Donald Trump Tax Records Show Candidate May Have Not Paid Any Taxes for Nearly Two Decades
Sunday, October 02, 2016
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| Donald Trump must hide his face after his Tax return pubblished by the Times |
Thirteen percent. That’s the lowest tax rate paid by any major presidential candidate of the last 25 years–as far as we know.
But Donald Trump’s federal tax payments may be nothing, according to a new report by the New York Times. The paper obtained a few pages of Trump’s 1995 tax return, showing that he paid no federal taxes that year and in fact claimed a $916 million loss, which would be a gigantic sum for an individual filer. Tax experts consulted by the Times said such a loss would allow Trump to offset taxes on personal income for as long as 18 years.
Trump suffered four business bankruptcies in 1991 and 1992, which would have generated most or all of the losses he declared in 1995. Since his businesses were all private at the time, their tax returns aren’t public. And Trump has refused to release his personal tax returns, the first major presidential candidate to do so since at least the 1970s.
Trump’s Democratic rival, Hillary Clinton, and many other critics have speculated that Trump has paid no federal income taxes for years, which might explain why he has released medical records during his presidential campaign, but no tax records. Trump’s campaign released a statement in response to the Times report, saying, “Mr. Trump has paid hundreds of millions of dollars in property taxes, sales and excise taxes, real estate taxes, city taxes, state taxes, employee taxes and federal taxes.” But all companies pay federal taxes in the form of employer payroll deductions for Social Security and Medicare. Those aren’t the same as income taxes, and it’s possible to pay no incomes taxes while paying federal payroll taxes.
Trump may have had later opportunities to reduce his federal tax burden further into the future. The 2008 financial meltdown and the corresponding crash in property values could have generated further losses that Trump, a major property owner in several American and foreign cities, used to offset income taxes beyond 2013. As a real-estate developer, Trump has access to some of the most generous tax breaks on the books—breaks that were among the few to survive comprehensive tax reform passed under Ronald Reagan in 1986, revealing the unusual power of the developer lobby. There’s no reason to think Trump’s tax breaks are illegal. If there’s any question, it involves the fairness of the U.S. tax code, which allows certain business entities to benefit, tax-wise, from wipeouts that harm contractors who get stiffed in bankruptcy proceedings, and many others.
Trump has given several reasons for refusing to release his tax returns: the IRS is auditing them, they’re too complicated for ordinary people to understand, they won’t show anything not already revealed in a detailed financial disclosure form he filed with the government, as required. None of those really passes the sniff test: There’s nothing about being audited that prevents disclosure; some voters surely are smart enough to understand Trump’s returns; and Trump’s financial disclosure forms don’t reveal two basic things: his income or the amount he pays in taxes.
For what it’s worth, Bill and Hillary Clinton claimed $316,070 in income in 1995, when Bill Clinton was president. They paid $75,437 in taxes, for a tax rate of about 24%. Hillary Clinton’s income from speeches given to Wall Street banks and other clients since 2013 is controversial, for good reason, but the Clintons have released tax returns going back to the 1908s, so at least voters know where their money comes from. In 2015, the Clintons paid $3.6 million in federal taxes on income of $10.6 million, a tax rate of about 34%.
The taxes of presidential candidates are frequently controversial, so we assembled the following data on federal taxes paid by major presidential candidates since 1992. In most cases, the tax figures are for the year prior to the election:
John Kerry, the Democratic candidate in 2004, enjoyed the lowest tax rate among candidates, at 13.3%–largely because most of the family income came from investment returns earned by his multimillionaire wife, Teresa Heinz Kerry. Investment income is typically taxed at the capital gains rate of 15%, which is lower than the rate many people pay on labor income. Mitt Romney paid a 14.1% tax rate in 2011, with most of his income coming from investments, as well.
[Related: The Clintons pay a ton in taxes. Here’s why.]
Hillary Clinton and her husband Bill pay a relatively high tax rate, mainly because they earn little investment income and their labor income places them in the top tax bracket. Their 2015 return, for instance, shows no capital gains and a $700,000 capital loss carried over from prior years.
Charitable contributions—or rather, a paucity of them—can also get candidates into trouble, presumably because the public expects politicians to be generous donors. Al Gore was derided as Vice President Scrooge after his 1997 return showed he gave just $353 to charity that year—0.2% of his $197,729 in income. Gore gave considerably more in following years. George H. W. Bush was the most generous recent president, largely because he and his wife Barbara donated the considerable proceeds of “Millie’s Book” (which was about their dog) to a literacy nonprofit.
Some Trump critics suspect the candidate is a miser who gives little to charity, another possible reason he hasn’t released his tax returns. Republican Bob Dole set the lower bound for charitable giving when he ran in 1996, with just 2% of his income going to charity. The worst scenario for Trump, were the public to learn of his finances, would be a lower income than he boasts, tax breaks that push his tax bill toward nothing and charitable donations that are smaller than Dole’s. Of course, there’s a good chance we’ll never know.
Politics
Donald Trump Tax Records Show Candidate May Have Not Paid Any Taxes for Nearly Two Decades
A huge income tax loss, nearly $1 billion, in 1995 may have allowed Donald Trump not to pay taxes for nearly 20 years.
Documents obtained by the New York Times, show that Trump claimed a tax loss of over $916 million in 1995. The Times said that large a loss, even in a single year, was likely enough to wipe out any income taxes Trump would have normally had to pay for as many as 18 years. Trump, like many very wealthy U.S. citizens, funnels his income and business dealings through a variety of corporate structures. Those arrangements allow Trump to carry losses forward for many years. The Times said Trump may have benefited from the huge 1995 loss as late as 2010, long after he had righted his finances after near bankruptcy in the early 1990s.
Trump’s former accountant told the Times that the nine figure loss was so big it didn’t fit on the tax form. The documents obtained by the Times also show that Trump, who claims he is worth more than $10 billion, made just $6,108 in “wages, salaries and tips” in 1995.
The Times said that while it was likely Trump didn’t pay any taxes for nearly two decades, it could not be known for sure. The newspaper only obtained a portion of a single year of Trump’s tax returns--1995. The Times said the documents were mailed to a reporter at the newspaper in an envelope with a return address from the Trump Tower in New York City.
In a statement that was also published by the Times, Trump’s campaign said that the Republican presidential candidate has paid hundreds of millions of dollars in taxes over the years, and that the documents the Times published had been obtained illegally. “Mr. Trump is a highly skilled businessman who has a fiduciary responsibility to his business, his family, and his employees to pay no more tax than legally required.”
Some on Twitter commented that while the tax documents showed no sign of wrong doing, they did raise questions about Trump’s business success.
oOo
Source: Yahoo News.
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