On Friday, December 27, House Democrats released six years' worth of tax records for former President Donald Trump, covering the years 2015 through 2020. The returns show heavy losses, a massive inheritance, and Trump's apparent failure to follow through with his promise to donate his entire presidential salary.
This release comes less than a week after the House Ways and Means Committee revealed that Trump had paid a total of $1.1 million in taxes during his entire presidency. The records include thousands of pages of tax returns for Donald Trump, Melania Trump, and hundreds of Trump-owned companies.
"The individual tax return of the former President included the activities of hundreds of related and pass-through entities, numerous schedules, foreign tax credits, and millions of dollars in [net operating loss] carryforwards," the Ways and Means Committee wrote in its report.
The returns show that Trump declared no taxable income for ten years ending in 2018, and paid nearly $0 in taxes during several subsequent years.
"The 'Trump' tax returns once again show how proudly successful I have been and how I have been able to use depreciation and various other tax deductions as an incentive for creating thousands of jobs and magnificent structures and enterprises," Trump wrote in a statement.
Two years ago, the New York Times reported that Trump had cashed in on an inheritance from his father, the Starrett City Brooklyn housing complex, for more than $14 million in 2018. The newly released documents show that Trump's total gains from the sale of several of his inherited properties were closer to $26 million.
In the same year, Trump's sale of his own business properties resulted in a loss of millions of dollars, bringing down his overall tax liability. In total, Trump paid just under $1 million in federal taxes in 2018, accounting for nearly all of the taxes he paid during his presidency.
The reports show that Trump paid $0 in taxes in 2020 due to accumulating pandemic losses and his shrinking income. Perhaps due to those same issues, Trump seems to have decided not to donate his presidential salary for 2020. The returns reveal that Trump reported no charitable giving for the entirety of 2020, compared to $1.9 million in 2017 and more than $500,000 in both 2018 and 2019.
In 2015, then-candidate Trump made a pledge that he wouldn't take "even one dollar" of his $400,000 annual presidential salary, saying, "I am totally giving up my salary if I become president."
The revelation of Trump's tax returns comes after years of legal battles in Congress and the courts. Trump has long resisted Democrats' efforts to obtain and release his returns, bucking the tradition for American presidents to publish their returns. The disclosure is meant to disprove any potential conflicts of interest, something that Democrats have pointed out repeatedly.
"Trump acted as though he had something to hide, a pattern consistent with the recent conviction of his family business for criminal tax fraud," member of the Ways and Means Committee and Democrat Virginia Representative Donald S. Beyer Jr. said in a news release on Friday.
"As the public will now be able to see, Trump used questionable or poorly substantiated deductions and a number of other tax avoidance schemes as justification to pay little or no federal income tax in several of the years examined," Beyer continued.
Republican lawmakers have quickly condemned the Democrats' actions, issuing their own concurrent report complaining about the process that lead to the tax returns being released.
"Going forward, all future chairs of both the House Ways and Means Committee and the Senate Finance Committee will have nearly unlimited power to target and make public the tax returns of private citizens, political enemies, business and labor leaders, or even the Supreme Court justices themselves," top Republican on the Ways and Means Committee, Texas Representative Kevin Brady, said in a statement.
Trump's returns seem to show a history of tax avoidance, but several audits of his finances were stalled in the Internal Revenue System due to a lack of resources. For one of the audits, a single IRS agent was assigned to audit all of Trump's thousands of pages worth of tax returns.
"With over 400 flow-thru returns reported on the form 1040, it is not possible to obtain the resources available to examine all potential issues," an internal IRS memo states.
In addition to that lack of oversight, the director of the tax advocacy group Americans for Tax Fairness, Frank Clemente, says that Trump was able to pay so little in taxes thanks to "a loophole-ridden tax system in need of fundamental change."
Many have noted the fact that the House's recent reports did not include documentation from the failed audits, a fundamental factor behind Trump's ability to avoid accountability.
The fact that Trump wasn't held accountable for any issues with his returns highlights the difference in how businesses and individuals are treated by the tax system.
"Under the current system, American workers pay virtually all their tax bills while many top earners avoid paying billions in the taxes they owe by exploiting the system," said Treasury Secretary Janet Yellen in 2021. "At the core of the problem is a discrepancy in the ways types of income are reported to the IRS: opaque income sources frequently avoid scrutiny while wages and federal benefits are typically subject to nearly full compliance."
Experts say Trump's history is a clear sign that an overhaul is needed. Advocates for tax reform say that capital and wages should be taxed in the same way, meaning that income earned from existing wealth should be taxed in the same way as other income.
"Lawmakers should equalize these rates so that someone who wakes up at 6 a.m. and trudges to work in the rain doesn't pay a higher rate than someone who sits in their inherited mansion watching the stock portfolio they were given grow," director of the Institute on Taxation and Economic Policy Amy Hanauer wrote for Newsweek.