Donald Trump: Archer warns he shouldn’t be ‘underestimated’
Donald Trump’s taxes have long been a subject of debate, although they were only made public on Friday following a years-long battle to have them released.
The news comes just days before Republicans retake control of the House and weeks after Trump announced another campaign for the White House in 2024.
The returns show the extent of Donald Trump’s foreign assets and tax liabilities as well as his charitable contributions. It has prompted a stern response from the former president who has vowed revenge on the Democrats. Here are the key takeaways.
What do the documents show?
The documents include individual returns from Trump and his wife, Melania, along with Trump’s business entities from 2015-2020.
The records show how Trump limited his tax liability by offsetting his income against corporate losses as well as millions of dollars in business expenses, asset depreciation and other deductions.
While Trump paid $641,931 in federal income taxes in 2015, the year he began his campaign for president, he paid just $750 in 2016 and 2017, according to a report released last week by Congress’ nonpartisan Joint Committee on Taxation. He paid nearly $1 million in 2018, but only $133,445 in 2019 and nothing in 2020, the year he unsuccessfully sought re-election.
Jeff Hoopes, an accounting professor at the University of North Carolina’s Kenan-Flagler Business School, described Trump’s returns as “large and complicated” with “hundreds of entities scattered all over the globe”.
He noted that many of those entities are slightly unprofitable, which he described as “pretty magical as far as the tax code”.
“It’s hard to know if someone’s really bad at business or really good at tax planning, because they both look like the same thing,” he said.
Daniel Shaviro, a taxation professor at New York University, cited the large financial losses from so many of Trump’s businesses, despite their often healthy sales, as something that should raise suspicions from auditors. “There’s fishy looking stuff here.”
Shaviro also cited examples of suspicious or sloppy math even in smaller businesses, such as an aviation firm dubbed DT Endeavor I LLC, which in 2020 reported both sales and expenses of $160,144. Such exact matches are unusual, Shaviro said. Yet the form also reported an $18,923 loss.
Donald Trump’s tax returns are finally public after a years long battle. (Image: GETTY)
Were Trump’s businesses losing money?
The returns detail how Trump used tax law to minimize his liability, including carrying forward massive losses from previous years. Trump said during his 2016 campaign that paying little or no income tax in some years “makes me smart”.
In 2020, more than 150 of Trump’s business entities listed negative qualified business income, which the IRS defines as “the net amount of qualified items of income, gain, deduction and loss from any qualified trade or business”. In total for that tax year, combined with nearly $9 million in carryforward loss from previous years, Trump’s qualified losses amounted to more than $58 million.
Another of Trump’s money losers: the ice rink his company operated until last year in New York City’s Central Park. Trump reported a total of $2.6 million in losses from Wollman Rink over the six years made public.
The rink, an early Trump Organization jewel run through a contract with New York City’s government, reported a loss of $1.3 million in 2015 despite taking in $9.3 million in revenue, according to the tax returns. The rink turned a $298,000 profit in 2016, but was back to melting cash in each of the next four years.
“Trump seems to be creating huge losses that are questionable under current law,” said Steven Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center, who said he had spent 20 years preparing taxes for corporations and wealthy individuals and “never saw anyone lose money as regularly and as large as Trump lost money year after year”.
“To me, Trump’s business operations were phenomenally unsuccessful and I struggle to figure out how much of it is attributable to Trump’s unluckiness as a businessman and how much of it is attributable to Trump’s inflation,” he said.
Aspects of Trump’s finances had been shrouded in mystery since his days as an up-and-coming Manhattan real estate developer in the 1980s.
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Copies of some of the thousands of documents released. (Image: AP)
What are Trump’s foreign holdings and tax liabilities?
Trump, according to the filings, reported having bank accounts in China, Ireland and the United Kingdom in 2015 through 2017, even as he was commander in chief.
Starting in 2018, however, he only reported an account in the UK. The returns also show that Trump claimed foreign tax credits for taxes he paid on various business ventures around the world, including licensing arrangements for use of his name on development projects and his golf courses in Scotland and Ireland.
The documents appear to contradict Trump’s statement at a presidential debate in 2020 that he had closed his account in China in 2015.
He said: “The bank account was in 2013. It was closed in 2015, I believe. I was thinking about doing a deal in China. Like millions of other people, I was thinking about it. I decided not to do it.”
In several years, Trump appears to have paid more in foreign taxes than he did in net US federal income taxes, with income reported in countries including Azerbaijan, China, India, Indonesia, Panama, the Philippines, St Martin, Turkey and the United Arab Emirates.
The House Ways and Means Committee voted along party lines to release the documents. (Image: GETTY)
What were Trump’s charitable donations?
The documents also show that Trump’s charitable donations often represented only a sliver of his income. In 2020, the year the coronavirus ravaged the economy, Trump reported no charitable donations at all. In 2019 and 2018 he reported writing cheques for about $500,000 in donations. In earlier years the numbers were higher – $1.8 million in 2017 and $1.1 million in 2016.
It’s unclear whether the reported sums included Trump’s $400,000 annual presidential salary, which he had said, as a candidate, that he would forgo and which he claimed he donated to various federal departments.
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Trump has announced his 2024 Presidential campaign. (Image: GETTY)
How did Trump respond to the release?
In a statement Friday, Trump lashed out at Democrats and the Supreme Court for the release.
“It’s going to lead to horrible things for so many people,” he said. “The radical, left Democrats have weaponised everything, but remember, that is a dangerous two-way street!”
He said the returns demonstrated “how proudly successful I have been and how I have been able to use depreciation and various other tax deductions” to build his businesses.
The returns were released by the House Ways and Means Committee, which held a party-line vote last week to make the returns public after years of legal wrangling.
The IRS only began to audit Trump’s 2016 tax filings on April 3, 2019 – more than two years into his presidency – when the Ways and Means chairman, Representative Richard Neal, a Democrat from Massachusetts, asked the agency for information related to the returns.
Every president and major-party candidate since Richard Nixon has voluntarily made at least summaries of their tax information available to the public.
