On her March 14th, 2017 daily broadcast, MSNBC political analyst Rachel Maddow made public the 2005 federal tax returns of President Donald Trump. This was especially newsworthy, as Trump has doggedly and infamously decreed that he would never release his returns for public consumption.
Although there is no constitutional or legal mandate for those seeking or holding the presidency to do so, not since Richard Nixon (see: “Well, I am not a crook…”) has a president refused to disseminate the financial records which indicate their contributions to the American economy, potential and realized business ties with foreign governments, or otherwise legitimate/illegitimate tax write-offs.
With Nixon, who faced increased public and legal scrutiny for his role in the Washington D.C. break-in at the Democratic National Committee (DNC) headquarters, it was both humbling and embarrassing when his tax documents were leaked amidst the Watergate investigations in 1973. Nixon’s leaked returns showed he only paid, by his own admission, “nominal” federal income taxes of $792.81 in 1970 and $878.03 in 1971. This was against the backdrop of him reporting income in excess of $200,000. Although Nixon eventually resigned the presidency due to certain impeachment for his role in Watergate, the release of his tax returns and subsequent revelation of his financial improprieties played a major role in his eventual downfall.
That was the last time a president refused to disclose their returns. Fast forward to Trump.
In the two pages of leaked federal returns, obtained via mail by forensic tax expert David Cay Johnston, we learn that now-President Trump made $67 million from his real estate holdings, $32 million derived from capital gains, $42 million from business income, $9 million in taxable interest and $998,599 in salary – totaling nearly $153 million in 2005.
From that amount, he reduced his federal tax liability by claiming more than $100 million in business losses. In an effort to increase damage control in the hours before the release by Maddow, The White House issued a statement acknowledging that Trump paid approximately $38 million dollars in taxes, at an apparent 25% tax rate off of his reported income of $152 million.
We know that this tax rate, and therefore tax liability, could have been much higher – had Trump not claimed quite so many losses. According to the White House, many of these losses were due to “large-scale depreciation for construction,” which we can only guess are tied to his business’ real estate holdings.
We also know that out of the $38 million in federal taxes Trump paid in 2015, $31 million was paid out of strict obligation, based on the mandatory alternative minimum tax. That tax serves as a (temporary – as Trump currently seeks to abolish it) stopgap against the wealthy paying little to no taxes at all by affixing a certain percentage (20-28%) based upon filing status, among other factors. Without this minimum tax, it is reasonable to believe that Trump could have paid far less in tax liability on his reported earnings. In fact, the New York Times reports that “Without it, Mr. Trump would have paid about $5 million in regular taxes, plus nearly $2 million in self-employment taxes, on $153 million in income in 2005.”
Trump and his colleagues, both during his presidential campaign and throughout the tenure of his presidency, have lauded his ingenuity at legally avoiding his tax burdens. But his creativity at dodging tax burdens is only a part of a troubling and disconcerting series of questions regarding his financial portfolio.
Out of ostensibly hundreds of pages of financial disclosures and supporting documentation from a man with varied business and investment interests, only two pages of tax returns were released. There are no supporting schedules to address a number of deeply troubling questions, including his alleged business ties to foreign governments such as Russia.
Without the supporting schedules, we do not have a full picture of his business interests, sources of income or other contributions which may make him beholden to a number of special interests, entities or governments. The possibility for impropriety, leading to degradation in the security of the nation is a truly real concern. This concern is not being met with the gravitas or candor befitting the ultimate steward of the public trust – the President of The United States.
There is speculation that President Trump himself, as a means of satiating public and media demand for insight into his financial holdings, made the two pages of returns available.
History may prove that Trump is making the ill-advised error that, instead of quelling demand, secrecy has only served to hearten the public hunger for increased transparency.
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