Trump's Tiny Tax Bill
Plus: 2019 crime stats are out, London will let Uber operate again, and more...
It's been four years since Donald Trump promised to release his personal income tax returns. Now that The New York Times has gone and done it for him, it's easy to see why the president never followed through on that promise.
Trump ultimately paid just $750 per year in federal income taxes in 2016 and 2017, according to the Times report, and that was $750 more than he paid in other recent years. In fact, in 11 out of 18 years that the Times looked at, Trump effectively paid $0 in federal income tax.
Trump's tax burden was "less than those earning under $5K, and less then every income group earning more than $20K," New York University law professor Lily Batchelder points out.
It's also much less than he paid in taxes to other nations. "In 2017, the president's $750 contribution to the operations of the U.S. government was dwarfed by the $15,598 he or his companies paid in Panama, the $145,400 in India and the $156,824 in the Philippines," says the Times.
Just finished reading the big Trump Taxes NYT piece but I came away from it feeling like the federal tax code is the real villain here
— Eric Boehm (@EricBoehm87) September 28, 2020
How did he pay so little here? "Trump initially paid almost $95 million in federal income taxes over the 18 years," the Times reports. But he
later managed to recoup most of that money, with interest, by applying for and receiving a $72.9 million tax refund, starting in 2010.
The refund reduced his total federal income tax bill between 2000 and 2017 to an annual average of $1.4 million. By comparison, the average American in the top .001 percent of earners paid about $25 million in federal income taxes each year over the same span.
The refund also earned him an IRS audit, starting in 2011, that has not been resolved.
"A lot of tax scams out there but it's genuinely rare—and suspicious—for a rich person to have such a low tax bill," claimed Matthew Yglesias of Vox.
"It's not immediately obvious that this is odd for an active real estate investor," the Tax Foundation's Karl Smith responded. "Especially doing renovations. This activity can be an enormous cash suck with very long payout horizons. [It's] totally conceivable that a successful active investor could be cash neg their whole life."
Trump's ability to so successfully minimize his tax burden is impressive. Much less impressive is what these tax returns suggest about Trump's business prowess.
"Many of Trump's top businesses are losing money, even as those losses have helped him shrink his federal tax bill to essentially nothing," notes AP. "The president has frequently pointed to his far-flung hotels, golf courses and resorts as evidence of his success as a developer and businessman. Yet these properties have been been draining money."
Trump told Americans in 2018 that he his annual earnings were $434 million. But he told the IRS that he had lost $47.4 million that year.
His golf courses have allegedly lost $315 million since 2000. The Trump International Hotel in D.C. has lost $55 million.
"It is important to remember that the returns are not an unvarnished look at Mr. Trump's business activity," writes the Times' . "They are instead his own portrayal of his companies, compiled for the I.R.S. But they do offer the most detailed picture yet available."
You can read the full Times report here.
It's a good morning to remind you that you are more likely to be audited if you are poor than if you are rich:@paulkiel's story:https://t.co/kaLSGTzDUA
— Jesse Eisinger (@eisingerj) September 28, 2020
QUICK HITS
• Crime statistics for 2019 are out. John Pfaff explores what they show and what that means; start here:
https://twitter.com/johnfpfaff/status/1310418269346693121?s=12
• Good news for folks in England: London will finally let Uber operate within its city limits again.
• California will start requiring prisons to house transgender inmates in the prison that matches their gender identity.
• Police officers in riot gear arrested peaceful protesters in New York City last night for having "gathered on the sidewalk and a pedestrian island on Hudson Street" after police told them not to. Meanwhile, in Maryland, more than 100 people were arrested for attending an unauthorized car rally.
