The Bottom Line on Trump’s Taxes

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S1: On Sunday night, when The New York Times dropped their epic report on two decades of Donald Trump’s tax returns, I saw this tweet start making the rounds. We go live now to the offices of the Trump Inc podcast. It read and then it attaches this gif of SpongeBob screaming while paper flies all around him.

S2: Is that what your yesterday was like?

S3: I actually feel like the last.

S1: Three years and eight months have been like that, Andrea Bernstein co-hosts Trumping Podcast, she works with ProPublica and WNYC to decode the Trump family’s financial records.

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S3: It’s like this constant incoming and masses of paper and more and more and more documents. And we’re like throwing them up in the air and we’re reading them. And it really did describe the atmosphere of just being under this constant blizzard of documents, some of which are revelatory and all of which require a large amount of attention.

S1: I don’t think you have to be a reporter to feel like you’re drowning in paperwork like this. There’s plenty of damning information about the Trump family going around. There are tell all books, the nearly 500 page Muehler report and now this reporting in The New York Times, which meticulously builds a narrative of the Trump family’s real estate empire over the last 20 years. What emerges from this work is a financial roller coaster that years when the family’s fortunes seem to surge, followed by fallow years when losses dominated the balance sheet. And as the president entered the Oval Office in 2017, he seemed to be in the middle of a fallow period, which meant he was paying almost nothing in federal income tax.

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S3: Their lead, of course, what his was that he paid seven hundred forty dollars one year and he paid seven hundred forty dollars the next year and out of in the decade before that. Nada. So that is obviously upsetting to those of us who pay taxes. Is that the lead you would have chosen? I think that it is attention getting. I think it’s really attention getting. I think it was a really smart lead. But I think what is emerging and what emerged in the New York Times story is the extent of the financial pressure that is now on Trump. We have never had a situation where a president is as keenly aware.

S1: Of the effects of his possible re-election on his bottom line in modern history, part of what these documents reveal are mounting debts, hundreds of millions of dollars, all of which are scheduled to come due to places like Deutsche Bank in the next few years.

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S3: So if he’s re-elected, what are these banks going to do or are they going to say that the president, the United States is in default? Or are they going to let it go either either way is bad anyway, is very, very bad because you can just imagine all the conflicts that can flow from that.

S2: So what you’re saying is that this election is very personally valuable to Donald Trump, right? Correct.

S3: So 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 an election.

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S4: Today on the show, Trump’s taxes. Reporters have been asking for them for four years now that a few of them have the documents in hand. Do they have the power to reshape what we think we know about a man many of us have already made up our minds about? I’m Mary Harris. You’re listening to what next? Stick with us.

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S1: The chase for Trump’s taxes has been going on for a long time, journalists were some of the first people asking for them. Then came prosecutors, and Trump thought these requests as hard as he could.

S3: And Trump kept suing and kept losing. He lost at the federal court level. He lost at the appeals court level and he lost at the U.S. Supreme Court.

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S1: These court battles are still going on. Trump’s being investigated by Congress and New York District Attorney Cy Vance. But by mounting an aggressive legal fight, Trump has managed to keep these documents out of public view. So one of my first questions to Andrea was, where does she think the Times got these tax filings?

S3: Anyway, the answer is I don’t know. But I do know where the past documents came from. And there’s this wonderful story in Mary Trump’s book where she talks about how Sue Craig, one of The New York Times reporters working on the team, went to her house and gave her her business card and said, I want to talk to you. And Mary Trump was like, well, I’ve never talked to reporters. I don’t want to talk to reporters. But you kept the card. She held on to it for a while. And then finally she’d call Sue Craig and she says, well, I don’t know how I can help you because I don’t have anything. And it was Sue Craig who told Mary Trump, your lawyer has them. And if you ask them, he has to give them to you, which is a brilliant act of reporting. So Mary Trump goes to her lawyer, gets the documents and puts them in a van or truck and hands them over to The New York Times. That’s how they got the round for their previous story about how Fred Trump had committed what they said at the time was outright fraud to transfer assets to his children without paying taxes. There could be any number of people who would have these documents and all that we know from The New York Times is that they got the documents from somebody who had legal access to them. Yeah, I mean, that doesn’t narrow it down at all, I guess. No, but, I mean, you know, it doesn’t narrow it down. And I understand the lengths that they would want to go to to protect their sources because, you know, over the years and over the course of reporting my book, American Oligarchs, I talked to scores of former Trump associates, almost all of them, not without reason, were afraid to go on the record. And the reason that they were afraid to go on the record is because many of them had had terrible experiences with Trump in which they lost money, lost their reputations, lost their livelihood or knew people who had. And they only saw Trump’s power increasing and they were afraid. So I understand The New York Times desire to protect how it got the information. I mean, and we don’t know. But the case of Mary Trump is instructive because that was a case in which someone had legal access to them. And these they were her documents and she turned them over.

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S2: There is so much here. I mean, you talked about this blizzard of paper that the Times must be swimming in at this point. I’m wondering if you think there any threads that you’ve seen that aren’t getting the attention they should. Like if there’s something in the reporting where you think, like, I wish more people were paying attention to this.

S3: Yes. Well, there’s a couple of things that I think that 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. There would not be a Donald Trump or an Ivanka Trump or Don Jr. or an Eric or any of that. Had not Fred Trump been able to turn to the U.S. government around the time of World War Two and after to get federally backed loans to build basically moderate income housing in the outer boroughs of New York and Brooklyn and Queens?

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S2: And that’s something you’ve reported, and that’s something that also you could sort of see from this last release of documents.

S3: The Times did write. You know, one of the things is that Fred Trump was called before the Senate Banking Committee to testify on an investigation they were doing into federally backed loans, because one of the things that the became clear was that it wasn’t like anybody could go to the the federal housing agency, the FHA, and say, give me a loan. They were controlled by political figures in each area. And Fred Trump really curried favor with the New York administrator and got a disproportionate amount of loans for being a single developer in New York. And so it was the taxpayers that built up the Trump empire.

S1: 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 dollars. How does something like that even happen?

S3: Well, I think it’s indicative of two things. I mean, I think it’s sort of 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 during or before the war in which he says paying taxes is the wages of being a member of civilization, of being a member of civilized society. Wow. And that’s what people used to think. People felt like it was their patriotic duty to pay taxes, that they were supporting institutions that would lift up everybody. They were supporting infrastructure. They were supporting 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. And that was the attitude. And there was a real backlash to that which accelerated under Reagan. We have now lived through 40 plus years of hearing. Taxes are terrible, don’t pay taxes. And of course, you know, the most recent combination was the Tax Cuts and Jobs Act of twenty seventeen, which was Trump’s sort of only big piece of legislation that he’s actually passed in his first term and that just cut taxes even more. So you have that broad social trend going on and then you have this specific Trump family ethos of taking delight in avoiding the tax man. Through legal and what appeared to be extra legal ways, and that is something that has gone on in the Trump family for generations.

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S2: I mean, I’m glad you’re talking about it this way, because you can see when Donald Trump in the last couple of days has talked about what he did here, it raises this question about what is the line between being savvy and being a swindler? Well, because he talks about it as I’m being smart, I’m entitled to this depreciation, to these tax credits. That’s what I’m doing here. That’s why I’m getting this huge check from the IRS. Now, that huge check is being audited right now, and there’s a chance he’d have to repay a hundred million dollars. But the point is, I’m just using the system as built.

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S3: Yes. And I haven’t asked anybody in the last few days how they’ve, you know, any voters, how they feel about the recent disclosures. But in 2016, when it came out that he paid zero taxes and I did talk to voters, people would say, supporters would say of Trump, they would say he’s just taking advantage of the laws as they exist. He’s doing what is necessary to protect his family. And there was a sense of almost envy that he was smart enough to figure out how to do it. And they had and people felt slightly ashamed. They sort of hadn’t figured out how to avoid paying taxes the way that Donald Trump had.

S1: If there’s one thing that becomes crystal clear in the Times reporting, it’s that Donald Trump sees the American tax system as a game. And that means the information revealed here could be something of a bluff, because the more Trump’s worth on public disclosures like his profile, the more people want to lend to him. But on tax documents, bigger losses can really pay off.

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S3: Michael Cohen, Trump’s former personal attorney and a former vice president at the Trump Organization, has said that Trump kept essentially two sets of books. He didn’t say it that way, but he basically said that Trump would inflate values on statements, for example, when he wanted to get loans, when it would benefit him and deflate them, when he didn’t want to pay out money on, say, tax forms and a Trump Inc. We have actually found some examples of that. What we found is that when he was seeking to borrow money for certain of his properties for the Wall Street and his hotel, Columbus Circle, he said that 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.

S2: So what’s the truth? Because the reporters for the Times are saying very solidly they’re talking about a tightening financial advise on the president, which is quite the assertion. But do we know that?

S3: Oh, yeah. I mean, you know, what Trump is saying essentially is that I’m just these are just sort of business losses, but they don’t actually reflect the success of my business. He hasn’t exactly said it in so many words. But that is the essence of what he’s saying, that I’m not really losing money. But we know from how he’s described things in his tax returns, from the consistency of them. I mean, you can have a business loss in one year and then make money and be a profitable businessman. That doesn’t reflect what happened to Trump. But there are also other documents in the public record. I mean, there are there are documents that have been filed with UK authorities that reflect losses. And one of the things that we noticed looking at those U.K. documents and comparing them to his U.S. disclosures is that they didn’t match the U.K. document said red ink, the U.S. documents that in the black. Why was that? Well, it’s hard to know motivation. I mean, a U.K. document is an official document filed with a government authority. So I think that the argument would be that is the most likely truthful document, whereas the disclosure forms that he files with the U.S. government, tell a story about his business empire to us, to the people that are looking at them, that he has an interest in making to look like is successful as possible. There’s no downside when he’s telling us how great he’s doing. But there might be when he’s disclosing documents to the U.K. or to New York, taxing authorities into these other places where we’ve seen them. So it it’s I mean, I think one of the things that’s so frustrating about the Trump so far, a successful. A blocking of the Manhattan D.A. getting the documents is that that’s the forum where that could be tested. What is the truth? And they could seek witnesses, they could seek other documents. They could get at that if Trump let them.

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S2: I think one of the things that’s so frustrating for the casual observer here is that most people are so used to either having money or not. It’s not it’s a pretty like hard to skate around thing. It’s either they’re in the bank account or it’s not. But what really comes through to me from this reporting is that when you are as rich as Donald Trump, that’s not even the question. Like looking rich creates actual richness. Yeah. And so it becomes this funny circle. And I think it’s hard for people to grasp it. Like, how can it be that he’s losing all this money when he looks so rich?

S3: Right. Well, I think it’s a really, really interesting thing because his whole business model has been building his brand and building faith in his brand and thereby getting money from partners and lenders and licensors and customers and students at Trump University and getting money from these people and then losing money. And when it comes time to paying people back, they get pennies on the dollar. I mean, it sounds like a Ponzi scheme. Yeah, I don’t know what you would legally call it because it is in a class by itself. But this brings us to sort of another thing that I think people are not paying. When I say people are not paying attention, it’s a sweeping statement. But another thing that I hope that comes out of the story and that people think more about is who are the victims? Who loses out when Trump doesn’t pay taxes? I mean, The New York Times did point out that taxpayer, these taxpayer losses are non-negotiable and they could go to pay for a lot of things that Donald Trump is not paying for. But when you look at the sort of overall business model that emerges from his tax returns, which is that he had money and now he has less money and he keeps pouring it into these money, losing businesses, then at every step of the way, making somebody else hold the bag. So obviously, in this case, it’s the taxpayer that over the course of his business, it has been bankers like maybe your heart doesn’t bleed for bankers, customers, people who bought his condos. OK, maybe you feel like those are rich people anyway and they made a deal and OK, so what if they lost out when they bought a condo? And you go all the way down to something that was talked about in the New York Times story and his licensing deals, where there’s a company called ACM that made video phones and they have been accused of being a kind of multilevel marketing scheme. And there’s a case that’s going on right now in federal court where the people who were bought in to this scheme, one of whom is homeless, one of whom is a home health aide, I think someone on welfare, not a lot of people means and they said we bought into this scheme because Donald Trump endorsed it and we learned that he made eight to nine million dollars from ACORN, from the Trump tax returns, according to The New York Times. So he is making a lot of money and people who really don’t have money are losing money. And I think what we I would like to see more discussion of is this who are the victims when Donald Trump doesn’t pay?

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S2: I guess the question becomes, does the source of money ever dry up because you’ve talked about this roller coaster 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 they were in a specific situation and they agreed to lend him money with reservations. You know, The Apprentice was a place he got some money, but when do those sources no longer exist anymore?

S1: Well, I think this is the conundrum of our times, is that his re-election determines whether he continues to have a source of funding in a very direct way.

S3: How so? Well, I mean, now there’s a situation where the whole world knows how badly he is in debt and it just gives them incentive to try to get more money into his pocket as long as he’s president and profiting from his company. There is a structural incentive for foreign governments, potentially hostile foreign governments, to give Trump money, not to donate to his campaign, but to give him money that goes into his pocket. And 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.

S1: Looming over this story is a bigger question. Is what Donald Trump did on his taxes criminal? Is it fraud? Andrea says even now, it’s hard to know.

S3: Laying out a criminal tax count is complicated. And I think that’s one of the reasons why, you know, to a lot of people, getting the Trump tax documents has been the white whale or the Holy Grail or name your metaphor, but you don’t actually understand what’s in them until you do a full investigation that can really fill that out. So it’s sort of like getting the tax documents, which The New York Times has, but we don’t have sort of the first step. And then the question is what happens next? So the fact that The New York Times has been working really for four or five years to get these documents is the problem. You know, they should get another Pulitzer Prize for getting them. They really should. But it shouldn’t mask that. What should be happening is we all should have the tax documents and we would if the system was working. And that’s what the problem is here.

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S4: Andrew Bronstein, thank you so much for joining me. It’s really just always great to talk to you, Mary. Andrea Bernstein co-hosts the Trump Inc podcast from WNYC and ProPublica. Her book is coming out in paperback next month. It’s great. Go check it out. It’s called American Oligarch’s. The Kushner’s The Trumps and the Marriage of Money and Power. And that’s the show before we go, we are collecting your stories and we could really use your help. We’re asking people to call in and tell us how you are planning to make your vote count in November. Are you planning to help your neighbors and people you love make their votes count? Are you working at the polls? Are you getting out there and canvassing? Just tell us leave us a message at two zero two eight eight eight two five eight eight. What next is produced by Elaina Schwartz, Daniel Hewitt, Mary Wilson and Jason de Leon. Alison Benedict and Alicia Montgomery oversee all of us. And I’m Mary Harris. I’ll catch you back here tomorrow.