On Sunday, The New York Times published a blockbuster report on the President’s tax returns, revealing details from decades of confidential filings and information related to Trump’s businesses. The report paints a picture of a president whose business interests are in financial distress and whose looming money challenges could push him into bankruptcy in the near future. The findings pose a troubling, but important, question to ask:
Is President Trump actually broke?
The explosive reporting by The New York Times is based on a review of two decades of Trump’s personal and corporate tax record, ranging from his days as a high-profile real estate developer to the beginning of his tenure as President. In publishing their findings, the Times explained the rationale behind their decision.
“We are publishing this report because we believe citizens should understand as much as possible about their leaders and representatives — their priorities, their experiences and also their finances. Every president since the mid-1970s has made his tax information public,” the Times wrote in an editor’s note accompanying the report. “Mr. Trump, one of the wealthiest presidents in the nation’s history, has broken with that practice.”
The Times added, “The records show a significant gap between what Mr. Trump has said to the public and what he has disclosed to federal tax authorities over many years.”
Among the key findings of the Times reporting is the fact that the President paid no federal taxes in 11 of the 18 years reviewed by the newspaper, and only paid $750 of personal taxes in 2016 and 2017. In order to reduce his taxes, the President claimed a wide range of personal expenses, including the Trump’s lavish use of multiple residences, personal aircraft and even hairstyling for his television appearances. The reporting also shows a longtime strategy of tax avoidance using questionable strategies to reduce taxable income. Among the tactics detailed by the Times is the apparent payment of a substantial consulting fee to his daughter, Ivanka Trump, even though she was also an executive officer of the Trump Organization at the time.
The Times reporting also paints the picture of a President that is not doing nearly as much financial “winning” as he has claimed. Based on a review of corporate tax returns, it appears several of the Trump Organization’s 500 business entities are losing substantial amounts of money. Among the biggest losers? The famed Trump golf courses appear to have lost over $315 million since 2000. Even the well-known Trump hotel in Washington D.C., has appeared to struggle, with tax filings claiming it has lost $55 million since its opening in 2016.
However, it could be that the President’s most perilous financial circumstances are ahead of him. The long running audit of the Trump Organization’s federal returns, including a $72.9 million refund, remains unresolved. Depending on the final decision of the Internal Revenue Service, a reversal the large refund, plus interest and potential penalties, could result in the President and his businesses owing the federal government over $100 million. The Trump Organization also faces looming debt payments on Trump properties that will undoubtedly place financial pressure on the President and his businesses. The Times reports that the President appears to be personally on the hook for over $421 million of loans made by third-parties to Trump entities. There is also a $100 million mortgage due on the iconic Trump Tower.
The financial picture of Trump painted by The New York Times, based the President’s own tax filings, poses deeply troubling questions about the President’s past and future. When running for President, Trump held out the story of his financial success as an example of how he could “help make America great again.” But the reality then, like perhaps now, is that the President’s financial failures outweighed his successes, making the narrative he told the country grossly misleading. One can only conclude that he knew his tax returns would reveal such truths, and that is why he has been adamant about refusing to release them.
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SOURCE: Forbes – Seth Cohen