For Donald Trump and the 0.01 Percent, the Best of Times
Still another reason that the American people must demand President Trump release his tax returns.
Mass demonstrations in 42 states and the nation’s capital this Saturday will demand that Donald Trump release his tax returns. Are there reasons that Americans should see Trump’s complete tax returns?
There are reasons aplenty, but first let’s put Trump’s income in the context of an important new research finding about how the American income pie is being sliced up under current government policy.
Who Really Got the Big Slice of the Pie
Turns out that nearly all the much-vilified 1 percent did not increase their slice of the national income pie between 1992 and 2012. Their income share was stable.
So, who enjoyed a larger slice?
The 1 percent of the 1 percent, the 12,000 highest income households, a group that documents show has included Trump for many years.
The research study found that nearly all this increase comes to business owners who, like Trump, use so-called pass-through entities (also known as flow-through entities) like partnerships and S Corporations. Trump owns more than 500 such business entities.
Many of these Trump entities do business with Russian oligarchs, borrow from banks owned by the communist Chinese government and are in dictatorial countries where commerce is based on favors granted by the ruler.
Without Trump’s complete tax returns going back decades, as the Clintons disclosed, we just don’t know who could be stuffing dollars into Trump’s pocket, who could be greasing his palms and—most worrisome of all—who could put the squeeze on him. And let’s not forget he once risked all just to show his total loyalty to a major drug trafficker, which alone should set off alarm bells about Trump’s conduct. Trump lied and denied about that, too.
Sadly, we can’t count on Trump to tell the truth about his huge income—or count on many of our major national news organizations to accurately report on the public record about Trump’s income and taxes.
Consider Trump’s 2005 income tax return summary, which I got in the mail in March.
Trump told Tucker Carlson “the income was actually $250 million for the year and if you notice there was about $100 million in tax deductions and depreciation and various other charges so actually the income as at the 250 level.”
Wrong. Fake news!
Trump’s tax return showed $152.7 million of income. After offsetting that with $103 million of negative income, his adjusted gross income fell to less than $50 million and his taxable income to just $31.6 million.
Carlson did not correct this Trumpian fake news. Others repeated it.
Trump is always saying some things are larger than reality, be it the imaginary ten floors he adds to the 58 stories of Trump Tower or the size of his hands. Reporters rarely point this out.
The White House issued a statement asserting Trump paid more tax than he did.
What’s troubling is that many of our best news organizations, uncritically parroted this false news from the White House. The New York Times managed to make four factual errors in a single sentence on its front page, all of which it refuses to correct:
“Mr. Trump paid $38 million in federal income taxes on reported income of $150 million, an effective tax rate of 25 percent, according to forms disclosed on Rachel Maddow’s MSNBC show.”
He paid $36.6 million income tax as Line 46 shows, the income was $152.7 million, the tax rate was just under 24 percent and the tax return was disclosed not on MSNBC but by DCReport.org, the nonprofit news service I founded, as Maddow said repeatedly.
But whom are you going to believe, White House falsehoods or documents Trump signed under penalty of perjury? Trump’s decades of experience at spreading fake news show his mastery of deception and distraction.
The White House also said there was nothing revealing in the tax return, a falsehood widely and uncritically repeated.
Wrong. Fake News! Bad journalism, sad!
The 2005 document reveals that Trump’s 1995 through 2004 income averaged at least $81.5 million. We know this because his 1995 state tax return summaries showed negative income of $918 million and by 2005 he showed just $103 million negative, indicating he used up $815 million. If he had more losses in those years then his income would have been even higher.
The 2005 return also shows that even though most of his $103 million of negative income was denied, it got him a 20 percent discount on his tax rate. That’s because America has two income tax systems. The regular rate for Trump would have been 35 percent, but he paid the Alternative Minimum Tax rate of just 28 percent because that required paying a larger dollar amount.
What the Legal Record Shows
There’s also strong evidence Trump is an income tax cheat based on two tax trials over his 1984 New York state and city tax returns. Trump took more than $600,000 of business deductions from a supposed consulting business that had zero income. Asked for receipts or other proof, Trump provided none. Still, Trump insisted that his tax lawyer, Jack Mitnick, pursue an appeal.
At one trial Mitnick was shown the only copy of the tax return in official files, a photocopy. Mitnick testified that while his signature was on the document he did not prepare it nor sign it, suggesting someone else applied it through artful use of a photocopier. That certainly raises questions about who would have an interest in creating a fake tax document.
Trump’s oldest known tax data show that in 1978 his income went negative for tax purposes. He paid nothing that year or in 1979, when his negative income was $3.4 million.
Starting in 1994 Trump expected to pay no taxes on the big income gains he testified were coming his way. Trump’s witnesses told the New Jersey Casino Control Commission that his negative income “will be more than sufficient to satisfy all anticipated taxable gains,” legalese for living tax-free.
Indeed, Trump was so confident of the future that in 1993 he bought a jumbo jet, a Lockheed L-1011, that he testified he intended to use as his personal aircraft, though he never did.
We know from court documents that Trump is a sales-tax cheat. He was one of a group of customers identified in what’s called an “empty box” scam to evade taxes on $65,000 worth of jewelry he bought in 1983 at Bulgari, across the street from Trump Tower. Mayor Ed Koch said Trump and other cheats, should have served 15 days in jail.
Trump routinely reports numbers to bankers, investment partners and voting officials that don’t match at all what he tells tax authorities. For example, Trump has claimed that his golf course in wealthy Westchester County, north of Manhattan, with its 100-foot waterfall and acre-size clubhouse is worth only $1.4 million for property tax purposes, a figure he raised later to $9 million.
In contrast, his presidential candidate financial disclosure form valued the golf course at more than $50 million and listed a profit for slightly more than one year of $10.3 million.
And that’s just one of many instances where public documents show Trump has posed as a mogul to bankers and voters, but as a relative pauper to tax authorities. You have not seen many others because Trump sometimes sues or provokes a lawsuit and then settles only on condition that the records be sealed.
To his credit, even Trump says it is unfair that he pays a lower total federal tax rate lower than many people who make a tiny fraction of what he does. His tax plan, however, would make that disparity even worse. Had it been in effect in 2005, Trump’s income tax rate would have been less than 3.5 percent, which is lower than the average tax rate of the poorest half of taxpayers, whose income averaged just $16,000.
Save Some Pie for the Rest of America
Candidate Trump promised to release his tax returns, but reneged once he won the Electoral College. Add that broken promise to his history of sales-tax cheating and filing financial reports that don’t match up, and you have the reasons that Americans need to see Trump’s complete tax returns.
We also need to watch what happens to the tax pie when Congress and the Trump White House start baking up their version of tax reform. The rest of America needs more than crumbs.
I’ll be speaking at the San Francisco tax march on April 15, next to a giant inflated chicken with Trumpian hair, and asking why Trump is too chicken to release his tax returns.
What are you hiding, Mr. President?