Donald Trump may have a major tax scandal on his hands, with a October surprise report suggesting that the Republican presidential candidate may have avoided paying any federal income taxes for close to two decades.
The New York Times obtained Trump’s 1995 income tax returns, which showed that the New York real estate mogul declared a $916 million loss — leading to a massive tax deduction, it could have allowed him to skip out on paying income taxes until 2013.
That year’s income tax return showed the carnage from Trump’s Atlantic City casino failures along with the failure of his airline business and his purchase of the Plaza Hotel. All told, it allowed Trump to take a giant deduction.
As the New York Times reported, it could be likely that Donald Trump avoided paying taxes for a very long time because of his business failures.
“Tax experts hired by The Times to analyze Mr. Trump’s 1995 records said tax rules that are especially advantageous to wealthy filers would have allowed Mr. Trump to use his $916 million loss to cancel out an equivalent amount of taxable income over an 18-year period.
“Although Mr. Trump’s taxable income in subsequent years is as yet unknown, a $916 million loss in 1995 would have been large enough to wipe out more than $50 million a year in taxable income over 18 years.”
Trump’s campaign responded to the New York Times report, though they did not confirm or deny whether Trump paid income taxes for the roughly two decades after his major losses.
“Mr. Trump is a highly-skilled businessman who has a fiduciary responsibility to his business, his family and his employees to pay no more tax than legally required,” the statement said. “That being said, Mr. Trump has paid hundreds of millions of dollars in property taxes, sales and excise taxes, real estate taxes, city taxes, state taxes, employee taxes and federal taxes.”
“Mr. Trump knows the tax code far better than anyone who has ever run for President and he is the only one that knows how to fix it.”
Donald Trump has already been under major pressure for refusing to release his tax returns, a standard for presidential candidates over the last 40 years. Some have already seized on his campaign’s response to the New York Times report, noting that Trump showed either carelessness or deceit in structuring the Donald J. Trump Foundation and certainly didn’t appear to be an expert on taxes.
A report from the Washington Post noted that his foundation lacked the proper certification for fundraising, meaning Trump could be on the hook to return the millions of dollars donated by outside sources. Previous reports from the Washington Post found that Trump appeared to use the foundation as a personal bank account, using it to pay off personal debts and buy luxury items for himself, including two full portraits of himself.
"Follow the money" is a real weird slogan for the first candidate in 40 years to refuse disclosure of tax returns https://t.co/XmknFH7yXT
— Jonathan Chait (@jonathanchait) September 29, 2016
Does Trump pay federal income taxes? That’s not the most scandalous thing his returns could reveal https://t.co/QNFICM9dpf
— PBS NewsHour (@NewsHour) September 30, 2016
The bombshell report about his possible tax avoidance comes at a very difficult time for Donald Trump. After slashing Hillary Clinton’s lead in the polls following her difficult start to September, Trump came unraveled at the first presidential debate. Trump fell for the bait of Hillary Clinton’s use of Alicia Machado, the 1996 Miss Universe who accused Trump of calling her “Miss Piggy” and “Miss Housekeeping” after she gained weight following her pageant win.
Trump has now fallen sharply in the polls, with Hillary Clinton stretching to a lead of close to five points and retaking the lead in several key states, including Florida and Nevada.
And the report could show some deep trouble within the Republican’s inner circle. The New York Times noted that Donald Trump’s tax returns were mailed from New York City, and postmarked to the Trump Tower.
[Featured Image by Ralph Freso/Getty Images]