America’s richest President pays the lowest taxes. New York Times has published an extensive expose analysing Trump’s personal and corporate tax records of the last two decades. It has also taken his holdings in the US and abroad under its radar.
In its editorial note, NYT said that the published article is first of the series. It will be followed by other articles in weeks ahead. The investigation reveals an explicit link between Trump’s business and his position. It also highlights the contradiction between Trump’s personal interests and larger national interest.
Trump has dismissed the report saying it is completely fake news. New York Times expressed its concern towards protecting their source. It cannot make records public for testimony.
How Trump avoided taxes?
NYT revealed that Trump has not paid federal income tax in 11 of the 18 years it examined. In 2017, after gaining the presidency, he merely paid $750. This comes in stark comparison to Obama, who paid $100,000 yearly.
Trump organisation, an umbrella of around 500 entities has been declaring losses consistently, allowing him to evade taxes. There are a host of measures he deploys to avoid paying personal and corporate taxes. These measures include a large amount of consulting fees, tax refunds and manipulate business expenses.
He grabbed a tax refund of $72.9 million citing huge financial losses in 2010. The legitimacy of the tax refund questioned subsequently. Internal Revenue Service started its investigation against Trump in 2011 and is yet to arrive at any conclusion. IRS and Trump share bitter relations. If proven guilty, he will have to pay back $100 million, including interest.
NYT investigation reveals that Trump and his family continue to avail personal benefits in the name of business expenses. Companies hold the right to write off business expenses, leading to a sharp reduction in tax bills. Trump’s residence, aircraft, expensive hair cuts amounting to $70,000 are all listed under business expenses. His extra lavish estate of Seven Springs in New York, though listed as an investment property, is utilised for personal purposes. This allows Trump to write off massive property taxes since 2014.
The irony of losses and Trump’s lavish life
Donald Trump’s prominent businesses are reporting huge losses. Yet, it doesn’t stop the self-proclaimed billionaire from leading an extra lavish life. His golf courses have reported $315 million loss since the year 2000. His 2016 Washington hotel has declared a loss of $55 million. Moreover, the Trump Organisations, a network of around 500 entities is reporting regular losses.
The President of the USA has a vast spread of businesses– most of which running at losses. Trump’s lavish life is supported by money floating from foreign agencies and interest groups in the US. But that’s not all. Trump deliberately uses his losses to evade taxes. These evasions bear the expense of his lavish personal life. It is important to understand the roots of Trump’s expanded business.
Donald Trump made great fortunes with the 2004 reality competition show, The Apprentice. He hosted first seven seasons of the show, claiming half of the profit. Later his family members also featured in the NBC show.
Trump used this money to buy estates, golf courses, businesses and whatnot. Since then, these properties are reporting losses. Tax is evaded and tax refund is claimed. The money from The Apprentice compensated for losses.
The Apprentice not only earned him money. It earned a brand name for him, which he would cash for more money, power and position. The Presidential victory in 2016, if not mostly then partly, is the result of his soaring popularity. It is needless to say that the business tycoon was heavily funded during the 2016 elections on the credibility of his brand name.
What’s ahead for Trump
Trump dissociated himself from The Apprentice in 2017. He is running under huge debt. As reported, his businesses are at loss. If the battle with IRS goes against him then he will have to repay $100 million.
Much depends upon 2020 electoral results. It will be important to see if Trump could secure a victory in the US Presidential election and what new plan he figures out.