On Sept. 27, 2020, The New York Times published an extensive report by Russ Buettner, Susanne Craig and Mike McIntire. The collection is titled, “The President’s Taxes: Long-Concealed Records Show Trump’s Chronic Losses and Years of Tax Avoidance.”
The article is presented in eight parts, the first of which is the introduction. In this section, the authors clarify that The Times “obtained Donald Trump’s tax information extending over more than two decades, revealing struggling properties, vast write-offs, an audit battle and hundreds of millions in debt coming due.”
The Times also reports that, in the year he won the presidency and the year following, President Trump paid $750 respectively in federal income taxes. He paid no income taxes in 10 of the 15 years prior to his election, as he reported losing more money than he gained.
“Ultimately,” the authors note, “Mr. Trump has been more successful playing a business mogul than being one in real life.”
His tax returns show that “The Apprentice” made Trump approximately $427.4 million, much of which he invested into a collection of businesses that have been “devouring cash.”
President Trump has often questioned why people demand to see his taxes, as the president is required to submit a financial disclosure. However, his disclosure only shows his reported revenue, not his profits. According to his financial disclosure, he had made at least $434.9 million. Meanwhile, his tax returns report a $47.4 million loss.
According to his returns, most of Trump’s core enterprises report multi-million dollar losses yearly. And, within the next four years, over $300 million worth of loans for which he is personally responsible are coming due.
In his first two years in the White House, President Trump’s revenue from abroad totaled $73 million. In 2017, the president paid $750 in income taxes to the United States while he or his companies paid $156,824 in the Philippines, $145,400 in India and $15,598 in taxes to Panama.
The second section, entitled “A Map of the Empire,” reports that The Trump Organization is a collection of more than 500 entities of which most are owned wholly by President Trump.
Section three, “Loser, Winner,” delves deeper into President Trump’s history of “using the proceeds of his celebrity to purchase and prop up risky businesses, then wielding their losses to avoid taxes.”
The Times obtained and investigated his 1995 tax return in the past, reporting a nearly $1 billion loss from Trump’s early-1990s financial collapse. This loss generated for him a tax deduction that could be used for up to 18 years going forward. The newer tax returns show that Trump used up this tax reduction in 2005, when a new flow of entertainment revenue began coming his way following the debut of “The Apprentice.”
From 2005 to 2007, Trump made a profit of $120 million, on which he paid a total of $70.1 million in income taxes. With this new wealth he began expanding his properties, which began to put him back in the hole financially. Trump has attributed some of this loss to depreciation. However, The Times has found that he has lost large amounts of his fortune even before depreciation is factored in.
Trump paid alternative minimum tax, a tax used as a tripwire for wealthy people who try to use huge deductions, for seven years between 2000 and 2017, totaling $24.3 million. For 2015, he paid $641,931; this was his first payment of federal income tax since 2010. In order to avoid some tax bills, Trump used $9.7 million in business investment credits, some of which he gained from his renovation of the Old Post Office hotel.
In the fourth section, “The $72.9 Million Maneuver,” The Times finds that, from 2010 on, Trump has received an income tax refund of $72.9 million. This is equal to all the federal income tax he paid from 2005 to 2008 plus interest. The legitimacy of this refund has been the subject of a long audit battle with the I.R.S.
After President Obama signed in a bill as part of the Great Recession recovery act, Trump recieved a refund of not only the $13.3 million he paid in 2007, but also the $56.9 million he paid in 2005 and 2006. He also received $21.2 million in state and local refunds.
The fifth section, “The 20 Percent Solution,” discusses the discovery of some $26 million in unexplained “consulting fees” as a business expense across almost all of his projects from 2010 to 2018. His daughter, Ivanka Trump, reported in her financial disclosure that she received payments from a consulting company she co-owned. These payments were roughly the same amount as the consulting fees claimed as tax deductions by the Trump Organization for hotel projects in Vancouver and Hawaii.
Section six, “The Art of the Write-Off,” discusses Trump’s write-offs, some of which include fuel and meals associated with his aircraft, linens and silver for the Mar-a-Lago (his permanent residence in Florida) and $70,000 in hairstyling fees during “The Apprentice.”
In 2014, Trump classified his Seven Springs estate as an investment property, allowing him to write off $2.2 million in property taxes as a business expense. Two of Trump’s deductions, including that for Seven Springs, are the focus of an investigation by the New York attorney general.
Trump’s returns also show that he wrote off as a business expense fees paid to a criminal defense lawyer, Alan S. Futerfas, whom he hired to represent him in the Russia inquiry. Futerfas also defended the president’s embattled charitable foundation. This foundation was shut down in 2018 after New York regulators said it had “engaged in a shocking pattern of illegality.”
Section seven, “A President and a Business Man,” makes observations on the conflicts of interest that arise for business moguls such as Trump when in a role of political power. As an example, The Times cites the president’s conflicts as being most evident with Turkey. The Turkish government “has not hesitated to leverage various Trump enterprises to their advantage.” They report that, when Turkish-American relations were stressed, a Turkish business group canceled a conference at his Washington hotel. To show support once the countries were on better terms, they rescheduled the event, and it was attended by Turkish government officials.
The final section of the article, “The Gathering Storm,” reports in summation that “his tax records make clear that he is facing a battery of threats to his business and his own financial well-being.” They also show that he has a $100 million loan coming due in 2022.
The Times reports that Trump is personally responsible for loans and debts amounting $421 million, most of which are coming due in the next four years.
“Should he win re-election,” the authors conclude, “his lenders could be placed in the unprecedented position of weighing whether to foreclose on a sitting president.”