It’s not as much a tax story as it is a debt story. I’m not knocking The New York Times’ extensive and hard-won series of pieces on President Donald Trump’s tax returns from 2000 to 2018. It’s on its way to the Pulitzer Prize offices right now.
But it’s also no surprise that Trump paid no Federal income tax most years, or what amounts to nothing against his sizable wealth and holdings. Nor is that likely to hurt him among those who already support him. At least, it didn’t hurt him in the last election.
During their first debate, Hillary Clinton said, “Maybe he doesn’t want the American people, all of you watching tonight, to know that he’s paid nothing in federal taxes.”
Many Americans didn’t care then, and aren’t likely to care now. Nobody pays more taxes than they need to. And if they can muster enough write-offs, they don’t pay any. Now, an ongoing Trump audit, which centers around an astounding $72.9 million tax refund he asked for – and got – in 2010, could be a different story and is worth watching. If he winds up owing the American government in the neighborhood of $100 million, that’s a big deal. Even for a billionaire.
But Trump has long claimed that running for and serving as president has cost him money and business. The $47.4 million in losses for the Trump Organization in 2018 support that claim (the “failing New York Times,” by contrast, reported net profit of $55.2 million in the same year).
So the tax angle of all this, while interesting, is not the most surprising story, nor the most troubling. And Trump die-hards are not even likely to hold his business losses against him.
It’s the debt, stupid
What is surprising isn’t how little he has paid – but how much he owes, and how much would come due in a second Trump term. The magazine Mother Jones outlined much of this in its July/August issue this year.
That Trump has carried a large amount of personal debt hasn’t necessarily been a secret. But it should be a concern. The Times estimates that he would have more than $300 million in loans come due during a second term, but the actual total could exceed $800 million.
Jason Kander, a Missouri politician, veteran and best-selling author, summed up the importance of personal debt and national security concerns on Twitter, saying: “Substantial personal debt is one of the most common reasons security clearances are denied, because it’s so easily exploited or leveraged by foreign intelligence services.”
Trump owes money to foreign banks, and his largest creditor is Deutsche Bank.
He owes $100 million on Trump Tower in the form of a mortgage taken out in 2012. He has made interest payments on the loan, but the full amount becomes due in 2022.
He owes $139 million on a property at 40 Wall Street, due in 2025. His share of debt for one-third interest in his property at 1290 Ave. of the Americas is $285 million, due in 2022.
In Sept. of 2021, a debt of $163 million for his share of the 555 California St. property in San Francisco comes due.
Trump has two mortgages on his Doral Resort in Miami, which mature in 2023 at a tag of $125 million. The Times reported that Trump’s mortgage on his Washington D.C. hotel is $160 million, with a balloon payment due in 2024. The mortgages on both properties are held by Deutsche Bank.
Dan Alexander, a writer who covers Trump’s finances for Forbes magazine and who recently published the book, White House Inc., examining Trump’s financial entanglements in the presidency, recaps all of Trump’s debts in a Twitter thread in response to the Times’ piece, listing Trump’s total personal debt at $1.1 billion.
For most American voters, taxes are little more than a talking point. But $1 billion in personal debt could cause some pause – not only because it portends problems for a second term and potential outside pressures on what already is the most pressurized job on the planet, but because it paints a picture of an empire kept afloat by borrowing instead of building.
And Trump’s stewardship of the American economy has held the same pattern. After running on the notion that the country was “broke,” Trump has proceeded to run up $5.7 trillion in deficits in his first four years – eclipsing the $5.1 trillion for Obama as the government (successfully) tried to spend its way out of the Great Recession. Trump has added nearly as much debt in four years as Obama did in eight.
But Trump has had the pandemic to contend with. Forbes examined, then, Obama’s final three years (cutting off his first year as a result of his inherited recession) with Trump’s first three (cutting off the impact of the coronavirus on Trump’s economy). The result: Obama added $1.5 trillion in total deficits. Trump added $2.7 trillion. As a percentage of gross domestic product, debt was 3.1 percent in Obama’s final year, and was 4.6 percent in the last two years under Trump. This year, the Congressional Budget Office projects that debt will be 16 percent of GDP. (These numbers all come from Forbes’ reporting, here.)
In short, the Trump economy was fueled by debt, much as his personal finances have been over the past two decades.
It’s quite likely that American business leaders, if they even do take a fresh look at this, will view Trump as “one of us,” and shrug. It’s likely that among his loyal fans the debt will be written off as a “drop in the bucket” against his wealth – and in fact he can sell properties to meet obligations.
But for a segment of Americans, the level of borrowing, and concern over who that makes a president beholden to – and over which creditors might show up at Pennsylvania Ave., over the next four years, might actually be reason for reflection.
“He’s broke, he lives in our house, and he’s been stealing from us,” Kander said, in a succinct if partisan summation.
Embedded in the Times piece is this more even-handed conclusion: “His tax records make clear that he is facing a battery of threats to his business and financial well-being.”
The impact of those threats on a president, his country, and its national security will be an issue for a largely entrenched electorate to consider. And unlike their own tax liabilities, American voters would be well advised not to just write it off.