Death and Taxes

Report: Donald Trump Pays Less in Taxes Than People Living Below the Poverty Line, Most Likely Because He’s a Crook

He paid just $750 in federal income taxes in both 2016 and 2017 and $0 in 10 of the previous 15 years. 
donald and melania trump
By JIM WATSON/AFP/Getty Images.

Since announcing his bid for the presidency in 2015, Donald Trump has told, conservatively, 736,953 lies. One of the biggest whoopers that he frequently repeated on the campaign trail, when asked why he was qualified for office, was that he was “really rich” and “had built a great company.” At the time, this line didn’t pass the smell test among the many people aware of the six business he put into bankruptcy or his reputation, in New York social circles, as a conman. Unfortunately, Trump’s failure to release his tax returns has thus far made it difficult to know how much of his claim to be a genius businessman is a lie, or where exactly the money he does have has come from. Until now! On Sunday, the New York Times published the results of a major investigation into the the president’s returns, revealing decades of not only massive losses but highly suspect tax “avoidance” that has allowed him to pay virtually nothing to the federal government in nearly 20 years.

Specifically, according to reporters Russ Buettner, Susanne Craig, and Mike McIntire, the president paid $750 in federal income taxes in 2016, another $750 in 2017, and nothing whatsoever in 10 of the previous 15 years. If that sounds crazy to all you taxpaying members of society, it is! While the uberwealthy have long been known for employing highly paid accountants to perform tax arbitrage that lowers their bills to the government, in 2017, per IRS figures cited by the Times, the average federal income rate for people in the the top 0.001% of all filers was 24.1%, meaning that over the past two decades, Trump has paid roughly $400 million less in combined federal income taxes than the richest people in the country. Put another, more offensive way? In the years Trump actually paid more than $0 to the federal government, he still paid less than someone making $18,000 a year, Seth Hanlon, a Democratic policy adviser, pointed out.

So, how did he do it? For starters, despite making about $427.4 million between 2004 and 2018 through licensing deals and The Apprentice, money-losing ventures have helped him reduce his tax bill to almost nothing:

Since 2000, he has reported losing more than $315 million at the golf courses that he often describes as the heart of his empire. Much of this has been at Trump National Doral, a resort near Miami that he bought in 2012. And his Washington hotel, opened in 2016, has lost more than $55 million.... But his unprofitable companies still served a financial purpose: reducing his tax bill. The Trump Organization—a collection of more than 500 entities, virtually all of them wholly owned by Mr. Trump—has used the losses to offset the rich profits from the licensing of the Trump brand and other profitable pieces of its business. The reported losses from the operating businesses were so large that they often fully erased the licensing income, leaving the organization to claim that it earns no money and thus owes no taxes. This pattern is an old one for Mr. Trump. The collapse of major parts of his business in the early 1990s generated huge losses that he used to reduce his taxes for years afterward.

As The Nation’s Elie Mystal notes, while it’s not hard to believe Trump is a terrible businessman, it is slightly hard to believe that his losses were truly so bad that they enable him to basically pay nothing in taxes: 

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In a statement, Alan Garten, a lawyer for the Trump Organization, told the Times that “most, if not all, of the facts appear to be inaccurate,” and asked to see the documents on which they were based. When the Times declined, he only quibbled with the amount of taxes Trump paid. “Over the past decade, President Trump has paid tens of millions of dollars in personal taxes to the federal government, including paying millions in personal taxes since announcing his candidacy in 2015,” Garten said in a statement. But as the Times points out, using the term “personal taxes” likely conflates income taxes with other federal taxes Trump has paid over the years, including Social Security, Medicare, and taxes for household employees. 

Aside from the losses, Trump was able to minimize his tax bill through a massive, eight-figure refund that the self-proclaimed multibillionaire received from the government:

Trump did face large tax bills after the initial success of The Apprentice television show, but he erased most of these tax payments through a refund. Combined, Mr. Trump initially paid almost $95 million in federal income taxes over the 18 years. He later managed to recoup most of that money, with interest, by applying for and receiving a $72.9 million tax refund, starting in 2010. The refund reduced his total federal income tax bill between 2000 and 2017 to an annual average of $1.4 million. By comparison, the average American in the top .001 percent of earners paid about $25 million in federal income taxes each year over the same span.

According to the Times, the refund—and sit down because this is probably going to come as a shock—may not have been entirely above board. That’s because when Trump applied for it, he cited a huge financial loss that may have been related to the failure of his Atlantic City casinos, which he publicly walked away from after a dispute with his bondholders, claiming that his partnership interests were “worthless and lack potential to regain value,” per the Times. Federal law states that investors can declare a total loss on an investment, as Trump did, but only if they receive absolutely nothing in return. And in the case of Trump, he did get something: 5% of the new casino that was created after he dumped his stake. Incidentally, when Trump claims that he can’t release his tax returns because he’s being audited, that’s only half true: as tax experts have said many times over the last four years, nothing, including an audit, would preclude him from releasing his returns. But, unlike most of the things that come out of Trump’s mouth, in this case the audit wasn’t entirely made up:


In addition to the giant losses and possibly-not-legit refund, Trump has also been able to, again, pay virtually nothing in federal income taxes by writing off virtually every aspect of his life as a business expense. That, according to the Times, has included flights between his homes, meals, and $70,000 worth of haircuts that, it has to be said, was not money well spent. He also classified his Westchester estate, Seven Springs, as an investment property, which allowed him to write off $2.2 million in property taxes since 2014, despite the fact that (1) Eric Trump told Forbes that same year that the place is a family compound and (2) his blue-state punishing tax law limited other people from writing off only $10,000 a year in property taxes.

And then, of course, there are the consulting fees paid to Princess Purses:

Examining the Trump Organization’s tax records, a curious pattern emerges: Between 2010 and 2018, Mr. Trump wrote off some $26 million in unexplained “consulting fees” as a business expense across nearly all of his projects. In most cases the fees were roughly one-fifth of his income: In Azerbaijan, Mr. Trump collected $5 million on a hotel deal and reported $1.1 million in consulting fees, while in Dubai it was $3 million with a $630,000 fee, and so on. Mysterious big payments in business deals can raise red flags, particularly in places where bribes or kickbacks to middlemen are routine. But there is no evidence that Mr. Trump, who mostly licenses his name to other people’s projects and is not involved in securing government approvals, has engaged in such practices.


As the Times notes, and both Ivanka and the president have frequently noted as well, the president’s eldest daughter was a top executive at the family business until joining the White House and as such, received a cut of the profits on its projects, including the Vancouver and Hawaii ones. So it’s not clear why she would have also been hired as a consultant unless—and we’re certainly not suggesting this but someone else might—the whole thing was actually about minimizing her father’s tax bill.

In addition to showing how Trump has been able to, again, pay less in federal income taxes than someone living below the poverty line, his returns have also revealed where a large chunk of his money is coming from: lobbyists and foreign governments, the kind he could, theoretically, do favors for as president of the United States, as well as anyone else looking to cut a check to kiss the ring:

His properties have become bazaars for collecting money directly from lobbyists, foreign officials and others seeking face time, access or favor; the records for the first time put precise dollar figures on those transactions. At the Mar-a-Lago club in Palm Beach, Fla., a flood of new members starting in 2015 allowed him to pocket an additional $5 million a year from the business. In 2017, the Billy Graham Evangelistic Association paid at least $397,602 to the Washington hotel, where the group held at least one event during its four-day World Summit in Defense of Persecuted Christians.


Despite having been able to both profit off the presidency and pay the federal government almost nothing in 20 years, Trump, the Times reports, is in a precarious financial situation, one which is only going to get significantly worse in the next few years:

...the presidency has not resolved his core financial problem: Many of his businesses continue to lose money. With The Apprentice revenue declining, Mr. Trump has absorbed the losses partly through one-time financial moves that may not be available to him again. In 2012, he took out a $100 million mortgage on the commercial space in Trump Tower. He has also sold hundreds of millions worth of stock and bonds. But his financial records indicate that he may have as little as $873,000 left to sell.

He will soon face several major bills that could put further pressure on his finances…. He is personally on the hook for some of these bills. In the 1990s, Mr. Trump nearly ruined himself by personally guaranteeing hundreds of millions of dollars in loans, and he has since said that he regretted doing so. But he has taken the same step again, his tax records show. He appears to be responsible for loans totaling $421 million, most of which is coming due within four years.

Of course, asked about all of this on Sunday, Trump insisted the meticulously reported story was completely made up:

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“It’s fake news,” he told reporters, who probably could have just printed the quote without his comment. “It’s totally fake news…actually I pay tax. And you’ll see that as soon as my tax returns…it’s under audit…the IRS does not treat me well. They treat me very badly.”

Anyway, here’s a picture of Trump pretending to sign a large tax bill in 2016:

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And just for posterity, here’s the one in which he suggested Barack Obama was a jerk for only paying an effective tax rate of 20.5%

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