Trump’s Tax Returns: What We Know So Far
President Donald Trump, who ran his campaign as a successful businessman, is now facing credible accusations of avoiding income taxes. The New York Times on Sept. 29, 2020, published an article stating that Trump only paid $750 in taxes in 2016 and 2017, and completely avoided taxes for nearly 10 out of the previous 15 years. Trump’s successful business career may slowly be deteriorating. According to The NYT, which has obtained about 20 years of Trump’s tax records, Trump owns hundreds of millions dollars worth of assets, which starkly contrasts with the amount he paid in income taxes. His citing of major losses to obtain tax reductions leads to the question of how this has not affected his extravagant lifestyle or his boasting about a successful business empire.
Alan Garten, one of Trump’s lawyers, responded to the NYT with the following statement
“Over the past decade, President Trump has paid tens of millions of dollars in personal taxes to the federal government, including paying millions in personal taxes since announcing his candidacy in 2015,” However, these numbers include personal taxes, which should not be mistaken for income taxes.
Tax avoidance can be connected to a statement the president made in 2016, in which he said that avoiding taxes makes him “smart.” He managed to get a $70 million dollar tax break, which is now being investigated over its legitimacy by the IRS. His former lawyer, Michael Cohen, testified that President Trump bragged “that he could not believe how stupid the government was for giving someone like him that much money back.”
Trump’s business empire may have been funded by his reality tv show, where his on-screen businessman persona was more successful than in reality. Trump made a large portion of his income through his show, The Apprentice, which was then used to fund his other properties, such as his many golf courses and hotel chain. His taxes also indicate he has lost $315.6 million on his golf courses alone since 2000, or that is at least what Trump reported which aided him in lowering taxes. Most of Trump’s enterprises report losing millions yearly, yet Trump announced in his disclosure that he had made at least $434.9 million, a stark contradiction to the tax reports that indicate $47.4 million in losses,The money from The Apprentice and subsequent licensing deals continue to deplete, and many of his stocks have already been sold, leaving many to wonder what will happen to his failing businesses and properties.The $100 million Trump Tower mortgage being due soon, combined with possibly owing money back to the government, and hundreds of millions in other personal loans, the tax returns show that Trump may owe up to $421 million. It remains unclear how strained his finances are, and what his full tax records contain. The NYT refused to provide the tax returns in order to protect its sources.
However, the records show that the money from The Apprentice was invested into multiple business endeavors, which would then be written off as losses in order to keep the $600 million dollars originally earned from the show from being taxed. Between 1985 and 1994, Trump has lost more money than any other American taxpayer. The president declared losses of $915.7 million, which could’ve given him a tax deduction that could have allowed him to avoid federal income taxes for almost 20 years. This is due to a tax code that allows business owners to be able to carry over previous losses to get a tax break. They can point out a previous year where they lost money, and apply it in the future to lower their taxes.
From 2005-2007, when he made $120 million from deals and endorsements and had no losses to report, he was taxed 70.1 million. Garten also said the following in response to the NYT “While you claim that President Trump paid no taxes in 10 of the 15 previous years, you also assert that President Trump claimed a massive refund for tens of millions for taxes he did pay. These two claims are entirely inconsistent and, in any event, not supported by the facts.”
Another eye-catching field on Trump’s taxes was what he used as business expenses previously, which are meant to be “ordinary and necessary”. Some of these expenses include the President’s $70,000 fees on hair styling appointments and his daughter’s $95,464 from her own hair and make-up stylists during The Apprentice.
He also used his purchase of the Seven Springs property, intended to be a golf course, club house and a series of private houses, as a charitable write off. The surrounding residents were concerned about traffic and water pollution, therefore he made a deal with a land conservancy to not develop most of the land, and in return received a $21.1 million dollar charitable deduction. He also claimed this was not a personal residence, but rather an investment property which resulted in a write-off of $2.2 million. Usually, one would have to rent out the property or find another way to generate income from it. However, Eric Trump claims it was a “home base” and how he basically grew up there, as his family used it as a “retreat.”
Trump’s tax reports also have write-offs for business expenses that included legal fees to represent the President during the Russia investigation. However, the IRS states that “legal fees paid to defend charges that arise from participation in a political campaign,” cannot be used in a write-off as a part of personal business expenses.
Trump tweeted the following in response to the whole controversy
“The Fake News Media, just like Election time 2016, is bringing up my Taxes & all sorts of other nonsense with illegally obtained information & only bad intent. I paid many millions of dollars in taxes but was entitled, like everyone else, to depreciation & tax credits.”
While it is not a requirement to display tax returns as a major presidential candidate, Trump is the first in 40 years to not disclose his tax returns, citing that they are being audited, and therefore he cannot do so. However, there is nothing that forbids one from disclosing taxes while being audited. Many Americans believe that they deserve full transparency, as Kamala Harris pointed out at her debate. In an interview with MSNBC, she said the following:
“The American people have a right to know that when the president of the United States acts, he acts with their priorities in mind, not with his priorities in mind,” she said. “And we’ve already known that he puts his political priorities in front of the American people.”
At the first presidential debate, on Sept 29, 2020, the President was asked how much he paid in income taxes, to which he responded that he has paid millions and will show his tax returns.
At the last debate, on October 23. 2020, Former Vice President Joe Biden stated
“I released all my tax returns. Twenty-two years go look at them. You have not released a single solitary year of your tax return. What are you hiding? Why are you unwilling? The foreign countries are paying you a lot. Russia is paying you a lot, China is paying you a lot, and your hotels, your businesses all around the country, all around the world. China is building a new road to a golf course you have overseas, so what’s going on? Release your tax return or stop talking about corruption.”
The President then responded with the following, yet a date of when the taxes would be made public remains unknown.
“First of all, I called my accountants under audit. I’m going to release them as soon as we can. I want to do it. And it will show how successful, how great this company is. But much more importantly than that, people were saying $750. I asked them a week ago. I said, what did I pay? They said sir, you prepaid tens of millions of dollars. I prepaid my tax.”