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On Sunday, the New York Times dropped its report on two decades of Donald Trump’s tax returns, meticulously building a narrative of the Trump family’s real estate empire. Part of what these documents reveal are mounting debts in the hundreds of millions of dollars, all of which are scheduled to come due to places like Deutsche Bank in the next few years. Another part reveals that when the president entered the Oval Office in 2017, he was paying almost nothing in federal income tax. Reporters have chased these records, and their revelations, for years. The question now is, do they have the power to reshape what we think we know about a man a lot of us have already made up our minds about? And what may we be missing from this story? To figure it out, I spoke with Andrea Bernstein, who co-hosts the Trump, Inc. podcast for WNYC and ProPublica and has written a book on the finances of the Kushner and Trump families, for Wednesday’s episode of What Next. Our conversation has been edited and condensed for clarity.
Andrea Bernstein: I think what is emerging is the extent of the financial pressure that is now on Trump. We have never had a situation in modern history where a president is so keenly aware of the effects of his possible reelection on his bottom line. If he’s reelected, what are these banks gonna do? Are they going to say that the president of the United States is in default? Or are they going to let it go? Either way is bad because you can just imagine all the conflicts that can flow from that. We have a man who’s already shown himself to be desperate to win, who says he’s not sure if he’s going to concede. And now we understand the financial stake for Donald Trump, as well as the personal stake, in wanting to win the election.
Mary Harris: I’m wondering if you think there are any threads you’ve seen that aren’t getting the attention they should.
There are a couple of things that I think are important to keep in mind. One is that the Trump family business was built with the support of U.S. taxpayers. There would not be a Fred Trump, Donald Trump, Don Jr., Eric, or any of them had Fred Trump not been able to turn to the U.S. government during World War II and after to get federally backed loans to build basically moderate-income housing in the outer boroughs of New York, and Brooklyn and Queens.
That’s something you’ve reported, and that’s something you could see from this last release of documents the Times did.
Fred Trump was called before the Senate Banking Committee to testify on an investigation it was doing into federally backed loans, because one of the things that became clear was that it wasn’t like anybody could go to the Federal Housing Agency and say, “Give me a loan.” That was controlled by political figures in each area. And Fred Trump curried favor with the New York administrator and got a disproportionate amount of loans for being a single developer in New York. It was taxpayers who built up the Trump empire.
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One of the most shocking findings from the president’s tax documents is that back in 2010, after not paying taxes for years, Trump actually received a tax refund totaling almost $73 million. How does something like that even happen?
It’s indicative of the two trends that have really affected Donald Trump. One is that in this country, starting in the ’70s and really accelerating under Reagan, there was a real shift in how people felt about paying taxes. There’s this famous speech that FDR gave in which he said paying taxes is the wages of being a member of civilization, of being a member of civilized society. That’s what people used to think, like it was their patriotic duty to pay taxes, that they were supporting institutions that would lift up everybody, like infrastructure and schools. These weren’t just benefits that were helping a single family. This was collective action that was making society better for each successive generation. There was a real backlash to that, which accelerated under Reagan. We have now lived through 40-plus years of hearing that taxes are terrible, don’t pay taxes.
So you have that broad social trend going on. And then you have this specific Trump family ethos of taking delight in avoiding the taxman through legal and what appear to be extralegal ways. That is something that has gone on in the Trump family for generations.
I haven’t asked any voters in the past few days how they feel about the recent disclosures. But in 2016, when it came out that he paid zero taxes [in 1978 and ’79] and I did talk to voters, people would say: He’s just taking advantage of the laws as they exist. He’s doing what is necessary to protect his family. There was almost a sense of envy that he was smart enough to figure out how to do it.
If there’s one thing that becomes clear in the Times’ reporting, it is that Trump sees the American tax system as a kind of game. But that means the information revealed here might be something of a bluff, because the more Trump’s worth on public disclosures, the higher his profile, the more people want to lend to him. But on tax documents, bigger losses really pay off.
Michael Cohen, Trump’s former personal attorney and a former vice president at the Trump organization, has essentially said that Trump kept two sets of books. He didn’t say it that way, but he basically said that Trump would inflate values on statements when he wanted to get loans when it would benefit him, and deflate them when he didn’t want to pay out money on tax forms. We have actually found some examples of that: When he was seeking to borrow money for certain properties, 40 Wall St. and his hotel on Columbus Circle, he said the properties were doing well and getting a lot of income. And then when he filed documents with the city, he did not say that.
What’s the truth? The Times reporters are saying very solidly that they’re talking about a tightening financial vice on the president, which is quite the assertion. But do we know that?
What Trump is sort of saying is that these are business losses, but they don’t actually reflect the success of the business. He hasn’t exactly said it in so many words, but that is the essence: I’m not really losing money. But there are also other documents in the public record, some that have been filed with U.K. authorities, that reflect losses. And one of the things we noticed looking at those U.K. documents and comparing them with his U.S. disclosures is that they didn’t match. The U.K. documents said red; the U.S. documents said in the black.
I think one of the things that’s so frustrating about Trump so far successfully blocking the Manhattan district attorney getting the documents is that that’s the forum where all this could be tested. They could seek witnesses. They could seek other documents.
I think one of the things that’s so frustrating for the casual observer is most people are so used to either having money or not. What comes through to me from this reporting is that when you are as rich as Donald Trump, that’s not even the question: Looking rich creates actual richness. I think it’s hard for people to grasp, like, how can it be he’s losing all this money when he looks so rich?
I think it’s a really interesting thing because his whole business model has been building his brand, building faith in his brand, and therefore getting money from partners and lenders and licensers and customers and students at Trump University—getting money from these people and then losing money. And when it comes time to pay people back, they get pennies on the dollar.
I don’t know what you would legally call it, because it isn’t a class by itself. But this brings us to another thing that I hope people think more about: Who are the victims? Who loses out when Trump doesn’t pay taxes? I mean, the New York Times did point out that these taxpayer losses are not negligible and they could pay for a lot of things that Trump is not paying for. But look at the overall business model that emerges from his tax returns: He has money and keeps pouring it into these money-losing businesses and then, at every step of the way, making somebody else hold the bag. Something that was talked about in the NYT story had to do with his licensing deals and a company called ACN that made video phones. It’s been accused of being a kind of multilevel marketing scheme. There’s a case going on right now in federal court, and the people who bought into this scheme are not a lot of people with means: One is homeless, and one is a home health aide. They said they bought into this scheme because Donald Trump endorsed it. Then we learned from the tax returns that Trump made $8 million to $9 million from ACN. He is making a lot of money, and people who really don’t have money are losing money. I would like to see more discussion of this. Who are the victims when Donald Trump doesn’t pay?
Does the source of money ever dry up? He’s been through the original source of money being Fred Trump, spent all that money, went to banks, spent all that money, went to Deutsche Bank because it was in a specific situation and it agreed to lend him money with reservations. The Apprentice was a place he got some money. When did those sources no longer exist anymore?
I think this is the conundrum of our times, that his reelection determines what he can take and use to have a source of funding in a very direct way.
There’s a situation where the whole world knows how badly he is in debt, and there is a structural incentive for foreign governments, potentially hostile ones, to give Trump money as long as he’s president and profiting from his company—not to donate to his campaign. That situation exists now. It’s existed all through his presidency. And if he wins reelection, it’s only going to be starker because it’ll be clear that there’s no way to hold him to account.
Looming large over this story is a bigger question: Is what Donald Trump did on his taxes criminal? Is it fraud?
Laying out a criminal tax count is complicated. You don’t actually understand what’s in the tax documents until you do a full investigation that can really fill that out. The New York Times has the tax documents. The question is, what happens next? The fact that the NYT has been working for four or five years to get these documents is the problem. We all should have had the taxes, and we would if the system were working. That’s what the problem is here.
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