After all, the 45th US President, who is so obsessed with a glorious entry in the history books, may have already refuted one of the US founding fathers. Benjamin Franklin, co-author of the American Declaration of Independence, said in 1789: “Nothing in this world can be said to be certain except death and taxes.”
But Donald Trump has at least put the tax thing into perspective, as the headline-grabbing revelations in the New York Times about his tax returns from 2000 to 2017 show.
Anyone who, as an alleged multi-billionaire, had to pay only $ 750 in federal income taxes in their first two years as president and no bottom line at all in ten of the past 15 years, may have surprises in store for us about the supposed inevitability of death.
Now the malice is big in Washington, since Trump has been diligently trying to keep the public from viewing these tax documents since the beginning of his presidential election campaign in June 2015. Now they have been presented after all, in the middle of the election campaign.
Tax office paid the hairdresser
Besides, it doesn’t seem that far off with the businessman who likes to be celebrated as one of the largest real estate developers in New York or the whole world.
Because almost all of his companies write deep red numbers and scratch the image of the capable real estate developer who lets one successful deal follow the next.
In the years before his presidency, Trump made money mainly with the extremely successful reality show “The Apprentice” (“You’re fired!”) And the licenses for similar productions abroad. Trump did not become famous and rich as an entrepreneur, but as a TV entertainer who claimed to be a great entrepreneur. Surf tip: All news about the US election can be found in the news ticker from FOCUS Online
Finally, the president’s opponents are enjoying the petitess of the Times revelation, such as the fact that he wrote off $ 70,000 in his tax return for hairdressing services during the years of The Apprentice production. Nine different Trump companies even sold 95,464 dollars for daughter Ivanka’s favorite hairdresser and makeup artist.
A scandal? The democratic challenger Joe Biden will certainly generate attacks from the timely publication in the first presidential duel, which will take place on Tuesday evening (after European time on Wednesday morning at 3 a.m.) in Cleveland, Ohio.
But one Game changer for the race, in which Biden has been in a clear, but by no means unassailable leading, for months, the revelatory story does not represent.
It’s embarrassing for the president, but by no means catastrophic. And there are three reasons.
Rehabilitated on the Russia question?
First: Some had feared, others had hoped that the tax returns would reveal business relations with Russia, for example in the form of loans from Moscow. After all, companies from the Trump empire had filed six bankruptcies between 1991 and 2009.
Had it been proven that he had come out of this malaise with Russian financial injections, this would have provided an explanation for the fact that Trump regularly praised Russian President Vladimir Putin and refused to let his secret services realize that Russian professionals were behind hacking attacks on the Democrats’ servers in the 2016 election campaign .
However, there is no previously unknown detail on business with Russia in the entire documentation. And so the publication of the story almost seems like a rehabilitation of Trump.
Secondly: Nothing in the tax documents indicates any illegal or even criminal behavior by Trump. It is under review by the IRS on an important issue that we shall come back to.
But this is about the possible correction of a refund notice, not about illegal actions by Trump. The allegation of the Democrats that Trump does not like the law is not confirmed here.
The tax comparison with other super-rich
Third: When Hillary Clinton complained during the 2016 election campaign that Trump was constantly looking for tax loopholes and paying too few taxes, the attacked shot back: If he pays little taxes, then this would mark him as “smart”. Most Americans share this view.
The state tries to get the citizens’ money, and in return they try to use all legal possibilities of tax avoidance. So if Trump can sell the hairdresser or his private jet or a private estate, Seven Springs, in New York, which he describes as an “investment” instead of a second home, then the majority of people judge something like this to be intelligent. Should the state just make other laws if it wants to prevent that …
In his narcissistic addiction to superlatives for self-description, Trump once boasted that he probably knew more about tax avoidance than anyone else. That seems to be true for his advisors and lawyers.
While the 0.001 percent of America’s top earners pay an average tax rate of 24.1 percent according to the “New York Times”, Trump came to 0 percent over a number of years. That outrags many people, but presumably even more are impressed. And you think you hear Trump shouting: “You see, I really am the smartest!”
The same applies to the fact that Trump, before his presidency, not only hired his daughter Ivanka and his sons Donald Jr and Eric with generous salaries in his company Trump Organization, but also paid them six-figure “consultant fees” for projects.
Ivanka, for example, received $ 747,622 for hotel buildings in Hawaii and Vancouver, Canada. Yes, this president loves his family. And has again made sure that his taxable income is reduced.
A $ 72.9 million problem – plus interest
So everything easy? That can be said for the election campaign as a whole – but not for the time after his presidency, whether it will end next January or four years later. Trump is likely to be less sleep deprived of the revelation by the “New York Times” than the content of the tax returns (known to him before).
Most importantly, he received a $ 72.9 million tax refund from the IRS on all national income taxes he paid from 2005 to 2008, plus interest. This happened against the background of the reported high losses in his business. Obviously, it involved partner-operated hotels and casinos in Atlantic City, New Jersey.
They were in the red, and Trump withdrew from their board in 2009. He had come to the conclusion that his participation was “worthless” and did not have the potential “to regain value”, said Trump when he withdrew, and that is why he was “leaving” the project.
That is a formulation that the tax authorities appreciate in such a case. However, when withdrawing from a business, an “all or nothing” solution is a prerequisite in order to be able to claim back substantial tax payments. The exiting partner must not receive anything of value. And that is exactly what is controversial: Atlantic City went bankrupt and the other partners founded a new company, in which Trump received five percent, according to the “New York Times”.
If the tax authority IRS, which is reviewing its reimbursement of almost $ 73 million to Trump at the time, comes to the conclusion that the claim did not exist because of this five percent share, Trump would have to repay the money. Including interest, that would be about $ 100 million. Add to this at least $ 300 million in loans that are due soon.
The fear of life after the White House
It can be doubted that Trump has such amounts on the high edge or owns in the form of shares. The golf courses at home and abroad are also indebted and will pedal for a long time in Corona times until they work again to cover needs. So Trump would have to sell real estate.
But many of his buildings are under mortgages. One exception is the Trump Tower in Manhattan, the skyscraper that opened in 1983 and with which the current president established his reputation as a real estate tycoon (after that he didn’t build much anymore, but mainly had the license, its buildings, remodeled or sold to foreign builders for high fees to be referred to as “Trump Tower”).
Does Trump have to sell the prestigious Tower after his presidency ends? Do you even admit that he is not a billionaire, but “only” a multimillionaire who threatens to slide into another bankruptcy?
Given this scenario, it becomes understandable why the President reacted almost panickedly to the possibility of losing the elections, and so far has not made clear whether he would evacuate the White House in such a case. As long as he rules, Trump can keep the tax authorities at bay.