The New York Times rocked Washington on Sunday afternoon when it published a stunningly detailed investigation into President Donald Trump’s taxes that revealed just how little the self-proclaimed billionaire has paid in taxes over the years. Reporters have been trying to get their hands on Trump’s tax returns for years, and the New York Times obtained tax-return data spanning more than two decades for Trump and his business organization that involves hundreds of companies. And through those documents it has been able to detail just how Trump was able to sell an image of wealth over the years despite losing money left and right while he used financial maneuvers to lower his tax bill. “Ultimately, Mr. Trump has been more successful playing a business mogul than being one in real life,” notes the Times.
The Sunday piece is the first in what appears will be a series of stories on Trump’s finances. And the numbers are not favorable to a president who has billed himself as a successful businessman. “Indeed, his financial condition when he announced his run for president in 2015 lends some credence to the notion that his long-shot campaign was at least in part a gambit to reanimate the marketability of his name,” reads one of the most devastating passages from the piece. And when his ventures did make money, Trump often was able to avoid paying taxes by implementing questionable accounting maneuvers. Trump quickly criticized the story, holding a news conference shortly after the Times published its piece online and characterizing it as a hit piece. “Totally fake news,” he said. Here are some of the biggest revelations from the story:
Trump paid $750 in federal income taxes in 2016 and 2017.
One of the most startling revelations of the report and what is likely to garner the most headlines is just how little in tax Trump paid over the years. In 11 of the 18 years that the Times reporters examined, Trump paid no federal income tax. In 2016 and 2017, his first two years in the White House, Trump paid a paltry $750 in federal income taxes. How did he do it? Simple: “largely because he reported losing much more money than he made.” The fact that many of his businesses, including his golf courses, lost so much money over the years, helped keep his tax bill low.
Becoming a TV star gave Trump a much-needed lifeline.
The Apprentice and its related licensing and endorsement deals gave Trump $427.4 million. He largely poured that into businesses that have “steadily devoured cash.”
Trump’s lavish lifestyle is largely deducted from his taxes.
Even as he was struggling financially, Trump was able to maintain a lavish lifestyle and classify it as a business expense. Things that most classify as personal expenses have been classified as necessary for his business. Haircuts are a business expense to Trump, for example. Properties are often classified as businesses even if they are used as personal residences.
Trump pays more to foreign governments than the U.S.
Even as he managed to keep his U.S. tax bill low as president, Trump has paid much more to other countries. In 2017, for example, his companies paid $156,824 in the Philippines, $145,500 in India, and $15,598 in Panama.
Family members are often consultants.
Trump appears to have turned it into a common practice to treat family members as consultants in order to reduce his tax liabilities. By cross-referencing documents with financial disclosures from Ivanka Trump, the Times was able to figure out that the amount she received from a consulting company matched up exactly with deductions that the Trump Organization had claimed as consulting fees.
The presidency has been good for business.
Trump often complains he loses money by being president, but that is far from the truth. His Mar-a-Lago club in Florida, for example, saw a surge in membership after he became president. Some businesses and lobbyists have spent large amounts of cash in Trump’s businesses even as they sought changes to regulation. He has also continued to get lots of money from projects abroad, including from Turkey, the Philippines, and India.
Trump is being audited for a huge refund.
Over the 18 years that the Times analyzed, Trump paid almost $95 million in federal income taxes. But he later got a $72.9 million tax refund and that has been the subject of an IRS audit that began in 2011 and has still not been resolved. If he loses, it could cost him more than $100 million. Trump has often cited the audit as the reason why he can’t release his returns, but many have disputed that assertion.
Trump has hundreds of millions in loans that could come due in a hypothetical second term.
Trump seems to be personally responsible for loans totaling $421 million, much of which will be due in the next four years. “Should he win re-election, his lenders could be placed in the unprecedented position of weighing whether to foreclose on a sitting president,” notes the Times.