5 Things We Still Don’t Know about Trump’s Tax Returns
The President’s 2005 1040 tax form, leaked to investigative reporter David Cay Johnston and televised on Rachel Maddow’s show on MSNBC, showed that the real estate mogul turned President paid $38 million in taxes on $150 million in income, figures confirmed by the White House.
This is the second time someone has leaked details from Trump’s tax returns to the media. In October 2016, the New York Times obtained his 1995 returns, which showed he claimed a $916 million loss that could have prevented him from paying income tax for up to 18 years.
Still, there are a lot of gaping holes left when it comes to public knowledge of Trump’s tax returns.
Here are some outstanding questions we still have
Where did his income come from?
The documents released Tuesday showed how much income tax Trump paid, but they did not reveal the sources of this income. These sources of income are key to determining potential conflicts of interest, or even potential violations of the Constitution’s emolument clause, which prohibits anyone in office accepting any sort of gift from a foreign entity.
A “We the People” petition posted on the White House website that has over 1 million signatures calls on Trump to release all of his returns for precisely that reason.
“The unprecedented economic conflicts of this administration need to be visible to the American people, including any pertinent documentation which can reveal the foreign influences and financial interests which may put Donald Trump in conflict with the emoluments clause of the Constitution,” the petition states.
Trump’s decision to release all of his returns could provide these answers, but they could also raise more questions.
“Even if he were to release everything there would still be questions,” said Alex Raskolnikov, a Professor of tax law at Columbia Law School.
What was his income tax in other years?
We don’t know the answer, because we only have tax information from two years. We know that in 1995 he filed a $916 million loss that could have prevented him from paying income tax for 18 years. But in that decade, did he ever pay income tax?
We also don’t know if his income increased or decreased after 2005, and what his income was in 2015, the year he announced his run for the Presidency.
There is information about Trump’s tax payments before 1995; As the New York Times reports, Trump did not pay federal income tax in 1978, 1979, 1984, 1991 and 1993.
How would Trump’s tax proposals affect his own taxes?
The majority of Trump’s tax payments in 2005 — $31 million out of the total $38 million he paid — were from the alternative minimum tax, designed to ensure those on the upper end of the income spectrum are still paying even if they received a lot of deductions. (The tax came about after 1966, when it was revealed that 155 wealthy taxpayers hadn’t paid income tax in 1966).
But Trump wants to abolish the alternative minimum tax entirely, as noted in the policy prescriptions for tax reform on his campaign website.
Based on his 2005 return, this policy would benefit him substantially; Trump only paid $5.3 million in regular income tax, so he would have saved himself over $30 million. But since he hasn’t released any other returns, we don’t know much he has paid from the alternative minimum tax overall.
Who leaked the returns?
Both the 1995 and 2005 tax documents were sent specifically to reporters, Susanne Craig of the New York Times, and David Cay Johnston, currently editor and founder of DCReport.org.
In both instances, the documents appeared to be personal copies. The documents leaked last night were labeled “client copy.”
Johnston speculated on Rachel Maddow’s show that Trump himself could have leaked it, solely to show there was no bombshell.
“Let me point out, It’s entirely possible that Donald sent this to me. Donald Trump has, over the years, leaked all sorts of things.” he told Maddow. “Donald has a long history of leaking material about himself when he thinks its in his interest.”
The tax returns could also have come from a member of Trump’s family, his accountant, a bank which required the documents for a loan application or an attorney involved in legal proceedings which touched on his finances.
Will Trump ever release his other returns?
Trump’s unwillingness to release his tax returns was a big deal in the first place because it was such a break with precedent — he was the first candidate in four decades who hadn’t released returns. And because it was such a precedent, speculation swirled that he was hiding something, which his opponent seized on.
“Donald Trump is hiding behind fake excuses and backtracking on his previous promises to release his tax returns,” Hillary Clinton said in the statement accompanying the release of her own 2015 tax returns. “He has failed to provide the public with the most basic financial information disclosed by every major candidate in the last 40 years. What is he trying to hide?”
Although Trump initially cited the audit as the reason for not releasing his returns (even though the IRS said it was fine to do so) senior adviser Kellyanne Conway said in January that he would not release them at all.
“We litigated this all through the election,” Conway said on ABC News’ This Week. People didn’t care. They voted for him. Most Americans are very focused on what their tax returns will look like while President Trump is in office, not what his look like.”