim, tax information can be made public even if he's under audit. The Times also says Trump paid no federal income
taxes in 10 of the 15 years before he became President because he reported losing much more money than he made. This, another detail in the Times
investigation painting a damning portrait of Trump's success as a businessman, a selling point he used to rally supporters on the campaign
trail.
Adding to that, the Times reported last year that based on tax forms from 1985 to 1994, he lost more money than nearly any other individual American
taxpayer. The report also reveals the President has spent nearly all of the $427 million he made on the T.V. show, "The Apprentice" to help fund his
other businesses, and owes more than $300 million in loans that he's personally responsible for over the next four years. According to The
Times, Trump use his status as President to attract business to his private properties like his hotels and golf courses to help offset his financial
problems, creating direct conflicts of interest.
Trump also writing off massive deductions, including more than $70,000 for hairstyling expenses, and hundreds of thousands in consulting fees for the
Trump Organization that matched payments his daughter Ivanka received from a consulting company she co-owned. Joe Biden's campaign says the Times
report is another example of the big contrast between Trump and the Democratic nominee.
[15:35:13]
KATE BEDINGFIELD, CAMPAIGN MANAGER, BIDEN CAMPAIGN: It's the latest reminder how clear the choices here in this race between Park Avenue and
Scranton. You have, in Donald Trump, a president who spends his time thinking about how he can work his way out of paying taxes. With Joe Biden,
you have somebody who has a completely different perspective on what it means to be a working family in this country.
(END VIDEOTAPE)
ASHER: President Trump says The New York Times report is fake news and will doubt, less have a lot to say about it at his first presidential debate
against Joe Biden on Tuesday. After all, his meager federal tax contributions stand in stark contrast to one of his favorite political
slogans.
(BEGIN VIDEO CLIP)
TRUMP: And I am proudly putting America first. It's about America first. We're going to put America first. We are finally putting America first.
(END VIDEO CLIP)
ASHER: When it comes to paying his taxes, the President appears to put America dead last. Take a look at how much Trump's overseas ventures paid
out in taxes the year he became President. According to The Times, in 2017, Mr. Trump or his companies pay taxes of more than $150,000 in the
Philippines. In India, it was $145,000 in taxes. And in Panama, his tax payments topped $15,000. Meantime, in the U.S. where the Trump Organization
owns dozens of businesses, The Time says the President paid just $750 in federal income taxes that year. Joseph Bankman is a tax law professor at
Stanford University. He joins us live now from California. Professor, thank you so much for being with us. How surprised are you by all of this?
JOSEPH BANKMAN, TAX LAW PROFESSOR, STANFORD UNIVERSITY: Well, I think we always knew that Trump was going to be someone that pushed the edges on
taxes, and he didn't reveal his returns, which was extraordinary. So, we knew there was something there. I'm still a little surprised.
ASHER: So, I'm sure our international audience has one question, which is how on earth can the U.S. President get away with this? He's essentially
been paying the same amount in taxes as somebody who makes approximately between 10,000 and $20,000 a year? How is that possible?
BANKMAN: Well, I think he has a lot of things going for him if we include the term going for him to mean help you not pay taxes. You mentioned
business losses, that would be a legitimate reason for not paying taxes. But a lot of his businesses seemed to have a lot of personal consumption. A
building, Mar-a-Lago, his West Chester home, expenses to a wife and flying on a private jet. So, one of the things he illustrates is that you can
manipulate the boundary between business and personal, at least if you're a business owner of substantial wealth. Another thing that is happening with
Trump is that he's spending other people's money right now as in the past and our tax system allows that to happen tax free. So, there's this
enormous gap between the level of consumption someone like Trump can enjoy and the tax he's paying.
ASHER: Is the U.S. tax system fair?
BANKMAN: Well, it could be fair. No tax systems are perfect, including the U.K. tax system, to be quite honest, which is similar to the U.S. tax
system. But I think that Trumps returns highlights some particular problems the U.S. more than other countries.
ASHER: So, I mean, obviously, this was allowed to happen through business tax credits, losses that he claimed, deductions, for example. So, what
reforms are needed do you think so that people as wealthy as Trump or as wealthy as Trump claims to be, can't get away with this?
BANKMAN: Well, you know, we may need bigger penalties in the law, because while you can't know for sure, because I haven't seen these returns myself.
It looks like Trump is one of those taxpayers that pushes the edge. A lot of wealthy individuals don't. So, before changing the tax system, we have
to make it unattractive for someone to try to game the system and be hyper aggressive. So, that's one reform, I think, more penalties for people that
push the edge, particularly if they have great wealth. Another reform might be to disallow people to spend enormous amounts without paying tax.
[15:40:01]
In the U.K. and in the E.U., you've got sales taxes or VATs that get at least some of the consumption. We don't have that in this country. So,
either adding a VAT or changing the rules on spending borrowed money against your own wealth, would be a way to stop that. And finally, maybe we
need to limit business deductions for someone like Trump, the way that we limit them for the average working stiff.
ASHER: Finally, he received $72 million in a federal income tax refund, plus $21 million in state and local refunds. We know that that's the
subject of an audit to make sure that it was legitimate. What will auditors be looking for -- what are they looking for?
BANKMAN: Well, we have to know the basis of that refund. And one of the things that Times didn't say is whether in claiming that refund, Trump made
claims that just weren't true. So, on the basis of what we know, we don't know exactly what was wrong with their refund, but if this is someone that
pushes this system in most places, may be pushed it in some respect with that refund.
ASHER: All right. Joseph Bankman live for us. Thank you so much. All right. Still ahead this hour, TikTok can still be downloaded in the U.S. The
federal judge has ruled in favor of the social media platform through a temporary injunction. We'll look at what may come next, ahead.
(COMMERCIAL BREAK)
ASHER: A U.S. federal judge has temporarily blocked the Trump administration from banning new downloads of TikTok. TikTok is challenging
the ban as unconstitutional. Brian Fung is in Washington D.C. for us, joins us live now with the latest. The judge, however, didn't actually block a
much broader ban against TikTok that sets to come into effect on November 12th. So, why the discrepancy?
BRIAN FUNG, CNN TECHNOLOGY REPORTER: Right. Well, the judge in this case didn't issue an official opinion that was open to the public in this, so we
don't really know what his explicit reasoning was. But, you know, in an emergency hearing on Sunday, where he heard from TikTok and the government,
the judge did say that, you know, one of the key arguments he was looking at was this claim from TikTok that it's due process rights was -- were
violated.
[15:45:03]
And the way that the Commerce Department has structured some of these restrictions against TikTok, the judge said it appears as though it could
be a fairly significant deprivation of due process. And I expect that, you know, if and when we are ultimately allowed to see the judge's reasoning,
that that could be a key part of it.
ASHER: And so, how is the administration itself responding about the injunction?
FUND: Well, the government is saying it's going to continue to fight this lawsuit. It's saying that, you know, it continues to believe that TikTok
represents a risk to national security, because of TikTok's Chinese ownership. Now, of course, even as all of this is going on, TikTok and the
government are negotiating a potential deal that is designed to address some of those national security concerns.
And under this deal, TikTok would be owned by Oracle and Walmart, as well as some of TikTok's Chinese investors in a way that would allow TikTok to
be owned by a majority of U.S. investors, thereby, potentially resolving the Trump administration's concerns. That deal is not yet final. So, this
ruling from the judge is really important because it would allow TikTok users to continue receiving app updates, even while the government and
these companies negotiate on a final deal.
ASHER: Brian Fung live for us there, thank you so much. The President of Microsoft says that he's disappointed the company couldn't reach a deal
with TikTok. Brad Smith says that he hopes all sides can learn some important lessons from the saga. He spoke to "FIRST MOVE'S" Julia
Chatterley.
(BEGIN VIDEO CLIP)
BRAD SMITH, PRESIDENT, MICROSOFT: We came away frankly, with an enormous appreciation for TikTok as a service, for the importance of its users. And
I think, frankly, for two things. One is really, you know, creating a model that would do for TikTok users what they want, what they need and love
about the service, while protecting national security, preserving privacy, protecting digital safety, authenticity, transparency, and the like. And,
you know, we learned a lot by working with ByteDance to fashion that model.
Now, obviously, we were disappointed when, you know, ByteDance went in a different direction. We were disappointed, but we couldn't pursue this with
Walmart, because I just think they're a tremendously important company, when we think about the future of e-commerce. But I think there's a second
thing that we'll all continue to follow.
And I think Microsoft will probably contribute to in other ways, we do need a new technology model. So, that technology that is created in, say, China
and comes to the United States, or that's created in the United States and goes to China, can do so in a way that benefits consumers, but really
satisfies the need for trust around security and privacy and the like. And you know, this is a bit of a roller coaster for all of us, but I hope that
as we continue to traverse it, we'll see that kind of model emerge.
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR: I like the idea of a model for protecting data in whichever country but also the relationship over
technology between the two nations going forward. I will never be forgiven by the gaming enthusiasts, among my friends and colleagues, if I didn't ask
you about the Bethesda softworks deal. Obviously, a gaming software company as part of the $7-1/2 billion deal with ZeniMax Media. Brad, talk to me
about the vision for gaming. And just to add on to that, can you tell me if any of these games will be exclusive to Xbox and P.C. in the future? You
see, I was given that question.
SMITH: Well, yes, we won't talk today about, you know, which titles will be on which platform, but I think your question about the vision is the right
one. Interestingly enough, we kicked off the TikTok and Bethesda ZeniMax negotiations at precisely the same time. And we were really delighted to be
able to reach this agreement with ZeniMax and bring Bethesda into the Microsoft family. You know, we have a new console coming out in the coming
months. It really is a cutting-edge piece of technology for the, you know, not just tens but hundreds of millions of people around the world that
enjoy gaming, will have a broader portfolio of games than ever before.
And our vision in part is that you'll be able to play a game on any platform that's part of our xCloud initiative, whether it's on a phone or a
PC or console, and you'll be able to get a subscription that will give you access to many, many more of the games than you would otherwise have. And
so, what you really see us doing is broadening the opportunity for people to participate in, you know, what is one of the world's, you know, greatest
entertainment and leisure time activities, and is continuing to grow rapidly.
(END VIDEO CLIP)
ASHER: The CEO of Dubai Ports World sat down for an interview with our emerging markets business editor. Up Next, we'll hear his thoughts about
how the Abraham accords are changing business for the better in the Middle East.
[15:50:14]
(COMMERCIAL BREAK)
ASHER: New diplomatic relations between Israel and the United Arab Emirates are having a ripple effect on life and trade in the Middle East. The
Abraham Accords as they're known could help several economic sectors, including shipping, technology, and banking. The chairman of Dubai Ports
World says they will make the region much more secure. He spoke with John Defterios. Take a listen.
(BEGIN VIDEOTAPE)
SULTAN AHMED BIN SULAYEM, GROUP CHAIRMAN & CEO, DP WORLD: We have been wasting our time in confrontation. And we can cold war or hot war, it
didn't work. For us, at least. And we believe that this is going to strengthen their position in resolving this issue. In the meantime, as UAE,
we are looking at an opportunity that can come out of this that help both.
JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: Many believe that you signed a number of M.O. use and it's, as we say, in English, window
dressing, a lot of show nothing inside. What's the counter argument to that what's been signed so far?
SULAYEM: Not at all. Actually, one thing you know, in UAE we don't waste your time in M.O. use. M.O. use are just a kind of document to set the pace
for what you're going to do. What we know it's going to do. We know the business. And we know how we can get the business. It is about technology,
adaption. It's about logistics. It's about connection. It's about ability of both to take and do business. We need something from them in technology.
They need something from us. They need our market. They need our location. They need to learn how we do business in UAE, because the way we do our
business is totally different. They've been in isolation for a long time.
DEFTERIOS: It's my understanding that Jebel Ali was so important that they didn't want to sign the agreement unless this was part of it. What's the
strategy behind it, does it allow Israeli companies to come into the free zone, assemble parts, manufacturer products in the future?
SULAYEM: Obviously, all of the above. Jebel Ali is a very active business community with far reaching markets. We look at India, Pakistan,
Bangladesh, Sri Lanka, and the surrounding, you get over almost over 2 billion people. That is a market they like to reach. And the beauty is that
reaching that market is so easy.
[15:55:15]
DEFTERIOS: Will this new accord with Israel with the united front between the Gulf states that's developing and Israel, actually lead to peace with
Iran, because it was a big trading partner prior to sanctions for Dubai?
SULAYEM: I think any development in business between Israel is going to have a positive effect in the region. As people create more business,
everybody will benefit. And who knows, it could be a positive step for them to maybe find a way to get out of this sanctions (INAUDIBLE)
DEFTERIOS: Does it make the region because of the business ties that have been developed by the UAE in Israel, more secure or less secure?
SULAYEM: The region is going to be more secure. Instead of disagreeing with people, why don't we agree -- at least look at what we agree on? Why do we
look at it differently? This will impact making people life better. Who can disagree with that?
(END VIDEOTAPE)
ASHER: All right. Trading is almost over on Wall Street just four minutes to go, and we are still waiting to see if Donald Trump takes questions at
the White House in a moment, just one day after that bombshell report in the New York Times with his tax returns, questions are still swirling about
how on earth a U.S. President managed to pay only $750 in taxes in his first two years as president. All of this dropping on the eve of the first
presidential debate between Donald Trump and Joe Biden. We'll see if his supporters end up having a sudden change of heart. All of that and more
after the break.
(COMMERCIAL BREAK)
END
