Wednesday, March 15, 2017

Taxation And Misrepresentation

So somebody dropped off two pages of Donald Trump's 2005 tax returns in reporter David Cay Johnston's mailbox last week, and yesterday he went on Rachel Maddow to talk about the story.

In 2005, Donald J. Trump married model Melanija Knavs, his third wife. That year, the real-estate mogul and newly minted TV star earned $153 million dollars, about $3 million a week. That’s far more than all but a tiny sliver of the U.S. population.

The newlyweds paid $36.6 million of that year’s take in federal income taxes, a rate of 24%, putting the Trumps in much the same tax league as any other two-earner professional couple making about $400,000 a year.

Or to put it another way, Donald Trump was paid that year like a member of the 0.001%, but he paid taxes like the 99%. And by at least one measure, he paid like the bottom 50%.

DCReport has obtained Donald Trump’s Form 1040 federal tax return for 2005. There’s no smoking gun there, no obvious evasion, but clearly some bending of the tax laws almost to the breaking point. The document offers a rare glimpse at how a super wealthy couple can manipulate and manage our complex tax laws to reduce their obligations far below rates paid by typical salaried professionals or even blue-collar wage earners.

The White House confirmed the authenticity of the tax returns. “Despite this substantial income figure and tax paid,” the White House said in a statement, “the dishonest media can continue to make this part of their agenda, while the President will focus on his, which includes tax reform that will benefit all Americans.”

Trump’s lawyers have said that any audit of the 2005 tax return is now closed. However, the president has made it clear, since he took office, that he has no intention of making public his tax returns.

When Maddow tweeted about the tax return story last evening to preview her show, the White House responded within minutes that Trump had paid $36.5 million in taxes on $153 million in income in 2005.

In other words, instead of a series of ranting tweets from Trump himself or a garbage statement from a confused spokesperson with no credibility, this notoriously sloppy and disorganized White House had a response prepared and ready.

They knew this story was coming.

The question is why this is so important to the Trump regime.

Now, the story itself is something of a letdown, as there's no smoking gun.  But we now know Trump certainly isn't a billionaire as he's claimed. We now know in 2005 most of his income wasn't recurring, but from the sale of distressed real estate holdings.  We now know that the Alternative Minimum Tax nailed Trump to the wall in 2005, otherwise he would have paid only around $5 million in taxes instead of $36.5 million, explaining why he's campaigned to eliminate the AMT entirely.

To make the mystery more interesting, the ranting Trump tweets came this morning, with Trump accusing the Pulitzer-winning Johnston of being a "nobody" and the tax returns of being fake...12 hours after his own White House staff confirmed them as true last night to reporters.

I'm not sure 100% what's going on here.  I have some theories: Trump released them himself and is trolling the media, Bannon did this to distract the country from Trumpcare, a Trump staffer caught wind and leaked them out of spite, Donald Jr. thinks he's a supervillain now and tested the waters, or somebody else has all the tax returns and is slow-dripping the feed.

All I know is we know more than we did yesterday about Trump's finances.

I'm betting we find out a lot more.

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