President Trump claims ordinary people “don’t care at all” that he’s the first chief executive in more than 40 years not to release his tax returns. But a January Washington Post-ABC News poll found three quarters (74%) of Americans say Trump should release his tax returns. That includes a majority (53%) of Republicans.
This broad-based public demand makes sense. There are at least three important questions that can only be answered by the release of President Trump’s tax returns.
First, does Trump contribute any taxes to the nation he leads? We already know that he paid zero, or close to zero, federal income taxes in at least five of the past 40 years. We also know that he declared a nearly billion dollar loss in the 1990s that could have wiped out all his federal income tax obligations for up to 18 years. He’s proudly declared that not paying taxes “makes me smart.”
There’s good reason to believe President Trump has paid no taxes for years or even decades. His tax-obliterating billion-dollar loss from the ‘90s is the kind of tax dodge readily available to real estate investors like Trump. Through that and other special breaks—such as depreciation, exemption from “at-risk” rules, and “like-kind exchanges”—real estate tycoons can delay, shrink or completely eliminate their federal tax bills.
Second, what are Trump’s foreign entanglements? Our president should be working only for us—not for his own enrichment through deals with offshore partners closely tied to foreign leaders. One ethics expert has noted that many of the foreign businesses with which Trump has struck deals are connected to “unfriendly governments.” Such deals could conflict with our national security goals.
The biggest concern is Russia. Trump’s son has said his father’s real estate business sees “a lot of money pouring in from Russia.” A Russian-American trade promoter who has supported Trump claims that our new president has done “hundreds of millions of dollars” of business with Russian investors.
A veteran U.S. senator, Ron Wyden (D-OR), has asked the Senate Intelligence Committee to investigate Trump’s business ties to Russia as part of its larger probe of Russian meddling in our elections.
Trump’s tax returns might reveal how indebted he is to foreign investors—and how much his ties undermine American national interests.
Finally, how much would President Trump personally benefit from his proposed tax overhaul? During the campaign, Trump proposed a $6.2 trillion tax giveaway heavily slanted towards rich people like him: 47% of the tax cuts go to the top 1% of households. The top 0.1%—people like Trump—would receive an average tax cut of more than $1 million a year, while average middle-class families making about $50,000 a year would get just $1 a day.
Three parts of his tax plan in particular would be financial bonanzas for Trump and his family.
He would eliminate the Alternative Minimum Tax (AMT), which prevents rich taxpayers like Trump from exploiting excessive tax breaks. Without the AMT, Trump would have paid just a 3% tax rate in 2005, according to a portion of that year’s return recently leaked to the media.
He would cut the tax rate by up to 60% on a type of business he uses extensively, the so-called “pass-through”. Pass-through owners pay their business taxes on their personal returns at individual rates, which for rich taxpayers like Trump can be as high as 40%. Trump would cut the top tax rate to just 15% (20% for undefined larger entities). The president is sole or partial owner of over 500 pass-through businesses, and so could save millions of dollars every year from what’s been rightly dubbed the “Trump Loophole.”
He would abolish the estate tax, our nation’s only tax on inherited wealth, paid exclusively by the richest one of every 500 families. If Trump has as much money as he claims—which could be more accurately deduced from his tax returns—his heirs could wind up billions of dollars richer from abolishing the estate tax .
In Washington, D.C., and cities throughout the country, tens of thousands will be marching April 15 to demand answers to these questions. The first answer is for President Trump to release his tax returns.
Op-ed originally published on The Huffington Post by Frank Clemente, executive director, Americans for Tax Fairness, April 10, 2017