Trump’s long-hidden tax returns make him look like a terrible businessman, or a cheat. Probably both.
Until President Trump, that is.
And now it may be clear why. Bombshell reporting Sunday from the New York Times — based on the examination of thousands of personal and business tax records — suggests that Trump, like his disgraced predecessor, engaged in a lot of financial activity that also looks pretty crooked.
Trump reportedly paid only $750 in federal income taxes in 2016 and 2017, and none at all in 10 of the previous 15 years.
Remember when Mitt Romney was caught on tape condemning the moochers of America, the 47 percent who pay no income taxes? Turns out he was talking about Trump.
Trump claimed no tax liability for so many years because, according to the documents reviewed by the Times, he sustained mindbogglingly huge, chronic losses. The magnitude of these reported losses suggests he has been a thoroughly incompetent businessman or has been cheating Uncle Sam.
Most likely both.
Alan Garten, an attorney for the Trump Organization, said the Times report was inaccurate, and that Trump has paid “tens of millions of dollars in personal taxes to the federal government,” a characterization that appears to conflate income tax payments with other kinds of taxes (such as those for Social Security). For his part, Trump has previously argued that shirking his tax obligations made him “smart.” He suggested that he merely took advantage of legal loopholes, the kind available to deep-pocketed Americans who can afford top-notch tax preparation advice. And as I’ve written before, the real estate industry enjoys tons of loopholes and other opportunities for legally minimizing tax obligations, most notably through depreciation deductions. But per the Times, Trump’s “three European golf courses, the Washington hotel, Doral and Trump Corporation reported losing a total of $150.3 million from 2010 through 2018, without including depreciation as an expense.”
That is: They were money pits.
Additionally, Times reporters Russ Buettner, Susanne Craig and Mike McIntire include details of tax practices that were, at best, extraordinarily aggressive and, at worst, suggest possible fraud on a massive scale.
These include deducting lifestyle expenses, such as the cost of haircuts, as if they were business expenses. Or appearing to pay Ivanka Trump consulting fees on the same hotel deals that she helped manage as part of her job at her father’s business, an arrangement that may have been a way to transfer assets without paying gift taxes.
Or, writing off $2.2 million in property taxes as a business expense supposedly on an investment property that appears to instead be a vacation residence. According to the Times:
The tax records reveal another way Seven Springs has generated substantial tax savings. In 2014, Mr. Trump classified the estate as an investment property, as distinct from a personal residence. Since then, he has written off $2.2 million in property taxes as a business expense — even as his 2017 tax law allowed individuals to write off only $10,000 in property taxes a year.
Courts have held that to treat residences as businesses for tax purposes, owners must show that they have “an actual and honest objective of making a profit,” typically by making substantial efforts to rent the property and eventually generating income.
Whether or not Seven Springs fits those criteria, the Trumps have described the property somewhat differently.
In 2014, Eric Trump told Forbes that “this is really our compound.” Growing up, he and his brother Donald Jr. spent many summers there, riding all-terrain vehicles and fishing on a nearby lake. At one point, the brothers took up residence in a carriage house on the property. “It was home base for us for a long, long time,” Eric told Forbes.
Now, it’s unclear whether voters will care, after all this time, that Trump has apparently paid less in taxes than the typical teacher, waitress, retail clerk or whoever else was usually cast as “moochers” and “takers.” Trump supporters seem willing to forgive almost anything; and taxes may seem too arcane for the general public to care about, especially if voters believe Trump’s spin that he practiced “smart” tax avoidance rather than illegal tax evasion.
But a few other points are worth considering.
Even Trump joined Romney once upon a time in demonizing Americans who didn’t contribute adequately to Treasury coffers:
And when asked what really bothers them about the tax system, Americans’ top complaints aren’t that the poor are shirking, or that the tax code is too complicated, or even that their own tax bills are too big. They’re mad that corporations and the wealthy aren’t paying their “fair share,” legally or otherwise.
Let’s consider Trump’s tax bill in another context: Trump spent 87 times as much to allegedly pay off his porn-star mistress as he paid in federal income taxes in 2016 and 2017, combined. Those taxes fund our military, roads, health-care system, etc. It’s hard to imagine such numbers sitting well with most Americans.
Whatever the optics surrounding fairness, the reason the public should care most, as I have long argued, involves conflicts of interest. These financial entanglements — whom the president is getting money from, owes money to and on what terms — are likely influencing executive-branch policy, presumably rigging it in favor of cronies and creditors and against the public welfare.
The Times report documents conflicts of interest up the wazoo. Previous reporting has revealed as much, though not with such precise dollar figures. Hordes of people and corporations have bought access to the president by patronizing Trump properties, such as Mar-a-Lago (his Palm Beach social club) or Trump National Doral (a golf resort near Miami):
Profits [at Mar-a-Lago] rose sharply after Mr. Trump declared his candidacy, as courtiers eagerly joining up brought a tenfold rise in cash from initiation fees — from $664,000 in 2014 to just under $6 million in 2016, even before Mr. Trump doubled the cost of initiation in January 2017.
Some of the largest payments from business groups for events or conferences at Mar-a-Lago and other Trump properties have come since Mr. Trump became president, the tax records show.
At Doral, Mr. Trump collected a total of at least $7 million in 2015 and 2016 from Bank of America, and at least $1.2 million in 2017 and 2018 from a trade association representing food retailers and wholesalers. The U.S. Chamber of Commerce paid Doral at least $406,599 in 2018.
Those buying access, and presumably hoping for favors, included executives, lobbyists and foreign nationals. Exactly how much their patronage to Trump businesses might be influencing policy is unclear, though there have been plenty of hints.
Additionally, the Times reports that Trump is personally responsible for loans and other debts totaling $421 million, most of which comes due within four years. If Trump were still in the White House during that time, this creates some bad incentives. (The article does not provide details, alas, on the identity of all those lenders; hopefully, more reporting is forthcoming.) Further, an Internal Revenue Service audit over the legitimacy of a $72.9 million tax refund he received a decade ago has taken an unusually long time to resolve, possibly indicating it has stalled or been paused while Trump remains in office; an adverse ruling could cost him more than $100 million, the Times estimates, inclusive of interest and possible penalties.
One might reasonably wonder why Trump, who appears to tweet, watch TV and golf more than he exercises his duties as president, has ever wanted a second term. Well, in addition to his desire to finally build his border wall or continue dodging potential indictments, we now know that Trump has about a half-billion dollars’ worth of motivation to stay in office four more years.
As Nixon advised decades ago, Americans have a right to know whether their president is a crook. As Trump’s tax returns illustrate, Americans should know whether their president is governing in the people’s interests, or his own.
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