President Trump has gone to and is going to great lengths to avoid sharing the tax returns he once promised to make public, and now we know at least part of the reason why.
It’s merely the latest revelation that cuts to the core of the myth of Trump.
The New York Times reported on Tuesday that it had gotten its hands on 10 years of Trump’s tax information, from 1985 to 1994. The big takeaway is that it shows massive and consistent losses, totaling $1.17 billion over the entire span.
Needless to say, that’s not the norm. And it was massive, even relative to fellow very-wealthy people. Look at this section:
In fact, year after year, Mr. Trump appears to have lost more money than nearly any other individual American taxpayer, The Times found when it compared his results with detailed information the I.R.S. compiles on an annual sampling of high-income earners. His core business losses in 1990 and 1991 — more than $250 million each year — were more than double those of the nearest taxpayers in the I.R.S. information for those years.
“More than double those of the nearest taxpayers."
The Times did not get its hand on Trump’s entire tax returns for these years, so it wasn’t able to conduct in-depth reviews of all the attached schedules. But the top-line numbers are notable — especially given that the Times was able to compare them with the same figures for a pool of one-third of high-income U.S. taxpayers whose figures the IRS makes public (without revealing people’s names). That allowed for the comparison that showed Trump’s losses were nearly unmatched.
The report clearly got Trump’s attention, and he suggested in a pair of tweets Wednesday morning that he was merely gaming the system and that his losses were “non monetary":
“Real estate developers in the 1980’s & 1990’s, more than 30 years ago, were entitled to massive write offs and depreciation which would, if one was actively building, show losses and tax losses in almost all cases,” Trump said. He added: “You always wanted to show losses for tax purposes....almost all real estate developers did - and often re-negotiate with banks, it was sport.”
There are some grains of truth to this, as Philip Bump explained three years ago. Real estate developers are able to use depreciation to game the system, to some degree, and avoid paying taxes. Trump reportedly avoided federal income taxes for eight of the 10 years obtained by the Times.
But the Times reports that only a fraction of those losses were the result of depreciation. That suggests this was indeed about Trump’s businesses struggling badly — even as he was authoring “The Art of the Deal,” which was released in 1987.
And on that front, it’s merely the latest example a new revelation undercutting Trump’s carefully crafted brand as a master businessman.
The Washington Post reported in March on how Trump inflated his wealth to banks with unorthodox “Statements of Financial Condition.” These statements inflated and invented information about his wealth and holdings, while inoculating Trump with lengthy disclaimers.
The same documents showed Trump in 2013 suddenly added a new huge chunk to his net worth: A cool $4 billion for his “brand value” — a number apparently plucked from thin air. The next year this was listed as $3.3 billion for “licensing deals and brand value.” So when Trump claimed early in the 2016 campaign that he was worth more than “TEN BILLION DOLLARS," a large portion of that was him assigning value to himself. (People charged with estimating wealth don’t assign him near so much value, often putting his net worth around $3 billion or $4 billion.)
Maybe the biggest revelation on this front, though, came from the same reporters who broke Tuesday’s story. In October, the Times’s David Barstow, Susanne Craig and Russ Buettner detailed an extensive investigation of how Fred Trump’s wealth had been passed to his children, which included Donald Trump. The Times concluded that the methods included “instances of outright fraud, that greatly increased the fortune he received from his parents.”
Suddenly, it was clear that the man who suggested he built a $10 billion empire on a $1 million loan from his father — "I had to pay him back with interest!” Trump assured — had a much bigger head start than that. He made the equivalent of $200,000 per year by the age of 3.
None of this disproves the idea that Trump is wealthy. But it does severely diminish the story Trump tells about how he became wealthy, how wealthy he is, and how successful he has been in the business world. Trump fashions himself the self-made master negotiator, but there are now a growing number of data points suggesting he was, in fact, a guy given a massive head start who repeatedly stumbled. And it wasn’t just the failures of his casinos, his airline and various other Trump-branded ventures; it was a steady stream of other failures that Trump has papered over throughout his adult life — and more recently during his time as a politician and president.
Trump in many ways built his career by suggesting that the life story of his political nemesis, Barack Obama, was a fraud. It was the birther stuff. It was Trump suggesting Obama had gotten affirmative action to get into Harvard.
More and more though, it’s Trump’s own personal biography that looks badly embellished and overstated. And that’s got to be at least part of the reason he doesn’t want us to see those tax returns.