“Reporting Nothing At All”: Donald Trump Bragged To Press He Made A Fortune In 1984, Told The IRS It Was Zero
In 1984, Donald Trump constantly bragged to the press about how much cash he was raking in. That same year, as David Cay Johnston exclusively reported in The Daily Beast, he told the IRS he had made nothing at all.
Trump deducted $626,264 as expenses on his 1984 federal income tax return, and $619,227 on his New York City return. On both forms, he claimed no income.
It was a pivotal year for the 37-year-old magnate on the make, one in which he was celebrating the opening of his seminal Trump Tower, closing a casino-hotel deal in then-booming Atlantic City and angling to topple the NFL with his ill-fated purchase of the United States Football League’s New Jersey Generals. He’d made himself a near-daily figure in New York news and gossip pages, often depicted as an egomaniacal wild man who shot from the hip and raked in the bucks as he shoved and nudged his way to the top of the real-estate world.
Young Trump wasn’t shy about talking up his income, either.
In a GQ profile that May, written by Graydon Carter, Trump plugged a hotel deal in which he partnered with Hyatt to build a new Manhattan hotel on land Trump just leased—with the help of Equitable Life Assurance Society.
“He and Equitable had split their first round of profits before any of the tenants had even moved in,” Carter wrote.
“So we have about a $277 million sellout,” says Trump, “just for the upper half of the building. And then we own the lower half for nothing.” The partnership, unencumbered by mortgages, now collects the rents from thirteen floors of office space at $50 a square foot and the six levels of retail space at $150 to $450 a square foot. “It’s a crazy deal,” says Trump. “It’s better than working.”
On top of the hotel and the football team and the constant press clips, Trump also completed an A.C. casino-hotel deal with Harrah’s that was reportedly going to bring him millions in annual income.
“Just as the name Donald Trump is well-known to most New Yorkers, the name is now becoming recognized throughout the country,” William Geist wrote in a 1984 New York Times profile. “He is fast becoming one of the nation’s wealthiest entrepreneurs, able to buy practically anything he wants. He controls a company with assets estimated—some say conservatively estimated—$1 billion, and casino-industry analysts say his half interest in Harrah’s may provide him with $40 million to $50 million more in annual income.”
Harrah’s eventually agreed to give Trump $220 million to build the project and offer him half the profits it made.
One more, remarkable source of income for Trump that year: New York Giants great Lawrence Taylor.
The linebacker had struck a secret deal with Trump, banking a million-dollar interest-free loan in exchange for agreeing to join the Generals when his contract with the Giants expired. But after the Giants extended and upgraded Taylor’s deal, he had to repay the million, the interest he’d collected on it and $750,000 more on top to the mogul to get Trump to agree to return Taylor’s option to the Giants.
Wrote the Times: “Trump, meanwhile, was described by an associate as “delighted” to have been able to keep his team’s name in the public eye while also getting a substantial profit.”
Again, this in a year where Trump appears to have claimed no income.
Trump, of course, could answer all such questions by releasing his full tax returns. Instead, he’s broken with a tradition kept to by every major party presidential candidate in modern American history and prevented the public from judging his financial circumstance for itself until an alleged audit of his taxes since 2012 is completed. Even if such an audit is in fact underway, there is no law, rule, or even tradition that would preclude him from releasing the documents.
And there’s nothing at all to stop Trump from releasing his taxes from 1980 through 2011—and clearing up the question of how he can brag about so much income while, apparently, reporting none at all.
By: Gideon Resnick, The Daily Beast, June 17, 2016
“Trump’s Not Running For Vice President”: Trump’s New Line; Tax Returns From Thee, Not From Me
About four years ago at this time, Mitt Romney ran into a bit of trouble. He insisted on keeping his tax returns hidden, which was a problem made more acute when the Republican asked potential running mates to turn over their returns from the previous 10 years.
Apparently, Team Romney believed a thorough examination of a national candidate’s record meant a close review of tax materials – even while Romney said American voters couldn’t make a comparable examination of his own record.
The more things change, the more they stay the same.
Candidates hoping to earn a spot as Donald Trump’s running mate are reportedly expected to submit their tax returns to the campaign, even though the presumptive GOP nominee has said he has no immediate plans to make his own taxes public.
NBC’s Katy Tur reported Wednesday that all vice presidential hopefuls would be required to submit their returns as a standard part of the vetting process.
When NBC’s Katy Tur asked a Trump campaign source about the apparent hypocrisy, the source responded, “Trump’s not running for vice president.”
That’s cute, I suppose, but it only reinforces the absurdity of the candidate’s posture. The idea that disclosure and transparency requirements should be tougher for a vice presidential candidate than a presidential candidate is tough to defend.
Making matters worse, with each passing day, new questions arise about Trump’s finances. USA Today reported this morning that a fresh analysis found Trump’s businesses “have been involved in at least 100 lawsuits and other disputes related to unpaid taxes or how much tax his businesses owe.”
Trump’s companies have been engaged in battles over taxes almost every year from the late 1980s until as recently as March, the analysis of court cases, property records, and other documents across the country shows. At least five Trump companies were issued warrants totaling more than $13,000 for late or unpaid taxes in New York state just since Trump declared his candidacy in June 2015, according to state records.
This spring, as Trump flew to campaign rallies around the country aboard his trademark private jet, the state of New York filed a tax warrant to try to collect $8,578 in unpaid taxes from the Trump-owned company that owns the Boeing 757. The company has since paid that tax bill.
It makes it that much more difficult for the candidate and his team to suggest his tax documents are a meaningless distraction.
Hillary Clinton’s campaign, meanwhile, released a new video yesterday, hoping to maintain interest in the story, and speculating about the kinds of things Trump may be hiding while keeping his tax returns under wraps.
By: Steve Benen, The Maddow Blog, May 19, 2016
“Dear IRS: Orangutan Hairs Are Legit!”: Trump’s Unique Mane Has Become A Key Visual Emblem Of His Business Brand
Dear Commissioner,
As you know, our client is dying to share his tax returns with American voters before the upcoming presidential election. However, he has prudently chosen to wait until your agency has completed its unfair audit of his Form 1040 filings.
Mr. Trump is offended and outraged that your inspectors have questioned several business expenses that he listed under Part V of Schedule C. We will address each of these disputed issues forthwith:
1. “Miscellaneous Hair Harvesting Fees — $767,000.”
Mr. Trump’s unique mane has become a key visual emblem of his business brand. All costs associated with the maintenance and enhancement of his hair should be deductible.
The silky orange strands on Mr. Trump’s head come from the armpits of Pongo pygmaeus, an orangutan found only in the rain forests of Borneo. Authorities there are protective of these rare animals, and have imposed upon Mr. Trump a fee of $1,000 for each harvested hair.
Mr. Trump asserts that this is a legitimate business expense, and it should not be challenged by the IRS.
2. “Orangutan Pacification Program — $315,400.”
Borneo’s orangutans are mostly peaceful creatures, but when provoked they are capable of attacking human intruders. Therefore, removing armpit hairs from an adult specimen can be both challenging and dangerous.
When Mr. Trump heard that orangutans can be soothed by classical music, he immediately arranged to fly a string quartet from the New York Philharmonic Orchestra to the jungle of Borneo.
There the musicians performed Schubert’s famous String Quartet No. 14 in D minor, also known as “Death and the Maiden,” which soon caused the orangutans to fall into a deep sleep. During that time, extraction experts hired by Mr. Trump successfully removed approximately 767 hairs from several adult male and female orangutans.
The high cost of this project was borne entirely by Mr. Trump. He used his personal aircraft to transport the string quartet to Indonesia and paid full union-scale wages for the musicians’ performance. He also reimbursed them for their malaria shots.
Because no other species of wild primate produces the unusual gossamer hair compatible with Mr. Trump’s image, we contend that the Borneo trip was a legitimate and necessary business expense under the current tax rules.
3. “Replace Damaged Viola (and bow) — $6,223.”
Through no fault of Mr. Trump, one of the juvenile orangutans awakened near the end of the quartet’s performance and went after the viola player. The man escaped unharmed, but his expensive instrument was seized from him and reduced to splinters by the testy young ape.
Mr. Trump considers this loss to be a deductible expense, no different from replacing a tire that blows out on one of his jets.
4. “Solarium Upgrade at Trump Tower — $178,655.”
Because Borneo’s equatorial climate is much warmer and humid than that of midtown Manhattan, Mr. Trump hired a contractor to enlarge and upgrade the solarium and tanning salon in his penthouse.
Without such improvements, which include an orchid-scented humidifier, the orangutan hairs obtained and curated by Mr. Trump would eventually lose their texture, sheen and special ginger hue.
In time, the strands would become brittle and break free from the thermoplastic micro-staples attaching them to Mr. Trump’s scalp. Clearly, the solarium modifications are essential for Mr. Trump to maintain his current appearance, and the growth of his brand.
5. “Personal Grooming Assistance — $322,399.”
As one of the most photographed figures in the world, Mr. Trump is puzzled by your agency’s failure to understand his need for a staff to assist with his daily grooming.
Many movie stars and TV celebrities less important than Mr. Trump employ teams of such assistants. They might not be paid as highly as Mr. Trump’s, but we would argue that the fees paid to his stylists are reasonable considering the challenges they face.
Mr. Trump can’t just walk into a Supercuts for a quick trim. It requires specialized skills to painstakingly comb, layer and shape 767 delicate hairs — and to keep them flawlessly in place for scores of TV interviews and town-hall gatherings. The stylists who work on Mr. Trump earn every penny he pays them, and the IRS has no cause to disallow these expenses on his tax returns.
He is looking forward to a timely completion of your audit, and would hugely appreciate it if you didn’t leak the part about the Borneo trip to any reporters.
By: Carl Hiaasen, Columnist for The Miami Herald; The National Memo, May 17, 2016
“Multigenerational Wealth Is Best Hidden”: What Doesn’t Donald Trump Want You To Know About His Wealth?
This is what Donald Trump’s refusal to release his tax returns says about America. We are a nation that can’t think straight about wealth and class. And Trump knows better than to puncture our delusions.
The American psyche is hyper-attuned to the trinkets of the wealthy: the right car, the right brand of clothes, the right vacation spots. We flatter ourselves with our circumscribed access to these status goods — or perhaps we only dream of that access — but we fail to understand that they do not equate to real wealth.
The very rich are different from you and me. They have something we never will: the power of money. Their money is the kind that doesn’t go away with a divorce, an extended sickness, a dip in the markets or even the death of a high income earner. Theirs is the kind that owns politicians and the laws they make.
Real wealth, the multigenerational kind, is best hidden. And even though a tax return won’t reveal all there is to know, it will reveal enough.
Trump told the Associated Press this week that nothing would be released until the government is through with its audit of him. The next day, Wednesday, he hedged a smidgeon to Fox News, saying he’d like to release the returns before the election. Don’t bet on that happening.
For one thing, if we were able to see how Trump’s fortune is structured and how much tax he pays on it, we would also be able to compute his liability under his proposed changes to the tax code. In other words, we would be able to approximate how much Trump stands to earn for himself and his heirs by pulling the strings of power. Is it any surprise he won’t go there?
Let’s take a closer look at the tax plan that he unveiled last fall. Plenty of experts have already done so.
As part of his populist appeal, Trump envisions simplifying the tax code and dismissing about 73 million households from paying any tax at all (most of those are already not paying). Those families will be able to submit a form to the IRS that says, “I win.” Yes, that is really his plan.
The cuts would lower taxes for people all income levels. But the Tax Foundation, a nonpartisan but right-leaning watchdog group, noted “the biggest winners — in raw dollars and on a percentage basis — would be those in the top 10 percent of filers, particularly those in the top 1 percent.”
The top marginal rate for individuals would drop from 39.6 percent to 25 percent. The corporate rate would drop from 35 percent to 15 percent. He would do away with the estate tax. That adds up a lot of lost revenue — about $10 trillion over a decade, according to the Tax Foundation
Trump claims that the tax cuts would be made up for by closing some loopholes for the wealthy and corporations. But the Tax Foundation crunched the numbers and has deemed this to be wishful thinking. Severe cuts to spending would be necessary to avoid crushing growth in the national debt.
Wishful thinking is Trump’s stock in trade. Indeed, some speculate that another reason why he does not want the public to see his tax return is that his boasted wealth is squishier than he’d like to admit. Trump is notorious for overstating his attributes, and when it comes to his wealth he is especially touchy.
He sued former New York Times reporter Timothy O’Brien over the latter’s book, “TrumpNation: The Art of Being the Donald,” which questioned Trump’s net worth. The book also explored if Trump convinced his siblings to borrow on his behalf from their trust funds to save him from financial ruin in the early 1990s. Trump’s lawsuit against O’Brien was dismissed.
Still, Trump is clearly rich to an extent most Americans cannot imagine. Oddly — and sadly — many tout this as an alluring quality. He’s so rich he can’t be bought, they say. This attitude reveals a pathetic inability to understand plutocracy, and its growing threat to our democracy. Americans continue to be suckered into unrealistic beliefs about their ability to upgrade their social class. Meanwhile, the policies and programs that are necessary to promote middle-class security are toppling one after another.
Donald Trump is not going to share his wealth with you, dear voter, or help you get rich on your own. He can’t. What worked for Trump will not work for you. His trick was the oldest one in the book: Have a rich daddy. And keep it in the family.
By: Mary Sanchez, Opinion-Page Columnist for The Kansas City Star; The National Memo, May 14, 2016
“Did He Pay Anything At All?”: Donald Trump Says He Won’t Release Tax Returns
Months after he said he would release his tax returns, Republican frontrunner Donald Trump has decided that the American public doesn’t need to see how much (or little) he has paid in taxes until after the November elections, marking a shift in the vague promises he previously made to release the records to the public.
He solidified his position in an interview published by the Associated Press today, in which he said that “there’s nothing to learn from them.” Trump has also claimed that he is in the process of being audited by the IRS, and that releasing his returns for the year under audit would be imprudent, despite the agency confirming that being audited doesn’t legally interfere at all with the ability to release one’s tax records.
As far back as October 2015, Trump promised to release his tax documents. “I’m not going to say it, but at some point I’ll release it,” he said at the time. In that same interview, he also said, “I pay as little as possible, I’m very proud to tell you.”
In January, Trump said again that he would release his taxes soon. “We’re working on that now. I have big returns, as you know, and I have everything all approved and very beautiful and we’ll be working that over in the next period of time,” he said. Months later, they still haven’t been released.
Then again on May 8, just days before his announcement that he wouldn’t release his returns, he said, “Sure. If the auditors finish. I’ll do it as fast as the auditors finish.You don’t learn much from tax returns. But I would love to give the tax returns. But I can’t do it until I’m finished with the audit.”
But how little does Trump actually pay in taxes? David Cay Johnston, who spent three decades covering Trump as he moved from one business venture to another, noted that in 1978 and 1979 the businessman had paid exactly $0 in taxes.
He further explained how wealthy Americans like Trump use the tax code to their advantage, writing:
It’s all about tax rules that require you to depreciate, or reduce, the value of buildings over time, even if the market value of the structures is going up. If your depreciation is greater than your traditional income from work and businesses, Congress lets you report negative income. If these paper losses are just a dollar more than traditional income, it wipes out your income taxes for the year.
If Trump’s returns show he has paid no income taxes in some years, that could be a reason he has not yet released details.
Congress says most Americans can deduct no more than $25,000 of real estate depreciation against their income. But if you work two days a week managing real estate and own enough that the depreciation exceeds your salary and other income, Congress lets you live income-tax-free. And for as long as you keep buying buildings and depreciating them, the tax does not come due.
There are numerous reasons why Trump wouldn’t want to release his taxes. First, he has amassed his fortune partly by using tax loopholes that allowed him to effectively pay no income tax for years — possibly up to the present day. More recently, he changed his tune, saying, “I am willing to pay more, and you know what, the wealthy are willing to pay more.” America should be thankful Trump wants to pay more than… whatever he’s currently paying. It could be nothing at all.
Second, the tax returns could show that he has far less money than he claims. This possibility was seized upon by anti-Trump Republicans who have tried to coerce Trump into releasing his returns. During the opening shots of the fight against the racist billionaire’s takeover of the party, Mitt Romney raised the possibility, saying, “Either he’s not anywhere near as wealthy as he says he is, or he hasn’t been paying the kind of taxes we would expect him to pay.”
There is evidence to back up Romney’s claim. Forbes calculated Trump’s worth to be $4.5 billion at most. “Trump has filed statements claiming he’s worth at least $10 billion or, as he put in a press release, TEN BILLION DOLLARS (capitalization his). After interviewing more than 80 sources and devoting unprecedented resources to valuing a single fortune, we’re going with a figure less than half that–$4.5 billion, albeit still the highest figure we’ve ever had for him.”
Even harder to explain is the jump in Trump’s cash-on-hand. The National Review wrote that his organization showed documentation for cash and cash equivalents of $307 million in 2014. This year, that number jumped up to $793 million, sans documentation, making it difficult to believe that he actually has that much money. “I’m running for President,” said Trump in an interview with Forbes. “I’m worth much more than you have me down [for]. I don’t look good, to be honest. I mean, I look better if I’m worth $10 billion than if I’m worth $4 billion.”
Trump’s obstruction has not only served his purposes, but that of his likely rival, Hillary Clinton. During the Democratic debate in Brooklyn last month, she responded to a question about her speech transcripts with a criticism of other presidential candidates, namely Trump, who didn’t release their tax returns.
“There are certain expectations when you run for president,” said Clinton. “This is a new one but I will tell you this, there is a longstanding expectation that everybody running release their tax returns.”
By: Saif Alnuweiri, The National Memo, May 11, 2016
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