Unanswered questions about Trump’s finances after NYT report
A bombshell report by The New York Times last week shed new light on President Trump’s taxes, but there is much that is still unknown about his finances.
The Times examined records that included data from Trump’s tax returns for 2000 to 2017 and reported that the president did not pay any federal income taxes for 11 of those years, in part because he had significant business losses.
But Trump’s tax returns can’t provide a complete picture of his financial situation. They don’t include a person’s net worth and often don’t require the names of any lenders.
The newspaper’s investigation did not include data from his 2018 or 2019 tax returns, which could provide information about how his finances have been affected by policies he’s enacted as president.
Here are five questions that remain about Trump’s taxes and finances.
How were Trump’s personal finances affected by his 2017 tax-cut law?
Trump’s signature legislative accomplishment was the GOP package of tax cuts he signed into law in December 2017. Most of the tax-code changes in the law took effect the following year.
The law lowered tax rates for both individuals and businesses, while making some changes to business tax preferences.
Tax experts said that if Trump had taxable income 2018 and 2019, he could have benefited from provisions such as lower rates and a new deduction for income from non-corporate businesses.
But he also could have been hurt in the near term by limited tax preferences for businesses losses. These provisions were temporarily reversed in the coronavirus relief package Trump signed in late March, known as the CARES Act.
Has Trump taken advantage of business loss provisions in the CARES Act?
The Times reported that Trump claimed and received a $72.9 million refund starting in 2010 because he utilized a provision in a law signed by then-President Obama that allowed businesses to carry back net operating losses to the five previous years amid the Great Recession.
Similarly, the CARES Act allows businesses to carry back losses generated in 2018, 2019 and 2020 for up to five years. Trump’s 2017 tax law had done away with net operating losses carrybacks, and before that law took effect businesses could only carry back losses for up to two years.
The CARES Act also temporarily removed restrictions created by the 2017 tax law on the amount of losses that can offset taxes in any one year.
Democrats have been criticizing the provisions on business losses in the CARES Act for the past several months, arguing they disproportionately help wealthy individuals. They renewed those criticisms in the wake of the Times investigation. A coronavirus relief package that House Democrats passed this past week would roll back the loss provisions in the CARES Act, but the measure is not expected to be taken up by the GOP-controlled Senate.
Republicans have defended the provisions on business losses, arguing they help companies with their cash flow so that businesses don’t have to lay off workers.
Is Trump eligible for a stimulus check?
One of the most prominent provisions in the CARES Act was one that provided for one-time direct payments of up to $1,200 per adult and $500 per child.
Married couples with adjusted gross income (AGI) under $150,000 are eligible for the full amount, and a family of four with two adults and two children are eligible for some type of payment unless their AGI exceeds $218,000. The IRS looks at taxpayers’ 2018 or 2019 returns when determining eligibility.
It’s unclear whether Trump’s AGI would be low enough to qualify him for a stimulus payment. Businesses losses are factored into AGI.
Who are Trump’s creditors?
The Times reported that Trump is personally responsible for $421 million in loans and other debts, and that most of that money is due within the next several years.
A financial disclosure form that Trump filed earlier this year indicates that his creditors include Ladder Capital Finance and Deutsche Bank.
Some Democrats and former intelligence officials have expressed concerns that Trump’s large amount of debt could pose a national security risk.
“Who does he owe the money to? Tell us: who do you owe the money to? And do you owe debt to any foreign nation?” Democratic vice presidential nominee Kamala Harris said Monday on MSNBC.
Steve Cash, a former CIA officer and former chief counsel to Sen. Dianne Feinstein (D-Calif.), said that even if Trump owes money to the banks listed on his financial disclosure forms, that debt could have been sold to another party after the period in which the report covers, or the debt could be guaranteed by a third party.
“I don’t feel comfortable relying on his financial disclosure forms to ascertain to whom he owes money, how much and during what period of time,” he said.
Cash said there are concerns that if Trump owes any money to foreign countries, or if he needs money to pay off his debt, he could take actions that are not in the best interest of the United States.
“He’s susceptible to pressure,” Cash said.
Republicans are pushing back on those raising national security concerns.
A news release from Republicans on the House Ways and Means Committee said “most Americans have debt, and debt should be viewed in the context of one’s assets.” The document points to an Associated Press article that reported the value of Trump’s assets exceed his debt load.
Ways and Means Republicans said in their release that Trump hasn’t been secret about who his creditors are, and that “it’s strange that some news outlets are sensationalizing these numbers.”
How will Trump fare in his audit?
The Times reported that Trump has been subject to a years-long audit as a result of the $72.9 million refund.
The audit has yet to be completed, the Times said, adding that Trump could end up owing the IRS more than $100 million if he receives an adverse ruling.
The Times indicated the business losses that contributed to the refund appear to be related to Trump separating from his Atlantic City casinos.
House Democrats launched an effort in 2019 to obtain Trump’s tax returns, and have said they want the documents to conduct oversight related to how the IRS audits presidents. Ways and Means Committee Chairman Richard Neal (D-Mass.) said in a statement Tuesday that the Times’s story bolsters their case.
“We need to learn why this particular audit process has persisted for so long,” Neal said. “Moreover, now that Mr. Trump is President of the United States and oversees the agency he has fought against for years, we must ensure he is not attempting to interfere in the presidential audit program.”