The self-styled mogul has gotten away with a minuscule tax burden by reporting himself to the Internal Revenue Service as a major loser for the better part of two decades. He paid $750 in income taxes in 2016 and 2017 and nothing in 10 of the previous 15 years, according to a blockbuster New York Times story.
With 36 days until the election, the revelations already are reverberating through the presidential campaign.
The paper’s Russ Buettner, Susanne Craig, and Mike McIntyre got hold of closely guarded tax return information for Trump and his companies dating back more than two decades. They reveal while the president’s business empire has taken in hundreds of millions of dollars a year, it also “racks up chronic losses that he aggressively employs to avoid paying taxes.”
The first revelations from the trove — the Times teased more is coming in the weeks ahead — threaten to tear a fresh hole in the public persona Trump has built on his claims of business success. Indeed, according to the report, the president’s personal finances remain under heavy strain. More than $300 million in loans, “obligations for which he is personally responsible,” are coming due in the next four years. And a judgment pending from the IRS on the legitimacy of an old tax refund could cost him $100 million.
“Ultimately, Mr. Trump has been more successful playing a business mogul than being one in real life,” the Times reporters conclude.
Trump denies the report, but it is already breaking through in the campaign and beyond.
The president dismissed the story as “fake news” at a White House news conference Sunday. “Actually, I paid tax,” the president said, claiming, as he has since his 2016 campaign, that he will release tax returns proving it once the IRS finishes an audit. “They’ve been under audit for a long time. The IRS does not treat me well. They treat me like the tea party — like they treated the tea party. And they don’t treat me well.”
The story makes clear Trump is hardly a victim. He claimed write-offs “for the cost of a criminal defense lawyer and a mansion used as a family retreat,” not to mention more than $70,000 in hair-styling expenses, $210,000 to a party photographer, and fuel for his private jet. He secured millions of dollars in deductions on business consultancy fees, at least some of which he appears to have paid his daughter Ivanka for work on Trump Organization projects, even though she is an executive at the company.
And among other aggressive tax deduction schemes Trump has employed, a $72.9 million refund he received is now at the center of an IRS inquiry.
Democratic presidential nominee Joe Biden’s campaign wasted no time turning the news into an ad that notes most working people pay Uncle Sam more than Trump did in his first two years in office:
And it is now hawking merchandise with the message:
Others drew the same comparison. From Grace Haley, a researcher at the nonpartisan Center for Responsive Politics:
From Kevin Sieff, Washington Post bureau chief for Mexico and Central America:
From Seth Hanlon, a senior fellow at the left-leaning Center for American Progress:
Meanwhile, Trump in the past has criticized others for tax avoidance:
That includes then-President Barack Obama, whom Trump suggested was paying too little:
But as The Post’s Christopher Ingraham notes, Obama paid more than 2,300 times as much in taxes in his first year in office as Trump did:
There may be more than unfairness and hypocrisy afoot. Former prosecutor and Justice Department inspector general Michael Bromwich indicated he believes Trump has committed multiple forms of fraud:
The 10,000-word story is packed with other revelations. Here’s a look at some.
Trump is not the real estate wizard he has claimed to be.
Ironically, Trump’s brand, built on his relentless self-promotion as a real-estate genius, has been much more successful than Trump’s real-estate investments.
Trump earned $427.4 million from “The Apprentice,” and licensing and endorsement deals that followed as the show revived his celebrity profile, the Times reports. Then he went on a real estate buying binge unlike any since the 1980s.
“When ‘The Apprentice’ premiered, Mr. Trump had opened only two golf courses and was renovating two more,” the reporters found. “By the end of 2015, he had 15 courses and was transforming the Old Post Office building in Washington into a Trump International Hotel. But rather than making him wealthier, the tax records reveal as never before, each new acquisition only fed the downward draft on his bottom line.”
The losses have been eye-popping. “Over all, since 2000, Mr. Trump has reported losses of $315.6 million at the golf courses that are his prized possessions. For all of its Trumpworld allure, his Washington hotel, opened in 2016, has not fared much better. Its tax records show losses through 2018 of $55.5 million. And Trump Corporation, a real estate services company, has reported losing $134 million since 2000.”
Foreign interests have become major boosters of Trump’s businesses.
While the Times probe did not turn up any new information about the president’s business ties to Russia, it found other foreign interests using his businesses to curry favor.
“When Turkish-American relations were at a low point, a Turkish business group canceled a conference at Mr. Trump’s Washington hotel; six months later, when the two countries were on better terms, the rescheduled event was attended by Turkish government officials,” the Times writes. “Turkish Airlines also chose the Trump National Golf Club in suburban Virginia to host an event.”
Indeed, Trump’s foreign revenue amounted to $73 million during his first two years in he presidency. “And while much of that money was from his golf properties in Scotland and Ireland, some came from licensing deals in countries with authoritarian-leaning leaders or thorny geopolitics — for example, $3 million from the Philippines, $2.3 million from India and $1 million from Turkey.”
He likely has not benefited much from the stock market rallies he touts.
In recent years, with Trump’s key businesses heading deeper into the red, “he appears to have filled the cash-flow gaps with a series of one-shots that may not be available again.”
That includes selling off nearly all of his stocks. “In January 2014, he sold $98 million in stocks and bonds, his biggest single month of sales in at least the last two decades. He sold $54 million more in stocks and bonds in 2015, and $68.2 million in 2016. His financial disclosure released in July showed that he had as little as $873,000 in securities left to sell.”
Expect Biden to make an issue of Trump’s tax avoidance at their first debate.
Trump takes the debate stage with Biden for the first time tomorrow night. The economy is set to receive a dedicated 15-minute block from Fox News’s Chris Wallace, who is moderating.
Email us questions on the topic you’d like to see the candidates answer, and we’ll feature the best in tomorrow’s note.
Money on the Hill
Pelosi says Democrats will send new relief offer to Steven Mnuchin soon.
Some Democratic lawmakers continue to pressure House Speaker Nancy Pelosi to make a deal: “I trust [Treasury] Secretary Mnuchin to represent something that can reach a solution, and I believe we come to an agreement,” Pelosi said on CNN’s ‘State of the Union.”
“She added that if a deal isn’t struck soon, Democrats might vote on a House-only version of a coronavirus relief package, including funds for airlines and restaurants, and more Paycheck Protection Program funding,” per Bloomberg News’s Billy House.
- Where thing stand: “Recently, Pelosi has insisted that the White House agree to at least $2.2 trillion in new aid, including funds for cash-strapped state and local governments and $600 per week in supplemental unemployment benefits. Trump has indicated he could support as much as $1.5 trillion in aid, higher than the $650 billion put forth in a ‘skinny’ aid package by Senate Republicans.”
From The U.S.:
- U.S. tops 7 million cases, less than a month after previous milestone: “Among the states witnessing the highest per capita increases over the past week were North Dakota, South Dakota, Wisconsin, Utah and Iowa — highlighting how the virus is now spreading across the Great Plains and Midwest in a shift that experts have attributed to social gatherings hosted by young people and the return to in-person classes and dormitory life at major universities,” Antonia Farzan reports.
- Georgia withholds school case counts from public: “The decision not to reveal the number of covid-19 case counts and related quarantines and ‘clusters’ means the only recourse for parents and teachers trying to gauge the risk is the willingness of their local school system to publicize its own data. Some school districts in Georgia are not revealing what is going on in each of their schools, though,” the Atlanta Journal Constitution’s Ty Tagami reports.
- Florida education commissioner orders Miami to open schools earlier than planned: “Florida Education Commissioner Richard Corcoran has ordered Miami-Dade County Public Schools to fully open its buildings five days a week by Oct. 5. That’s more than two weeks earlier than the system, the fourth largest in the country, had decided to do after a marathon 29-hour meeting last week,” Valerie Strauss reports.
From the corporate front:
- Facing its worst crisis since 9/11, airline industry set to cut more than 35,000 jobs this week: “Tens of thousands more have already taken unpaid leave, or left their airlines for good. Others have seen hours cut and worry about pay cuts this fall More than 1,800 U.S. airline planes remain parked — a third of the industry’s fleet — and cuts to service are likely to follow the job losses,” Ian Duncan, Lori Aratani and Michael Laris report.
- Hawaiian Airlines to offer coronavirus tests for passengers: “Hawaiian Airlines to offer coronavirus tests for passengers. Friday’s announcement makes Hawaiian the second U.S. carrier to offer travelers preflight access to tests,” Lori Aratani reports.
- Grocers build stockpiles ahead of winter: “Supermarkets are stockpiling groceries and storing them early to prepare for the fall and winter months, when some health experts warn the country could see another widespread outbreak of virus cases and new restrictions,” the Wall Street Journal’s Jaewon Kang and Annie Gasparro reports.
When superpowers collide
Roughly 3,500 companies sued over China tariffs.
Some of America’s biggest names are in the legal fight: “Tesla Inc., Ford Motor Co, Target Corp., Walgreen Co and Home Depot have sued the Trump administration in the last two weeks over the imposition of tariffs on more than $300 billion (£235.35 billion) in Chinese-made goods,” David Shepardson reports.
“The suits, filed in the U.S. Court of International Trade, named U.S. Trade Representative Robert Lighthizer and the Customs and Border Protection agency and challenge what they call the unlawful escalation of the U.S. trade war with China through the imposition of a third and fourth round of tariffs. The legal challenges from a wide variety of companies argue the Trump administration failed to impose tariffs within a required 12-month period and did not comply with administrative procedures.”
Judge blocks Trump’s ban on new TikTok downloads. “TikTok received a reprieve of its ban from U.S. app stores on Sunday after a federal judge in Washington granted a preliminary injunction blocking an order from [Trump],” Rachel Lerman reports. “It was the second setback for the Trump administration in its effort to curb U.S. residents’ access to popular Chinese mobile apps. Last weekend, a federal magistrate in San Francisco cited First Amendment issues in blocking a proposed ban of the WeChat app.”
Chinese companies head home amid trade war: “China’s most ambitious and fastest-growing companies once flocked to U.S. markets to raise money. Now rising U.S. hostility and the increased attractions of listing closer to home are tipping the scales toward Hong Kong and Shanghai,” WSJ’s Quentin Webb and Jing Yang report.
“Since November, eight Chinese companies that originally went public on the New York Stock Exchange or the Nasdaq Stock Market have added listings in Hong Kong, raising a total of $25.6 billion, according to Refinitiv. These companies, with a combined market capitalization of nearly $1 trillion, include e-commerce giant Alibaba Group Holding Ltd. and Yum China Holdings Ltd. , China’s biggest restaurant operator.”
- The exodus is increasing: “The pace of such partial migrations has picked up this summer, as tensions between the U.S. and China have escalated, and more are likely to follow, bankers, analysts and investors say. The companies are maintaining their U.S. listings, but having stock traded in Hong Kong is a safety net if they have to leave exchanges in New York.”
U.S Chamber set to launch widespread lobbying for Supreme Court fight: “The effort comes as the traditionally conservative-leaning Chamber has faced weeks of intense backlash for its decision to endorse 23 vulnerable House Democratic freshmen in November. The criticism reached a fever pitch last week, culminating in a call from Trump himself,” Axios’s Alayna Treene reports.
“Similar to their previous pushes to help confirm Justices Neil Gorsuch and Brett Kavanaugh, the Chamber plans to roll out a detailed campaign in support of Barrett, including: Issuing a ‘Key Vote letter’ to Capitol Hill … [and] encouraging key members of the Chamber to elevate Judge Amy Coney Barrett’s platform and explain why her confirmation is aligned with the business community’s priorities.”
AIG’s top Black ranks get even thinner: “American International Group Inc. has lost four senior Black managers in recent weeks, including two who were tasked with improving the diversity of the insurer’s ranks,” Bloomberg News’s Max Abelson and Katherine Chiglinsky report.
“AIG, which has no Black executives among its 12-person leadership team, is one of many big U.S. companies that pledged to build a more inclusive company after the police killing of George Floyd this May.”
- United Natural Foods is among the notable companies reporting its earnings, per Kiplinger.
- The first presidential debate is held in Cleveland, Ohio.
- McCormick is among the notable companies reporting its earnings.
- The Labor Department reports the latest weekly jobless claims
- PepsiCo, Bed Bath & Beyond and Conagra Brands are among the notable companies reporting their earnings.
- The Labor Department releases the monthly jobs report, the last before Election Day.