Five takeaways from the release of Donald Trumps tax returns

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After a year-long process, former President Donald Trump’s tax returns were released to the public on Friday.

On the way out there are a few takeaways.

Last week, the House Ways and Means Committee voted 24-16 to release six years worth of Trump’s tax returns after a closed-door meeting on Capitol Hill, a major win for Democrats seeking the records. for many years.

On Friday, those documents, consisting of thousands of pages, were finally released after being scrubbed of bank account information and Social Security numbers.

Trump paid no income taxes in 2020 and almost none in other years

Perhaps the main takeaway from the returns, which include not only Trumps individual returns but also those related to his business entities, is how little in federal income taxes the former president paid in a few years.

Trump declared negative income on his federal returns in 2015, 2016, and 2017, with $0 taxable income for each year. Even before the actual documents were released, the Joint Committee on Taxation submitted a report to the ways and means committee that was made public and stated extensively.

Trump only paid $750 in 2016 while he was running for office. The former president paid just $750 in his first year in office. Trump paid no income taxes in 2020, the last year of his presidency. However, in 2018 and 2019, Trump reported income of nearly $30 million, of which the IRS collected just over $1.1 million.

In 2020, the New York Times reported, based on leaked documents from an anonymous source, that Trump had paid no federal income tax in 10 of the past 15 years. Trump and his wife, Melania, were able to pay very little tax because they reported heavy business losses to offset their income.

The IRS failed to properly audit the Trumps taxes

Tax returns filed by a sitting president are, by law, required to be audited by the IRS. Despite accusations from the GOP of obtaining tax returns to harm Trump, Democrats on the committee say they want to make sure the IRS lives up to that responsibility.

Last week, Democrats on the committee announced that the IRS had failed in its duty to properly audit Trump while he was in office. In fact, the inquiry found that the IRS did not audit Trump during the first two years of his presidency and only began checking in 2019.

Committee Chairman Richard Neal (D-MA) said the reason the 2019 returns began to be reviewed was because he began his quest to obtain the documents.

The Committee expects these mandatory audits to be conducted promptly and in accordance with IRS rules. However, our review found that under the previous Administration the program was dormant, Neal said Friday. We know now, the first mandatory audit was opened two years into his presidency. On the same day this Committee requested his return.

The Trump-backed SALT cap has slowed his own finances

The 2017 Tax Cuts and Jobs Act, perhaps Trumps biggest legislative achievement (and the single biggest tax code reform in decades), placed a $10,000 limit on deductions for state and local taxes paid .

Although some parts of the reform, which became known as the Trump tax cuts, reduced the tax burden of former presidents, the cost of SALT cost him.

For example, in 2019 and 2020, Trump paid $8.4 million and $8.5 million in state and local taxes, respectively. Because of the cap, he only deducted $10,000 from the taxes he paid on his federal income tax returns.

The SALT cap generated headlines last year when some Democrats and Republicans from high-tax states tried to change the cap, arguing that it doesn’t just affect the wealthy, although Tax Policy found Center only 3% of middle-income households will pay less. on taxes if the cap is removed.

Foreign bank accounts

An interesting tidbit found in Trumps tax returns is that he reported having a bank account in China from 2015 to 2017. In addition, the former president reported having bank accounts in Ireland and the United Kingdom in the same period of time.

Once 2018 passed, Trump no longer reported accounts in China and Ireland, although he still reported having an account in the UK Prospective tax returns also showed that Trump claimed foreign tax credits for taxes paid to certain businesses in different countries. , according to the Associated Press.

Some of Trump’s political enemies have seized on the revelation given that Trump said during a presidential debate that he believed the account was closed in 2015.

In general, you only have bank accounts in another country if you conduct transactions in that country’s currency. What business is Trump doing in China while he is president? said Daniel Goldman, who served as counsel to Democrats during Trump’s first impeachment and is now a congressman-elect from New York.

GOP backlash

Of course, while Democrats are hoping for a victory, Republicans have bashed the move and issued thinly veiled threats about the precedent it sets.

Democrats have filed an unprecedented decision to unleash a dangerous new political weapon that reaches far beyond the former president, overturning decades of privacy protections for ordinary Americans that have existed since Watergate. , ways and means ranking member Kevin Brady (R-TX) said after the documents were released Friday.

In fact, some Republicans have indicated that once they take over the House next week, they could use the new rule to investigate and release the tax returns of people like President Joe Biden’s son, Hunter Biden, and other targets.

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Rep. Jason Smith (R-MO), one of three congressmen vying to replace the Bradys and lead the committee, released a statement saying the move to release the Trumps’ tax returns gives the incoming GOP majority a clear authority to use these tools to investigate whether President Biden and his family enriched themselves on the Washington Democrats’ agenda.

For his part, Trump rejected Friday’s release and said the move would lead to terrible things for too many people.

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