I may have opposed the release of Donald Trump's tax returns, but that doesn't mean I'm so prissy that I won't write about it now that the deed has been done. Here is tonight's New York Times piece about Trump's taxes:
The data, which includes details of Mr. Trump’s federal tax returns from 2015 through his full term in the White House, shows that he began his presidency suffering the sort of large business losses that had defined much of his career and paid almost nothing in income tax.
But his fortunes changed in 2018, as he reported $24.3 million in adjusted gross income....His sudden burst of income occurred largely because he had sold properties or investments at a gain of $22 million.
....By 2020, however, Mr. Trump had returned to reporting losses. In fact, despite the capital gains that boosted his bottom line in 2018, the entirety of his core businesses — mostly real estate, golf courses and hotels — continued to report losses every year, totaling $60 million during his presidency.
There's not really anything here that we didn't already know, but I appreciate the bluntness of the Times report. The "entirety of his core business" reported losses every year, just as it always has. The truth is that Trump has never really made money from anything except The Apprentice and his licensing business.
Then, at the very end, the Times reporters throw in a hilarious little FU about the interest income Trump receives:
Nearly all of his interest income came from his share of profits earned by a partnership that is controlled by Vornado Realty Trust.
The partnership owns two valuable office towers: 1290 Sixth Avenue in Manhattan; and 555 California Street in San Francisco. Mr. Trump, who has a 30 percent share in the partnership, has no authority over its management, and it has consistently been his strongest-performing asset.
Twist that knife.
We now wait to see whose tax returns the next Congress's House Ways and Means Committee makes public. I expect the Pelosis, Adam Schiff and 'the squad' will be on the list.
None of those people have run for president. Every other presidential candidate released his (IIRC), what did Trump have to hide?
That's irrelevant. It's not a requirement to release your tax return to run for president. If a candidate chooses to buck that recent norm and not release his taxes, that's something voters need to take into consideration when casting their vote. It shouldn't mean the government releases it to the public for them against their will.
But remember Trump always implied that he would have released his taxes except for his lawyers indicating he shouldn't because they were being audited. A usual, we no know he was lying. You are correct that, unfortunately, Trump's lying about well, pretty much everything, did not prevent a lot of people from voting for him.
As for releasing his taxes now, it's not illegal for Congress to choose to do that. That they chose to do that in connection with the man who incited an insurrection that endangered the lives of those same members of Congress will not keep me up at night.
by the same logic, if a potential candidate does not want his tax release info to be public information, he should take this recent move into consideration before deciding to run for office.
more information on presidential candidates is a good thing, not a bad thing.
if you deeply value the secrecy of your tax records, you can always choose not to run for president. simple.
this isn't that complicated.
I agree. If this becomes the norm elected officials will need to take into consideration congress will go behind their backs and release their tax records against their will
No one went behind anyone's back. And contrary to the professional liars on the right, the law was specifically passed to address corruption in the executive branch, and has never had any relationship to policy.
it's a 50-year norm followed by every major party candidate. you're right that the electorate can take the failure of a candidate to release his/her taxes into consideration at the ballot box, but that doesn't take into consideration of the singular nature of the presidency. if the r's want to use this widely as a means of extracting revenge or political advantage, they should be reminded that there is zero guarantee that they will hold the house or gain the senate come 2024.
You say that as if more government transparency would be a bad thing.
Members of Congress actually have some pretty robust ethics and conflict of interest rules they have to abide by, including financial disclosures, and the House Ethics Committee oversees this. The Executive does not. The Ways and Means Committee was exercising is legitimate oversight authority to ask whether or not the POTUS was abusing his power to enrich/benefit his family business, which he did *not* divest himself of when elected. For House Republicans to be rifling through their political rivals' tax returns just for petty revenge would be a gross abuse of power. So of course I expect them to try.
Why is this a problem for any of the approx 330m Americans who are not in elected office? Knowing more about where our elected officials get their income from? Avert your eyes, you can't handle the truth!!!
This from the guy who yesterday said that Congress releasing Trump's taxes was just as bad as anything Trump had done while in office. Ergo, Jan 6 = us seeing Trump's taxes. I wouldn't place a great deal of trust in his judgement abilities.
Foolish precedent to demonstrate what everyone who was willing to know, knew, that Trump is a terrible business operator (but has an animal genuis for marketing).
Why is the release of tax records a problem for anybody not committing tax evasion and/or financial crimes, which hopefully describes most American taxpayers?
You're right. I think the government should release the tax returns of all teachers as well. They are around our kids all day so the public needs to know if they are compromised in any way. The government should probably also release their medical records to make sure the students are not at risk of any transmissible diseases.
In Scandinavian countries like Norway, all tax returns are public records. You can literally look up on a government website what your neighbor or anyone else you know earns and pays in taxes.
Interesting but not really relevant.
Correction: not relevant to you.
I think the government should release the tax returns of all teachers as well.
It's nice to hold outlier opinions.
public school teachers' salaries are typically a matter of public record. Granted, that's not their entire income.
Wages from one job are just a part of the tax record. You know that. (I hope.)
i'm sure going through a stack of 1040EZs would make for exhilarating reading.
Teachers don't award contracts. They don't pass laws. They don't treat with foreign powers. They don't take a solemn oath of office that places civic interests above their own. They don't have financial conflicts of interest that would compromise their ability to teach children. They aren't chosen by the electorate.
The point of financial disclosure to let the voting public know about the finances of the people that their vote grants public financial power to. Just about every elected official has some financial conflict of interest. If they own a car, they may be influenced by concerns about the price of gasoline or traffic laws and fines. Car owners are likely to vote for someone like that. If they own a real estate development company, their interests and the interests of voters are more likely to misalign.
👍👍👍👍👍
I think there's a rule for us little people, that if your business never makes any money then it's a hobby and not a business. So then you can't deduct the losses. But that's us little people.
It's not about profit level, but revenue level.
Pretty sure it's about profit. It's still a hobby if you have revenue but zero chance of turning a profit. Otherwise gamblers would all be able to write off gambling debts.
— But his fortunes changed in 2018, as he reported $24.3 million in adjusted gross income and paid nearly $1 million in federal tax.
That’s from the NYT article. I’m pretty curious how he paid a less than 5% tax rate on income of more than $24 million.
To my mind, that’s not “never making any money” as in the headline here. That’s some rules somewhere letting the super rich pay very little in taxes.
That’s some rules somewhere letting the super rich pay very little in taxes.
The US tax code in a nutshell.
Without spending a lot of time researching it, it sounds like the real story is not "Trump didn't pay taxes because he never made any money" but rather "Trump figured out how to make his 'lifestyle' a business expense". Take for example, Mar a Lago. Trump sells tickets to his home! And you can bet that Mar a Lago is treated as a business for tax purposes, and the cost of the restaurant and his living quarters and everything else are part of the expenses of the business -- justified, I would guess, by the argument that what Mar a Lago sells is proximity to an ex-President. In other words, Mar a Lago probably loses millions, but on his taxes, Trump subtracts those millions from the millions he earns from selling his name to be used on hotels and golf courses and social media chat apps... Thus his "income" is close to zero -- even though the Mar a Lago kitchen presumably gives him all the hamburgers he wants -- and his taxes are close to zero because they are a percentage of the income. So it's not that he doesn't make any money; rather, it's that he's figured out a way to make regular old living a giant deduction from income.
Reminds me of the great John Oliver line "If you want to do something evil, put it inside something boring."
He signed an agreement that Mar-a-Lago would not be used as a residence (I don't remember the maximum number of days per year stipulated for trump & family to occupy the residential area).
When he moved from NYC to Florida, there was apparently some consideration of trying to enforce that provision, but it obviously - as in so many situations in his life - was not acted upon. Locals are either friendly to him or cowed by the mere thought of trying to. enforce that clause for fear of bad publicity & a lawsuit
Since one address is being used for both a residence & business, there would seem to be an issue there.
Right, I remember reading about that. Trump benefits from the fact that as regards "rules", a rule is only as strict as the willingness to pay lawyers to argue over it. And Trump is usually willing to pay more than his adversaries to fight it out in court. Shamelessness is a key part of his thing. He can't be cowed merely because a rule is on the books.
To put it in simplest terms, Trump seems to have figured out that when your job is "appearing to be a rich guy", then everything is a business expense. Can't say that isn't clever.
So why did it take this long to get an answer from the IRS about whether the returns were properly audited? It seems like that information should have been available separate from the full returns.
American voters need to have it drummed in by continuing news reports that ... WHO KNEW?!? "The Apprentice" was just a teevie sitcom! No basis in reality whatsoever!
The lede here isn't so much that Trump has these wild swings in tax liability depending on what investments he cashed in on or whatever, it's that the IRS was apparently just letting this slide w/o any kind of audit, even when they were technically *supposed* to be auditing a sitting president's returns.
We all know Trump routinely demanded that the IRS be weaponized to punish his enemies like James Comey. Was it also weaponized to shield his own finances from scrutiny? Sounds like an *excellent* opportunity for a House investigation! Those guys are always looking for an excuse to go after the IRS. Here's their chance!
"I may have opposed the release of Donald Trump's tax returns, but that doesn't mean I'm so prissy that I won't write about it now that the deed has been done."
Jesus, Kevin. Have some integrity. You were all moralistic on how improper it would be to release the tax returns, how Democrats should take the higher road, etc. But you also want to participate in the glee of rifling through those tax returns too, now that somebody else got their hands dirty (as you disdained yesterday) releasing them.
If you really think abortion is murder, you shouldn't be paying your girlfriends to have them. And if you really think releasing tax returns to the public is wrong, you shouldn't be writing about them as soon as they are released. If something really is wrong, you shouldn't want to have anything to do with it... ergo, I can only conclude you were insincere about believing it was wrong in the first place.
Sheesh. Not everyone is an absolutitst.
+1
Wait.
Am I the only one who comes here because of Kevin's puckish appreciation of irony?
"Donald Trump paid no taxes because he never made any money"
Maybe. But that presumes these tax filings are accurate and complete. I doubt that. I certainly think his (semi)legitimate businesses could be money losing failures, but I think it's pretty likely he's doing lots of illegal crap that generates money and never gets reported to the IRS.
There are all sorts of loopholes, write-downs, depreciations, and other things businesses use to reduce their tax liability. The scandal is that in many cases, an enormously profitable enterprise paying zero taxes is perfectly legal. Owing taxes is for little people. Why do you think rich people tend to vote Republican? They get their money's worth when Republicans write the tax code.
That said, what a close audit might reveal is a lot of the same skullduggery that just got the Trump Org convicted for fraud in NY: claiming all sorts of losses and write-downs to shrink your taxable income that don't hold up to scrutiny on closer inspection.
Are you implying the tax code was written entirely by republicans? And that democrats have not had any opportunity to modify it?
Are you implying that there was ever a time frame when good government Democrats not in the thrall of Wall Street had a majority in Congress? Yeah that hasn't happened ever. So we have the god awful tax code we have.
Glad we're on the same page that any perceived deficiencies in the tax code are the equal fault of both republicans and democrats.
That's not what he said. But you're too stupid to get that.
Thank your lucky stars I didn't go with the alternative:
That's not what he said. But your too mendacious an asshole to concede his point.
Ultimately the courts rule on tax code and the courts have been under republican control since the nixon administration finished replacing FDR's appointees. And Trump's 100s of millions in 'taxable losses' includes the money he failed to pay back to the banks, i.e both he and the banks got to count the exact same loss due to shenanigans by the supreme court. (The IRS rationally didn't allow entities to count loses that they passed on to their creditors and thus didn't actually suffer. The supreme court for no good reason whatsoever overturned that rule just in time for trump to claim it on his Atlantic city fiasco. Congress immediately re-imposed the rational rule that one can't claim losses one doesn't actually suffer immediately after atlantic city bankruptcies but too late to cover Trump's fake losses. Thus trump was able to claim 100s of millions of other people's losses.
Yeah. My reaction is literally, "Bruh, how you gonna just ignore his rampant and recurrent tax fraud?" He claimed to have made no money on his tax returns so that he wouldn't have to pay any taxes. That doesn't mean he actually made no money.
Not trying to argue that he's a good businessman - just that he's a fraud.
"How do you amass a small fortune? Start with a large one."
Sounds like Trump really needed foreign governments to buy out blocks of rooms at this hotels.
Trump inherited/was gifted a shit ton of money. His father was far richer than he is. Remember, his father was giving him millions in the 60s.
I read somewhere a few years ago that if Trump had just stuck his inheritance in an index fund or something he'd be far wealthier today than he ever was going repeatedly bankrupt in the NY real estate market.
Kevin's headline is almost assuredly misleading and false.
We don't have the information to say that Trump 'never made any money', although this will certainly be Trump's (or his accountant's) position.
What we do know apparently is that Trump did not report taxable income in most years. That might be because he didn't make any money, but it is more likely due to other reasons.
I agree. Although I think Kevin was being careless and superficial here, not intentionally misleading. The key is carefully doing what the Manhattan DA gave up doing: compare the properties for which he claimed "tax losses" with the financials for those same properties in his bank loan applications/statement. They'll be quite different, and at least one will necessarily be a lie.
There are two weird things going on with Trump. On one hand, he sure doesn't *seem* to be living a lifestyle of someone whose businesses continually lose money. Remember -- the Trump Org is a pass-through entity. It's income is essentially Trump's (and his family's) personal income. (Which, after claiming that his would tax the wealthy more, signed a tax cut in 2017 that gave pass throughs *like his own company* a 50% cut. Fortunately blatant corruption like that is a feature, not a bug, with Republicans these days...). So he lives the high life while claiming, for tax purposes, that he's broke. Roger that. But as I said above, it's possible for that to be perfectly legal because our tax code was written by, and for, millionaires (and billionaires).
OTOH, Trump and his spawn are also continually grifting their rube supporters with the stupidest shit, the latest example being those abominably lame NFT "trading cards", which might well be confiscated or ordered destroyed by courts in the near future because most of them are Trump's face photoshopped onto a copyrighted image off the internet. What kind of rich person needs to constantly be hawking crap like this? Unless you're having serious cash flow problems, your creditors are getting antsy, and you need to keep up appearances. The fact that he hasn't held a single rally since declaring his candidacy for president is also a fairly blatant sign that he simply doesn't have the cash on hand to do it and can't find any suckers to do events for him anymore who don't demand full payment up front.
So is Trump a tax cheat or merely a broke idiot reduced to selling illegally photoshopped pictures of himself as a muscle-bound superhero? Porque no los dos?
As I understand it, the NFTs were a separate company that licensed Trump’s name and likeness along with his endorsement. Kind of like Trump steaks, water, etc. So I don’t know how culpable he is in any wrong-doing that company did. He just got a fee. Trump is a slippery little devil.
A separate corporate identity using the same address as his golf shop, from what I read. I would think that their being colocated is a bit unusual.
"On one hand, he sure doesn't *seem* to be living a lifestyle of someone whose businesses continually lose money." He made hundreds of millions from the apprentice. He inherited/gifted from his father further hundreds of millions, starting with millions in 1960s. And Kevin is wrong that he never made money from his businesses. He made out like a bandit by heavily investing in manhatten office space in the 70s at the very bottom of a very bad bear market. He just hasn't made any money from businesses in the last 45 years.
Trump doesn’t pay taxes. Only little people pay taxes.
My father owns a rental house. His total income, between the house and SS was $65K. His tax bill was $0. I tripped out because I got hit with a $13K bill because of some serious tax BSery on a mutual fund. Both of our taxes were done by the same guy and both were correct. Depreciation on the property erased his rental income.
I’m sure Trump does questionable stuff, and he’s so cheap he almost certainly cheats, but for a rare time, he might be correct that tax returns don’t necessarily mean a lot without really digging through them.
I’ll wait a few more days.
What I really hate is that there can be a lot of churn in a mutual fund when the market goes down. Your now stuck with paying taxes on the capital gains even though the fund itself is worth less (not worthless)--depending on the structure of the investment. Ok, an old guy issue.
As for depreciation on property, that affects how you calculate capital gains when/if you sell that property. And in CA, there might be something funky with the property tax too.
Not a tax attorney, and I don't even play one on TV.
Exactly that, except I got caught on the upside. They churned the entire fund, I wound up with earnings I never saw and got taxed on. This happened at the literal peak of the market so since then, those profits have been erased.
I've adjusted my mix, I should be OK, but I'm seeing gains come in, dividends, etc. I guess we'll see what happens when I get my statements. As someone who only did 401K's until this, it was a shock. I pissed my accountant off with about 10 emails trying to figure out.
I guess the good thing is that I'm in a position for this to even happen.
"Depreciation on the property erased his rental income." When has a house ever actually depreciated, i.e. it was worth less at the end of the year than the beginning.
When has a house ever actually depreciated, i.e. it was worth less at the end of the year than the beginning.
Almost every year. Do you own a house? Unless you did major renovations it's probably worth less than it was last year. Just like a car or a piece of machinery or any other physical asset that can be used to make money.
The property as a whole, on the other hand (including land) is likely worth more.
The larger question, of course, is whether or not he actually lost millions of dollars or whether that's how it's made to look on paper. He's living a pretty good lifestyle for someone who loses millions of dollars every year.
The business-side of it definitely feels like he's structured his businesses to take losses on paper, so he doesn't have to pay corporate income tax. But if he's drawing off money in fees and benefits from his companies to get there, then that should show up as personal income for him that needs to be taxed. It sounds like that was often not the case, so he may have been doing tax evasion.
In fact, he did lose massive amount of money in Atlantic city. However, he passed those losses unto his creditors. Because of the crookedness of our supreme court, there was a two year window where people could claim the losses they forced unto their creditors as their own losses for tax purposes. And Trump's massive bankruptcies fell in that two year window.
Here is a couple of interesting questions that wouldn’t be raised unless Trump’s tax returns were released. If I’m understanding this correctly, basically everything in the “Trump Empire” was pretty much under water. And, presumably, they’d have gone for fire sale prices under normal circumstances.
Yet, Trump seems to have made a profit of more than $22 million. My questions are: (1) what did he sell and (2) to whom did he sell it?
I believe one of Trump's sons already told us where they've been getting money....
Yes, that's true. And it definitely deserves investigation both here and in the UK. But it's also presumably separate and distinct from the sale of assets on which Trump made the $22-odd millions.
2018 was when Trump not only was president but was very much on top politically; it looked like he could really deliver for people and so what I'm curious about is whether anyone for whom Trump might have been able to deliver bought one or more of his properties and, most particularly, whether he overpaid for them (essentially giving Trump a very thinly disguised bribe).
The answer is yes. We know several arab countries were renting out whole floors of Trump hotel at rack rate. No one in this world pays rack rates for hotel rooms (with the exception of super bowl week in hotels besides the stadium and similar type situations).
If you haven’t read this, you should:
https://www.forbes.com/sites/danalexander/2022/07/29/donald-trumps-great-escape-how-the-former-president-solved-his-debt-crisis/?sh=559098aa3970
For a long time I thought/was assured that Trump was cooked financially after his defeat. That suddenly evaporated. I wondered why and found that article. Really, it just made me believe that Trump is just too slippery to be brought down by just about anything.
Clearly Drumpf and his crack legal team took the core of his tax planning strategy straight from John Fogerty and his classic CCR song Fortunate Son (a double sided--with Down on the Corner--Top Ten hit in 1969 that has never lost its relevance):
"Some folks are born silver spoon in hand
Lord, don't they help themselves, oh
But when the taxman come to the door
Lord, the house lookin' like a rummage sale, yeah"
It's hard to say, since the NYT points out that he seems to have been deliberately structuring his businesses to take losses for tax purposes. It's Hollywood-style accounting.
That said, if he was drawing fees and other income off those properties, he should have been reporting that for taxation - and it appears he often wasn't. I wouldn't be surprised if he was using company money to pay for his lifestyle expenditures as well.
I wouldn't be surprised if he was using company money to pay for his lifestyle expenditures as well.
I was wondering about that, too, and maybe there is some of this going on by Trump. But for tax purposes I'm not sure it really matters.
Let's imagine Trump draws total salary and payments (from all sources) of, say, $20 million. And then imagine if he were scrupulously honest and reported an additional, say, $8 million in payments-in-kind from his businesses (private jet trips, security details, meals, lodging, whatever). That totals $28 million. But I'm pretty sure he can still legally show zero income if pass through entities he owns show losses of $28 million.
I am a tax lawyer, so this is no surprise.
If you can swing it:
1. Somehow buy Property A for $X,which gives of $5Y dollars per year, net of expenses. ("Somehow" equals borrow money to do it).
2. As long as the value of X divided by 27 (known as "straight line depreciation") exceeds your $5Y dollars, you pay no tax. If a $1m property threw off net incoe of $37K or less, no taxes due.
3. Sooner or later you sell Property A, you might have a capital gain at that point, but note that capital gains rates are less than income tax rates. By a lot. And anyway, its not like you worked for the capital gain, its just due to appreciation.
4. Trump of course, comes up with some slimy deductions to minimize even the capital gain, like donating part of a golf course for conservation.
Its what every real estate developer basically does. It works, it always works, unless properties decline in value and you have problems covering the debt. If that happens, the implosion is quick and dirty.
I've always suspected we'd find something like this in his returns so I never understood why he was so hung up on not releasing them? I'm guessing there's a lot there in the margins that he doesn't want exposed that we haven't seen.
So far though, it's not a big deal, at least to me.
Its the slimy deductions. Many people are simply content with the massive advantage passive income has over wage income, not Trump, obviously.
More broadly, even though he probably has really good cash flow, the rubes which make up his base could now think he's actually not that rich, since his wealth is not via a huge salary - compare the salaries of some executives of large companies that Trump styles himself as "wealthier than" - he is nowhere near the league of Buffett, Bezos and Musk, even with Tesla stock way down.
Why does no one go to jail for getting depreciation on a appreciating property. That's the scam.
Of course the asset Trump had no control over made money. Someone else did the reporting and Trump could not cheat (just like all of us wage earners or Social Security recipients). How much he really made would only be knowable through a thorough audit--which the IRS purposely avoided doing.
"The truth is that Trump has never really made money from anything except The Apprentice and his licensing business." That's not true. Trump did in fact make a fortune in the 70s by buying into manhatten office real estate at the very bottom of the market. Of course, that's more of an example of how even monkeys throwing darts approach to investing will occasional deliver homeruns.
This underlines a point I've been making for years. Donald Trump would be far wealthier today had he not tried to be a shitty businessman and instead put his entire inheritance in stock index funds and spent his life being Jay Gatsby.