ITEP: New York Times’ Trump Tax Revelation Confirms What We Already Know
news releaseAuthors
Following is a statement from Steve Wamhoff, federal policy director at the Institute on Taxation and Economic Policy, regarding a New York Times report that revealed President Trump paid $0 in federal income taxes in 10 of the last 15 years and just $750 in 2016 and 2017.
“The New York Times’ revelation of Trump’s years of dodging taxes confirms something we already know. There are two tax systems: one that most of us follow and another far more generous one for the very rich.
“In a detailed report, ITEP outlined how tax rules are particularly permissive for wealthy real estate investors like Trump, especially when it comes to when and how they can report losses to wipe out other income.
“Business owners have income from a venture only if it is profitable, so some rules are necessary to recognize when a venture fails to profit. But so-called ‘losses’ allowed by federal tax rules are not what most people think of when they hear the word ‘losses.’
“A business owner can report a loss when expenses exceed revenue, but the expenses that Trump reports are problematic to say the least. For example, some of his reported expenses appear to involve overcompensating family members through ‘consulting fees,’ which can have the added bonus of avoiding payroll taxes.
“ITEP has explained why many of the ‘business losses’ reported by the rich exist only on paper and why Congress recently made a mistake when it included a provision in the CARES Act that made it even easier for wealthy business owners to claim these losses.
“While it is common for the wealthy to use the tax code this way, Trump is in a league of his own. His losses seem to be, in many cases, more than just paper losses. Anything he is personally involved in tends to lose money. And it is possible that his various maneuvers do, in fact, exceed what is allowed by the law. The IRS may soon find that he owes more than $100 million, according to the Times.
“But the fact is that Trump has been able to get by for years with sketchy claims on his tax returns, including his endless business deductions for clearly personal expenses and his claim that a mansion is a business investment despite publicly identifying it as a family residence. Trump’s decades-long ability to avoid consequences for this tax dodging demonstrates that he enjoys a set of rules more generous than anything the rest of us can imagine.
“The New York Times report did not include Trump’s tax returns for 2018 and 2019, the first two years after the 2017 Tax Cuts and Jobs Act went into effect. The law opened new tax avoidance opportunities for wealthy business owners.
“F. Scott Fitzgerald wrote, ‘Let me tell you about the very rich. They are different from you and me.’ As Fitzgerald knew, they often play by their own set of rules. Trump may not be as rich as he says, and he may be losing money by the minute, but when it comes to his taxes, he still fits that description.”