TRUMP PAID 24% IN TAXES IN 2005
He made $150 million in income that year, according to his first federal filings to be made public.
WASHINGTON — President Trump paid more than $35 million in federal income taxes in 2005 on $150 million in income, an effective rate of 24%, according to the first two pages of a tax return released late Tuesday that offered a rare glimpse into his financial dealings.
The documents, though incomplete and more than a decade old, nonetheless amount to the first time any of Trump’s federal returns have been disclosed. Trump’s refusal to release his returns during the campaign broke with decades of practice for presidential candidates, raising questions about the types of tax advantages Trump used and the sources of his income.
The release, during prime time on MSNBC’s “Rachel Maddow Show,” created the type of realitytelevision hype that often accompanies Trump. David Cay Johnston, a Pulitzer Prize-winning reporter, said he received the returns in the mail only days ago from an anonymous sender.
Maddow played them for maximum drama, building a fever of suspense on Twitter in the lead-up to her show and then spending 20 minutes speculating about Trump’s financial dealings before revealing the figures in the documents and interviewing Johnston.
The White House released a statement before the program aired, verifying the top-line figures while chastising the “dishonest media” for publishing them, claiming the law was broken in the process.
In October, amid the heat of the presidential campaign, the New York Times reported on portions of Trump’s 1995 state returns, which showed that he took a write-down of nearly $1 billion. That story said Trump might have been able to use the write-down to avoid paying income taxes for two decades.
The documents revealed Tuesday show he did pay at least one year’s worth of income taxes a decade later, although it also showed that he was able to use a loss to reduce his taxable income by more than $100 million. The newly revealed return
did not disclose the nature of the loss.
Trump blamed an audit for his failure to disclose his tax returns during the campaign. He had said he would furnish them when the audit was complete, but presidents are automatically audited, suggesting he will never release them. But in confirming some of their contents Tuesday, the White House may face renewed pressure to release more returns.
Trump’s tax bill would have been much smaller — $5.3 million, or less than 4% — if he were not forced under tax law to pay the so-called alternative minimum tax.
Johnston, an expert on the tax code, noted on Maddow’s show that Trump has supported eliminating the alternative minimum tax and noted that his tax rate would have been equal to someone earning less than $33,000 a year without it.
Trump’s effective rate of about 24% still fell short of the top bracket of 35% paid on regular income that year and 28% on the alternative minimum.
Because the full tax return was not revealed, it is unclear how Trump made his income that year, or any other. The president has been inundated with questions about his ties to Russia and other foreign governments, and his tax records might provide relevant information.
Trump would have made at least some of his income from “The Apprentice” in 2005, the second year the hit show was in production. He was also involved in a major real estate sale that year. He and his partners sold the Riverside South development on Manhattan’s Upper West Side for $1.76 billion. Much of the proceeds were rolled into the purchase of an office building in midtown Manhattan and another in downtown San Francisco.
His tax form shows that he reported about $32 million in capital gains that year, or about 20% of his total income.
The White House, in confirming the authenticity of Johnston’s document in a statement, included Trump’s payroll taxes to bring the total paid to $38 million. The White House statement called Maddow “desperate for ratings” and accused her of violating a law by publishing the documents.
“Before being elected president, Mr. Trump was one of the most successful businessmen in the world with a responsibility to his company, his family and his employees to pay no more tax than legally required,” a White House official, who would not be named discussing Trump’s personal income, said in a statement.
“That being said, Mr. Trump paid $38 million even after taking into account large-scale depreciation for construction, on an income of more than $150 million, as well as paying tens of millions of dollars in other taxes such as sales and excise taxes and employment taxes, and this illegally published return proves just that.”
Trump’s tax document was marked “client copy,” which indicates it was not leaked by the Internal Revenue Service but came from some other source.
Federal law makes it illegal “willfully to print or publish in any manner not provided by law any ... return or return information” that is “disclosed in a manner unauthorized” by law. But the Supreme Court has held in the past that news organizations are protected by the 1st Amendment when publishing truthful material on a matter of “public importance.”