The picture emerging from the New York Times's leak of President Trump's tax filings appears to be of a businessman who defies the laws of economic gravity to sustain a lavish "billionaire" lifestyle and persona. It suggests he shares with former hotelier Leona Helmsley the view that "only the little people pay taxes" while insisting that it is he who is persecuted by the Internal Revenue Service (IRS). "They treat me horribly, the IRS, horribly," he complained recently on Fox News.
The revelations, some five weeks before election day, are likely to prove deeply embarrassing to Trump although his core support base seems ever willing to forgive him almost anything.
Ordinary taxpayers will be bewildered how a self-described 'billionaire' can continue to trade in the face of such losses
Viewed from Ireland, there is a strong sense of deja vu: a taoiseach, Charles Haughey, who managed to live lavishly beyond his apparent means, who survived on huge debt, seemingly never to be repaid, who assiduously avoided tax, and who benefited secretly from generous contributions from sympathetic businessmen. Trump's net income from his fame alone – his 50 per cent share of The Apprentice, and the riches showered on him by the scores wanting to use his name – totalled $427.4 million up to 2018.
Trump paid $750 in federal income taxes in 2016, the year he won the presidency. The next year he paid the same again, while he had paid none at all in 10 of the previous 15 years – largely because he has consistently reported losing hundreds of millions of dollars more than he made. Although the new figures do not cast a clear light on his disputed net wealth, ordinary taxpayers will be bewildered how a self-described “billionaire” can continue to trade in the face of such losses.
It is important to note that these figures are what Trump and his creative accountants have represented to the IRS as the performance of his companies. The “losses” used to reduce tax liabilities are certainly not losses in the traditional meaning of the word, and may indeed conceal very substantial profits hidden by overgenerous tax deductions: depreciation, living expenses – $70,000 for personal hairstyling, consultancy payments to family, family homes treated as property investments. Or apparently fictitious international consultancy payments. The detail remains unclear: did he, for example, write off hush-money paid to porn star Stormy Daniels in the days before the 2016 election?
The picture is also of a businessman-president in a tightening financial vice. To raise cash in recent years Trump has had to rely on personally guaranteed debt, now totalling some $421 million – including a $72.9 million tax refund subject of an IRS audit – most of which is coming due within the next four years. Should he win re-election, lenders may be placed in the unprecedented position of considering whether to foreclose on a sitting president.