Three years after he resigned from the White House, Richard Nixon offered this advice: “Make sure you pay your taxes.” He had refused to make his tax returns public during his two successful presidential runs. Then, in his second term, Congress looked into his filings amid suspicions raised about his deductions. “I am not a crook,” he declared, but the inquiry concluded he owed almost half a million dollars. Ultimately, the Watergate scandal, which broke just before the tax controversy, forced him to quit in 1974. Since then, every major party presidential nominee-except Gerald Ford-has volunteered at least one tax return to buttress claims of civic responsibility and rectitude. The disclosures have become stingier in recent years-culminating in Donald Trump’s complete refusal to release his (he says he’s being audited and will do so once the IRS is done). But the snippets we’ve gleaned from the most recent Republican nominees-including Trump-offer lessons in how obscure tax planning strategies benefit the well-to-do, yet are mostly out of ordinary Americans’ reach. In 2012, Mitt Romney had to be pressured to release his. His opponent Barack Obama had made more than a decade of returns public. However, Romney released only two years of tax returns for himself and his various trusts. He kept earlier years out of public view. At that time, I wrote two articles about a variety of tax avoidance techniques used by Romney. They were transactions the average American likely didn’t even know existed. He used one type of trust that permitted him to take advantage of the tax-exempt status of the Mormon church without actually giving away much money. (Congress cracked down on the shelter the year after Romney set his up.) Another type of trust, known as “I Dig It”-short for “intentionally defective grantor trust”-allowed him to avoid estate and gift taxes on a pile of shares left for his children and grandchildren. By the time he made his remark about how 47 percent of Americans don’t pay income taxes yet benefit from government programs, Romney had cornered himself into the elite 1 Percent, out of touch with the rest of the country. Now come Trump’s taxes-or the lack of them. The New York Times on Oct. 1 published portions of his 1995 returns, leaked to the paper from an unknown source. (Trump’s campaign hasn’t questioned the documents’ authenticity, and his accountant at the time, now retired, said they appeared to be genuine, the Times reported.) On the line where most people report income, Trump indicated losses of roughly $916 million. It’s a huge amount and a pattern of losses consistent with previous reports from New Jersey state gambling regulators. Those reports, which were based on Trump’s tax information, suggested he’d had enough losses to be able to avoid any federal tax liability for four years in the late 1970s and early 1990s, according to accounts by the Washington Post and Politico. Trump hasn’t offered any explanation for the whopping loss reported on the 1995 forms. But here’s what probably happened: In the early 1990s, his real estate and casino empire was awash in debt he and his companies couldn’t repay, and two of those companies filed for bankruptcy in 1991 and 1992. Trump generated what are known as net operating losses. If you own a business and lose money one year, you’re generally able to use some portion of that loss as a deduction to offset your tax bills on income in future years. Back in the early ’90s, Congress limited the use of those losses to 15 years going forward and three years going back. The 1995 documents show Trump had enough losses to ensure he wouldn’t have to pay taxes at all on $916 million of income over as many as 18 years. Although he may have legitimately deducted the $916 million in losses, there’s something more troubling: The really big tax benefit available to Trump isn’t that he could take massive deductions after losing a ton of money. It’s that he could lose other people’s money-but claim the deductions for himself. Based on what we know from bankruptcy filing disclosures about his borrowing and the well-documented collapse of his real estate empire in the early ’90s, this is probably what happened, says Edward Kleinbard, a professor of tax law at the University of Southern California and former chief of staff for the congressional Joint Committee on Taxation. Trump’s almost $1 billion loss reported on the tax documents was likely the result of “straightforward bad real estate investing cushioned by extremely generous tax rules,” says Kleinbard. “Yes, there was a real economic loss, but it was other people’s money that got lost. And by virtue of these complex rules, he got to use the tax loss attributable to losing other people’s money.” At a September rally, Trump bragged about his practice of using “other people’s money,” or “OPM.” (Of course, without access to Trump’s federal tax returns, it’s impossible to know what deductions he claimed. A spokeswoman for the campaign didn’t respond to requests for comment.) As Trump negotiated with his creditors, some of them forgave substantial loans they’d made to him and his businesses. Normally, canceled debts should translate into taxable income. Think of it this way: When you take out a $500,000 mortgage, you don’t owe any income tax, because you’re repaying borrowed money. But if the bank forgives the debt, in the eyes of the IRS, that’s like your employer simply giving you $500,000 in compensation. There are exceptions-if you’re insolvent; or, beginning in 1993, by virtue of a tax code change, if your canceled debts were loans related to real estate. The new law came after lobbying by the real estate industry, which was in the depths of a crisis. While Trump’s losses may have been built on borrowed money, average wage earners generally aren’t able to use such tax benefits for their regular income. Until the mid-’80s, most taxpayers could average out their good and bad years and use the bad times to offset taxes owed in the good. But since the Tax Reform Act of 1986, that averaging benefit exists pretty much only for business owners-small ones, too, not just Trump-but not for typical workers. This particularly hurts low-income people, who are more likely to have big yearly fluctuations in their earnings, says Lily Batchelder, a tax law professor at New York University and former majority chief tax counsel for the Senate Finance Committee. For example, she found that the after-tax income of a single mother with two children who earned $35,000 in one year and none in the next would be $8,980 higher if she’d been permitted to average her income over two years. We are burdening people with higher tax payments if they have volatile income, and lower- and middle-income people tend to have bigger swings,” says Batchelder. In the 1980s, the restrictions made some sense, because letting people average their income over several years was an administrative nightmare for an already overburdened IRS. Now, in the age of TurboTax and other software, there’s much less justification to disallow income averaging. (For their part, Bill and Hillary Clinton reported an effective tax rate of about 34 percent of their $10.6 million adjusted gross income in 2015; most of that income came from speaking fees, which is taxed like ordinary income.) Trump bragged in his first debate with Clinton that not paying taxes made him “smart.” Even as his campaign scrambled to counteract the Times story, the candidate crowed on Oct. 3: “I was able to use the tax laws in this country and my business acumen to dig out of the real estate mess. Few others were able to do what I did.” The next few weeks will show if that strategy works electorally. “From a policy perspective, this is a guy who is definitely trying to get the maximum benefit the tax code offers,” says Bryan Skarlatos, a tax litigation attorney at Kostelanetz & Fink. “Maybe if you are going to use the tax system to squeeze out the maximum benefits possible that are available to only a small class of people, you shouldn’t be president. Or you should say you will change the system to make it more fair. Or you should explain why you think it is appropriate for that system to be there.”