Donald Trump's Income Taxes

"Among the many other questions raised by the nebulous concept of 'greed' is why it is a term applied almost exclusively to those who want to earn more money or to keep what they have already earned – never to those wanting to take other people's money in taxes or to those wishing to live on the largess dispensed from such taxation.  No amount of taxation is ever described by the anointed as 'greed' on the part of government or the clientele of government." – Thomas Sowell

 

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No violation of man's rights, short of murdering him, exceeds that of the imposition of an income tax system in which the government lays claim on an individual's property – to take whatever portion of what one produces in order to give it to others to dispose of.  This concept precisely fits the definition of a slave – a person who is strongly influenced & controlled by something, in this case the income tax code, which people are forced to obey, & one person's legal property becomes the property of another.  This is the type of greed – legalized theft by the government – that Dr. Sowell referred to above.

 

So with this backdrop there still seems to be thousands, out of 324 million Americans, that are interested enough to take to the streets to protest Trump not releasing his income tax returns.  NYC & LA each had about 5,000 such protesters on April 15 in what was organized as the "Tax March" in 150 to 200 cities around the world.  Trump's response was the following tweet:

 

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Carol told me it is such a waste to have people protest Trump's income tax returns when there are so many other things of importance & injustice around the world that this energy could go into.  We have to remember that Trump's election made Democrats realize they are fish on a hook fighting for their political lives & saving their progressive statist Democrat hides, @ the expense of everyone else, is the only cause they are willing to fight for.

 

Now in the case of Donald Trump's income taxes – Trump's detractors asserted that he pays little or no income tax & because Trump would not release his income tax returns during the presidential campaign they became certain of it.  How surprised everyone was, when two pages of Trump's 2005 income tax return was illegally leaked that showed Trump paid $38 million in income taxes on $153 million of income (after deductions including a $103 million write off of business losses).  Click here to see Trump's 2005 income tax return.

 

The above income tax return shows that Trump paid over $31 million in 2005 because of the alternative minimum tax (AMT) – see line 45 of the return. 

 

The AMT is a supplemental income tax imposed by the federal government that is required in addition to the baseline income tax (see line 44 of the return) for many individuals with complicated returns regarding exemptions or special circumstances – not necessarily seven or eight figure incomes.  The AMT requires a taxpayer to calculate their income tax liability twice, once under regular income tax rules & rates & a second time under AMT rules & rates.  The idea of the AMT is to allow far less deductions & a higher effective tax rate.

 

Since the AMT is part of the standard 1040 Instruction Book economist Steve Moore was correct over two decades ago when he said the AMT is not an alternative minimum tax but a mandatory maximum tax.

 

Who among the protesters earns $38 million per year let alone pays that amount in taxes – the answer George Soros.  Who among the protesters becomes a multi-billionaire & then patriotically gives up the free enterprise system to run for president to bring wealth creation to all the citizenry – the answer none of them.  That is what Trump did.

 

Trump stipulated during the campaign that he employed tax accountants & attorneys to minimize his tax burden – a universal goal whether people use high power tax accountants & attorneys or do their taxes themselves.  Of course all of Trump's employees paid income taxes from their wages after working on this unproductive exercise of filing income tax returns.  What a waste of brain power & talent having these educated people fill out 1040 forms every year.

 

In addition, Trump donated his first quarter salary of $78,333 (annual salary prorated from January 20 to March 31) to the National Park Service.  See copy of check below.

 

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For his donating trouble Trump received criticism from the usual bunch of enemies of America: CNBC said the donation was not nearly enough; the Sierra Club called the donation a publicity stunt; & a 2017 MBA candidate tweeted that the donation was tax deductible & that all Trump was doing was taking money from one part of government, moving it to another, & getting a tax deduction – this cheap misuse of economic principles totally ignores that the money was Trump's property originally, having earned it working virtually 24/7, & that an income tax deduction amounts to cents on a dollar.  This Ivy Leaguer is counting on people being easily fooled.

 

To put Trump's income taxes in perspective the non-partisan Tax Policy Center projected that the top-earning 1% of Americans paid 45.7% of the individual income taxes in 2014 while earning just 17% of the income – or 2.7 times taxes paid to income received; the bottom 80% of income earning Americans paid 15% of all federal income taxes in 2014 while the bottom 60% paid less than 2% of federal income taxes.

 

These type of statistics are the basis of nonsensical statements made by politicians like BO in the cartoon below – & even more pathetically Democrat followers who believe it.

 

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Trump is catching on to the Democrats' time wasting tricks, is seeing them more & more as distractions, & has pretty much gotten matters like his personal income tax foolishness out of the way so that he can concentrate on turning the country around from the dangerous cliff BO was driving it to.

 

The American economy has been stuck in BO's deliberate harmful policies, that were documented on this blog for eight years, that resulted in a new normal of 2% annual growth from mid 2009 to the present – this compares with an average annual growth rate of GDP of over 4.5% from 1983 to 1988 & just under 4.0% growth from 1993 to 2000 – periods when most everyone prospered or @ least had a chance to succeed.

 

Trump has promised economic growth of over 3.0% for the next decade & even that scaled back forecast from his original could be in jeopardy – sales @ retail stores, restaurants, & online sellers decreased in March from a revised decrease in February from January; the consumer price index declined in March; spending on vehicles & parts has fallen for three straight months; bank loan growth has slowed; & the budget deficit increased to $651 billion from $461 the past twelve months – see graphic below for current national debt time bomb.

 

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Now all of the above is certainly not Trump's fault but if the economy does not pick up he & the Republicans will get the blame.  Losing the House &/or Senate majorities in 2018 will doom the remainder of Trump's presidency because the Democrats will just continue to oppose everything - but the difference from the present is that Trump will have no mechanism to move forward except by executive orders – we saw how that worked out the past two years.

 

Another potential firecracker is the looming partial government shut down on or about April 28 when the government runs out of money for the umpteenth time.  This time OMB Director Mick Mulvaney & Trump will need Democrat help to move funding bills out of the Senate – such bills to include a $30 billion increase in military spending, $2 billion to start the southern border wall project, & greater flexibility to deny funds to sanctuary cities – all points hated by Democrats.

 

After seemingly accepting the failed attempt to repeal & replace ObamaCare three weeks ago Trump said he was moving on to his next priority of tax reform only to say last week "I'm going to get healthcare done" thereby in effect putting tax reform on hold while spending valuable time on the no-win healthcare political issue.

 

In this regard Mulvaney told Laura Ingraham last Wednesday that a major repeal of ObamaCare – as opposed to the full repeal – would be completed in the House by April 29, the end date of Trump's first 100 days.  No word on when the Senate would take this up, if it does move through the House.

 

Mulvaney believes that getting rid of ObamaCare's most egregious parts will significantly improve the growth outlook – this is why they keep coming back to healthcare before tackling tax reform.

 

But Trump needs economic growth like in the 1980s & 1990s – see above - to get the country totally behind him.  Trump's refusal to release his income tax returns provides a Democrat excuse for not helping in tax reform or any other issue.  We all know that releasing his income tax returns will merely cause the Dems to find fault or move on to another fake issue – so Trump doesn't do it. 

 

Republican plans for economic growth, as a matter of course, are based on lower corporate & individual income tax rates from which the circle is completed by Democrats bringing up tax cuts (not tax rates) for the wealthy that will produce more millionaires & billionaires @ the expense of the poor who pay no income taxes & have no jobs.

 

It certainly is a tough row to hoe – but if anyone can pull a lot of it off it is Donald Trump - as he demonstrated last November.