By Philip Baillargeon
President Donald Trump takes questions from the White House press corp during a briefing.
Source: The Guardian, https://www.theguardian.com/us-news/2020/sep/30/donald-trump-taxes-workers-contrast
Amidst a weekly news cycle that will likely go down as one of the most tumultuous weeks in American political history, a shocking development risks being buried; President Trump’s personal finances tell a vastly different story than the successful businessman persona he played on TV, according to a series of financial records obtained by the New York Times. While we still do not have any official release from the Trump estate, nor do we have any records from his businesses, these personal records are enough to significantly alter the tide of the race (assuming the president is still on the ballot with his recent diagnosis). This is by no means an extensive analysis of the entire report (you can find the original article here, at https://www.nytimes.com/interactive/2020/09/27/us/donald-trump-taxes.html), this list should serve as a helpful primer to understand the most shocking details of this extensive, world-class report.
- $750
If you’ve been following this situation as it has developed, you’ve likely heard this number. The President of the United States paid $750 in federal income taxes in 2016 and 2017, and in ten of the fifteen years for which the Times was able to obtain records, he paid no income taxes at all. This is presumably not all the president paid to the federal government; Social Security, Medicare, and taxes for employees in his homes are not a part of federal income tax. However, it is also worthwhile to note that working class Americans pay far more than $750 on their income (someone who makes $10,000 per year pays 12% of their income toward federal income taxes, or roughly $1,200). Richard Nixon was lambasted for paying $790 in 1970, with a presidential salary that is half of the president’s and no adjustment for inflation. To further contextualize this number, “The Apprentice” alone brought him $427.4 million in revenue, which was dispersed throughout golf courses and other businesses which have been net losses for years. So, yes, the president is correct when he says he paid much more than $750 in federal income taxes. However, it remains to be seen whether he paid what should be reasonably expected.
- The Audit
From a foreign policy perspective, the most concerning finding of this report is not the number $750; $300 million (that’s $300,000,000 for you folks counting at home) looms much, much larger. For most nonpartisan national security officials who work in government, holding any debt is a huge, and often disqualifying, red flag on an application. Foreign governments often use debt to manipulate government actors and abuse weaknesses to get access to sensitive information.
The President of the United States owes $300 million dollars to the United States government. And he will have to pay it back in the next four years.
Candidate Trump promised to pursue no foreign deals while he was president. He netted $73 million from overseas markets in his first two years in office, including countries with leaders that lean toward authoritarianism, including $3 million from the Philippines, $2.3 million from India, and $1 million from Turkey. This is an incredibly hairy situation that would arise in a second term, which has now been complicated by President Trump’s recent COVID-19 diagnosis. And, as we will later discuss, President Trump has been cutting corners for years to acrew even this monstrous level of debt.
- It’s All in the Family
In examining the records of President Trump, analysts found a mysterious $26 million, explained away as “consulting fees” and written off as a business expense, deducted from his bottom line between 2010 and 2018. On nearly all of his projects, this “fee” was almost exactly 20% of the revenue made. Often this is a sign of kickbacks or middle men who shuffle money to reduce taxes paid, however, in this case, there appears to be a simpler solution.
Enter Ivanka Trump, heiress to the Trump Empire and daughter to the president.
Ivanka Trump released her tax records, as is customary when someone joins the White House staff, in 2017, and there appear to be exact matches between these “consulting fees” on President Trump’s records and payments from a consulting company she co-owns. Similar companies who have used these tactics to avoid paying taxes have lost to the I.R.S. in court, such as an Illinois accounting firm paid themselves via corporations they created. Partners of the Trump Organization have committed on the record that there were no consultants on site, but tax records show millions being granted to organizations like TTT Consulting L.L.C. (with the “T’s” presumably implying a Trump family member was involved).
And that isn’t the end of it. Dubious write offs, family involvement, and potential profiteering of the presidency litter this report. I encourage readers to further read the full report linked above, but I hope this small snippet serves as a substantial primer when discussions of the president’s business dealings arise again.
