Trump could have paid no taxes for 18 years
New York Times obtains ’95 records that show huge loss
Donald Trump declared a loss of $916 million on his income tax returns for 1995, and — because of tax rules that favor wealthy real estate investors — he could have used that loss to avoid paying any federal income taxes for up to 18 years, according to a report in The New York Times.
The Times’ report said that the enormous loss Trump reported in 1995 — $916 million — seemed to be a holdover from the early 1990s, when his real estate and casino empire tottered and almost fell.
By 1995, Trump’s businesses were actually in better shape. But he was able to use byzantine tax laws to use those prior losses to cancel out income taxes. By the Times’ calculations, Trump might have been able to earn $50 million a year for 18 years and still pay no federal income taxes — thanks to this one giant loss, and the resulting deductions.
Howard Abrams, the director of tax programs at the University of San Diego School of Law, confirmed that tax law allows losses of this size to be applied to returns three years prior to the loss and then for the next 15 years. As a result, Trump would have potentially paid no taxes for an 18-year period.
Abrams said Trump could likely have claimed losses so massive by taking advantage of tax loopholes available only to those in the real estate industry.
“The real estate industry has been very effective in lobbying Congress,” he said. “You can have a huge tax loss in a year when your actual loss is very little or nonexistent.”
After the Times report was published, the Trump campaign issued a statement that did not dispute the accuracy of the documents cited by the Times. In fact, it complained that the documents had been published without Trump’s permission.
“The only news here is that the more than 20-yearold alleged tax document was illegally obtained,” the statement said.
The Trump campaign statement went on to defend Trump’s approach to taxes.
“Mr. Trump is a highlyskilled businessman who has a fiduciary responsibility to his business, his family and his employees to pay no more tax than legally required. That being said, Mr. Trump has paid hundreds of millions of dollars in property taxes, sales and excise taxes, real estate taxes, city taxes, state taxes, employee taxes and federal taxes, along with very substantial charitable contributions,” the statement said.
The information comes from three pages that appeared to be from tax returns Trump filed in New York, New Jersey and Connecticut. The pages had been sent anonymously by mail to reporter Susanne Craig, the paper said. Trump’s accountant from that time, Jack Mitnick, had seen the documents and believed them to be authentic, the newspaper said.
Trump is the only majorparty nominee in 40 years who has not released his federal income-tax returns. His reasons for doing so have been varied, including assertions that the taxes are under audit. IRS officials have said there is no reason a taxpayer cannot choose to make their returns public, even if they are undergoing an audit.
Trump has also suggested that the tax returns would not provide that much insight into his dealings.
The Republican nominee has often bragged about paying a low effective tax rate, claiming that he is justified because the government misspends taxpayer dollars.
“I fight very hard to pay as little tax as possible,” Trump said in May on ABC’s “This Week.”
During last Monday’s presidential debate, Democrat Hillary Clinton asserted that Trump may have, in fact, paid no federal income taxes at all in recent years.
“That makes me smart,” Trump retorted at one point.