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How Donald Trump got away with paying $0 tax for years

Jessica Yun
·4-min read
President Donald Trump speaks during his, 'The Great American Comeback Rally', at Cecil Airport on September 24, 2020 in Jacksonville, Florida. (Photo by Joe Raedle/Getty Images)
President Donald Trump speaks during his, 'The Great American Comeback Rally', at Cecil Airport on September 24, 2020 in Jacksonville, Florida. (Photo by Joe Raedle/Getty Images)

US President Donald Trump paid only US$750 in the year he became president, and the year after that paid the same amount, the New York Times has revealed.

And because he was losing more money than he was making, he paid taxes only five years out of 15.

The New York Times obtained tax return documents relating to Trump and hundreds of companies he owns, stretching from 2000 to 2017 and specifically in the first two years of office.

In the years including and between 2011 and 2015, Trump didn’t pay anything in tax.

Contrary to Trump’s assertion in 2018 that he made at least US $434.9 million, tax records show he actually lost $47.4 million.

And most of the centrepieces in Trump’s business empire, from his golf courses to his hotel in Washington, are actually losing millions, if not tens of millions in US dollars every year, the Times reported.

The tax records also show the extent of Trump’s conflicts of interest, with many of his properties and resorts used by lobbyists, foreign officials and others seeking access to Trump.

In his first two years in the White House, Trump earned US $73 million from revenue abroad.

Often, the taxes he paid overseas was much higher than the ones he paid in his home country: where he paid US$750 to the US government in 2017, he or his company paid nearly US$15,600 to Panama; US$145,400 to India; and US$156,824 in the Philippines.

The meagre sum of Trump’s tax paid is similar to former US President Richard Nixon, who paid US$792.81 in 1970. He went on to set the precedent for future presidents and presidential candidates, who would make their tax returns public.

So how did Trump manage to avoid tax?

The US President has hundreds of businesses in his name and is reportedly worth US$2.5 billion, according to Forbes.

So how did he manage to pay zero tax in 10 of 15 years?

It’s because losses recorded by businesses owned and run in his name largely absolves him of paying federal income taxes on other deals and investments, such as the US$600 million from ‘The Apprentice’, a TV show where contestants vied for a job with Trump.

“That equation is a key element of the alchemy of Mr. Trump’s finances: using the proceeds of his celebrity to purchase and prop up risky businesses, then wielding their losses to avoid taxes,” the Times report stated.

Basically, Trump is losing a lot of money – but he manages to get around US tax laws by carrying forward leftover losses to reduce taxes in subsequent years.

Not only did Trump avoid paying tax most years, in 2010 he claimed a tax refund of US $72.9 million.

In the early 1990s, when his business empire nearly collapsed and he lost $1 billion, he was able to leverage tax deductions for the next 18 years.

His golf courses have lost him US$315.6 million since 2000, while his real estate services company Trump Corporation has lost $134 million in the last two decades.

Trump’s debt bill is piling up

Trump also has a track record of snubbing lenders: the tax records reveal he hasn’t paid back $287 million of what he owes since 2010.

While the tax records identify debts, it often doesn't identify lenders, the Times reported.

And there is more than US $300 million in outstanding loans that will be due within the next four years that Trump will have to cough up for.

The tax records also show the extent of Trump’s conflicts of interest, with many of his properties and resorts used by lobbyists, foreign officials and others seeking access to Trump.

In his first two years in the White House, Trump earned US $73 million from revenue abroad.

Often, the taxes he paid overseas was much higher than the ones he paid in his home country: where he paid US$750 to the US government in 2017, he or his company paid nearly US$15,600 to Panama; US$145,400 to India; and US$156,824 in the Philippines.

The meagre sum of Trump’s tax paid is similar to former US President Richard Nixon, who paid US$792.81 in 1970. He went on to set the precedent for future presidents and presidential candidates, who would make their tax returns public.

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