What did we learn from Trump’s tax returns?

Following a long legal battle and public debate, House Democrats released six years of former President Trump’s tax returns. Thousands of pages show his personal and business taxes from the years he ran for and served as president. Russ Buettner of The New York Times and former National Taxpayer Advocate Nina Olson joined Lisa Desjardins to discuss the documents.

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  • Judy Woodruff:

    Following a long legal battle and public debate, House Democrats today release six years of former President Donald Trump's federal tax returns, documents totaling thousands of pages.

    Our Lisa Desjardins has more.

  • Lisa Desjardins:

    These are Trump's personal and business taxes from the years he ran for and served as president. Democrats defend the release as part of a probe into whether the IRS delayed auditing him.

    But, in a video, Trump blasted the move as a political hit.

    Donald Trump, Former President of the United States: Although these tax returns contain relatively little information and not information that almost anybody would understand — they're extremely complex — the radical Democrats' behavior is a shame upon the U.S. Congress.

  • Lisa Desjardins:

    What information did we learn today?

    To discuss, I'm joined by Russ Buettner of The New York Times and Nina Olson, the former national taxpayer advocate.

    Russ, let me start with you.

    You have looked through these. You have been poring over them all day. We already knew a bit about the bottom line here. The committee last week released these total taxes that the president paid as president. Former President Trump paid from anywhere from a million dollars to nothing in taxes while in office.

    But, Russ, tell us, how much more do these documents today tell us about the former president?

  • Russ Buettner, The New York Times:

    Well, I think what they do is, they provide sort of a continuum from reporting we had done previously when we obtained 20 years of his tax returns a couple of years ago.

    And you see more of the same, that the businesses that he runs generally report massive losses, tens of millions of dollars a year. The businesses that were tied to his entertainment and his licensing operations, they do OK. There's no expense — expenses associated with running those. And it doesn't really require much in the way of business expertise.

    And he continues to benefit from the inheritance from his father. The one big year that he had in here, 2018, he reported a $24 million positive taxable income. That was the first time in a decade he'd reported a positive taxable income. But underlying that was the sale of $26 million worth of assets he had inherited from his father. So that's what made what was actually a typical year for him, a money-losing year, look like a winning year, was again his inheritance when he is a 70-plus-year-old man sitting in the White House.

  • Lisa Desjardins:

    Nina, among the reasons we're looking at this, of course, is, he is a candidate again for president.

    And one thing I note you noticed in these pages was the sheer number of entities that Mr. Trump has set up as part of his business. You can look here, hundreds of them, more than through 400 listed in 2015.

    How unusual is that? And, overall, how unusual are these returns for a multimillionaire?

  • Nina Olson, Former National Taxpayer Advocate, Internal Revenue Service:

    Well I think that for real estate, there's a reason to have maybe multiple entities to hold the asset than to hold management to hold — if you're doing hotel management, you might have an entity doing reservations.

    What's fascinating about these are that — the breadth of them, and that they cover many, many countries. And so when you have someone who's the president of the United States with holdings in all those countries, that's something that is maybe concerning from a national security issue.

    I think that these are maybe not on the scale of 400 different pass-throughs. But, generally, wealthy people will have a number of pass-through entities associated with them. But these are very, very many.

  • Lisa Desjardins:

    Nina, of course, the big question we keep coming back to, there's a public debate over, how does someone like Donald Trump pay zero in taxes during some years?

    What did you learn from these documents? And what do you think this says about our overall tax system?

  • Nina Olson:

    Yes, what you really see is the role of carried back — net operating losses that are carried forward for years, charitable contribution deductions that can't be taken in a given year and eat up all your income, and then you can carry it back or carry it forward.

    The Trump hotel had a rehabilitation credit that was carried back a year and can go forward for 20. And what that does — what's really interesting is that Congress back in 1967 tried to deal with the fact that there were millionaires that had not paid any taxes, and they created the Alternative Minimum Tax.

    And, in many of these years, practically every single one of them, the former president was hit with the Alternative Minimum Tax, because it means, if you use all these tracks preferences, you may be able to eliminate your taxes. And so they make you add things back in, but, still, other credits ate away and offset even the Alternative Minimum Tax.

    And that's clearly something Congress needs to look at.

  • Lisa Desjardins:

    Russ, I wonder what you think about you have learned about our tax system in the modern age from this.

  • Russ Buettner:

    Well, I think what you're saying is a good point, that there are ways that wealthy people with a lot of assets and good accountants can get out of paying taxes.

    I think one of the big ones that Donald Trump is uniquely positioned to benefit from is the ability to have businesses that are losing money and to use that loss to write off your income tax, to reduce your income taxes on something like a job on television. His job on television had no expenses associated with it at all. He just showed up and he was filmed and edited to look like he looked.

    He made some years $20 million from that, $200 million just from being on television. And he was able to use the losses from his golf courses and his hotels to reduce that taxable income. That's not something that's widely available to most of us.

    And I — Nina mentioned some of the charitable deductions. That's another case. He bought some land. He tried to develop it. He couldn't develop it. He failed. But then he placed a valuation it with a credible appraiser and a credible accountant that said it was worth $21 million. It made it sound like it could be developed. And it couldn't.

    The IRS, after some pressure, decided to look at that. And they have now decided it's worth somewhere between zero and $8 million as a tax write-off. Those are things that most people couldn't find a way to do that can reduce your income tax burden down to zero.

  • Lisa Desjardins:

    Nina, just in 30 seconds, this was unprecedented.

    What do you make of the idea of a House committee releasing the taxes of any individual?

  • Nina Olson:

    Well, I'm very worried that this becomes a pattern in the future. The confidentiality of tax returns is very important in getting people to continue to file their tax returns with the government.

    On the other hand, this — these tax returns are a road map to what's wrong with our tax system and what we need to reform that you might not get from some abstract discussion.

  • Lisa Desjardins:

    Nina Olson and Russ Buettner, thank you so much for helping us. Good luck reading through these.

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