Trump, the Presidential Billionaire, only paid $750 in federal income taxes

Rebecca Hearns, Staffer

In late September, The New York Times reported that Donald J. Trump has been avoiding paying federal income taxes for several years. The reality of what will now lead to an investigation of tax fraud is that Trump has been losing more money than he is making. According to the Times, in each year of 2016 and 2017, Trump paid $750 in income taxes.

During the first presidential debate with Joe Biden and Trump, the event moderator Chris Wallace asked Trump, “Will you tell us how much you paid in federal income taxes in 2016 and 2017?”

Trump replied, “Millions of dollars.”

Wallace questioned, “You paid millions of dollars?”

“Millions of dollars, yes,” said Trump.

“So not $750?” said Wallace.

Trump repeated, “Millions of dollars, and you’ll get to see it– and you’ll get to see it.”

In a CNN article by Chris Cillizza titled, “Donald Trump made a BIG mistake on his taxes answer in the 1st debate,” he said that Trump’s response to Wallace’s above question was “fuzzy” for a reason. Trump said that he paid millions of dollars because it allows him to consider state income tax, Social Security, Medicare, investment income, etc. Now the president can dispute the Times story “as fake without engaging with its central premise: That he paid little (or no) federal income tax for the vast majority of the last two decades.” 

What does it mean when apparently Trump has been losing money for a number of years?

According to Forbes, “Since 2000, Trump has reported $315.6 million in losses from his golf courses, while his Washington hotel reported over $55 million in losses through 2018, according to the records, just two years after the hotel had opened.” Many people conclude that Trump is terrible at business or good at hiding how rich he truly is. 

Derek Thompson, a journalist for The Atlantic, wrote “Do Trump’s Taxes Show He’s a Failure, a Cheat, or a Criminal?” In the article, he explores three explanations for why Trump has avoided federal taxation for so long. 

The first of the explanations is that Trump’s businessman tycoon persona is just a façade. The Apprentice starring Trump made millions, and he poured all of this money into investments that failed. This would decrease his taxable income, so in a way, his failures have bottomed out his income taxes. 

“Trump is no stranger to losing money. Tax forms obtained by The New York Times showed that from 1985 to 1994, Trump lost more money than nearly any other individual American taxpayer. But his net worth is estimated at $2.5 billion,” wrote Thompson. 

The second explanation for why he has avoided his taxes for almost all of this century could be suspicious maneuvering of money. Trump paid Ivanka Trump $700,000 in “consulting- fees,” which is known to be a telltale sign of avoiding estate, payroll, or state taxes. 

Trump continuously go back to banks for small loans. Like clockwork, he filed for bankruptcy or renegotiated loan terms so he could avoid paying loans back in full. Steve Rosenthal of the Tax Policy Center was interviewed by Thompson and said, “But when a bank writes off your debt, the discharged debt is income. You have to report it as taxable income. Trump never did.” Instead, Trump repeatedly ducked his obligations to lenders and the IRS, perfecting the same playbook—”borrow, spend, deduct, and walk away.”

Lastly, and the one that holds criminal weight, is the proposition of money laundering. Money laundering is when one conceals the origin of illegal money through transfers from foreign banks or legitimate businesses. For example, Trump’s golf courses seem to be losing lots of money but still manage to stay open after many years. Thompson concluded by saying, “If Trump’s golf courses and other properties were serving as money-laundering enterprises for (let’s say) Russian oligarchs, we would expect to see three things: mountains of cash materializing from basically nowhere, several large money-losing enterprises, and a disinclination to abandon those failing properties. We’re seeing all of that.”

Either way, it’s disturbing that this discussion is taking place at all. Standard restaurant chefs who work 50 hours a week only to make a median salary of $26,350 upon hearing that they have paid more in taxes than their president would likely be upset. 

The New York Times report concluded, using a quote from Trump himself in a rally in Minneapolis last October: “They say, ‘Trump is getting rich off our nation. I lose billions being president, and I don’t care. It’s nice to be rich, I guess, but I lose billions.”