Hot air and intrigue: did Donald Trump leak his own tax return?
It would be a classic Trump tactic to deflect attention from his troubles with wire-tapping claims and replacing the healthcare law – but it would also be risky
Trump: “You know, the only one that cares about my tax returns are the reporters, OK? They’re the only ones,” Trump said. “I won. And became president,” he continued when asked if the matter was not of concern to the American public. “I don’t think they care at all … I think you (the press) care.”
Polling conducted since the election has found otherwise, with nearly 75% of Americans responding that Trump should release his tax returns.
The alternative minimum tax was created in 1969 (and amended in 1979) to address the fact that some of the uber-wealthy could use so many deductions and loopholes that they ended up paying zero federal income tax. People with high incomes have to calculate their taxes twice – once with all their deductions and once without many of them. The taxpayer must then pay the higher of the two figures.
The AMT brought in about $28bn, or roughly 2% of all individual income tax revenues in 2015, according to the Tax Policy Center, a nonpartisan thinktank, which said that 4.1m people paid it.
The gap between those two figures can be enormous – as is made clear by these Trump tax returns, which show Trump would have paid a fraction in taxes were it not for the AMT.
“If we didn’t have the alternative minimum tax, he would have paid taxes at a lower rate than the poor who make less than $33,000 a year,” David Cay Johnston said on MSNBC about the returns. The AMT was applied to just a few hundred wealthy individuals when it was first imposed, but today it hits almost 5 million taxpayers.
At 7.44pm ET Brian Fallon, former press secretary to Hillary Clinton, tweeted breathlessly: “The holy grail.”
Ninety-eight minutes and a somewhat anticlimactic Rachel Maddow Show later, Fallon tweeted again: “Dems should return focus to Trumpcare tomorrow & the millions it will leave uninsured, not get distracted by two pages from ’05 tax return.”
It was neither the holy grail, nor the smoking gun, nor the long-awaited release of all Trump’s tax returns with all their potential Russian secrets. Instead it was two pages, broadcast on Maddow’s programme on MSNBC, showing that in 2005 Trump earned $150m and paid $38m ($5.3m in regular federal income tax and $31m in the “alternative minimum tax”, which he has said should be scrapped).
The White House got in its retaliation early, in fact even before the program went on air. “You know you are desperate for ratings when you are willing to violate the law to push a story about two pages of tax returns from over a decade ago,” it said in a statement emailed to journalists with unusual zeal and which also repeated the Trump trope of “the dishonest media”.
Rather than being a clarifying moment, it was yet again a small piece of a much larger jigsaw, begging more questions and fuelling further intrigue. Who sent the documents and why? They turned up in the mailbox of David Cay Johnston, a tax expert and author of a book on Trump, without explanation.
Appearing on Maddow’s show, Johnston quickly floated the possibility that the tax returns might have been leaked by Trump himself. If this theory is true, 2005 would have been a sensible year from which to flaunt his wealth: his reality TV hit The Apprentice had launched in 2004. On cue Donald Trump Jr. tweets: (Donald Trump Jr.Verified account @DonaldJTrumpJr)
Thank you Rachel Maddow for proving to your #Trump hating followers how successful @realDonaldTrump is & that he paid $40mm in taxes! #Taxes
Trump claims he cannot release his taxes while he is under audit. Yet he did so on Tuesday night in the White House’s preemptive statement. Zac Petkanas, a senior adviser to the Democratic National Committee, said: “The White House’s willingness to release some tax information when it suits them proves Donald Trump’s audit excuse is a sham. If they can release some of the information, they can release all of the information.
“The only reason not to release his returns is to hide what’s in them such as financial connections with Russian oligarchs and the Kremlin.”
The limited leak also shines a light on how Trump – and the rich in general – play the tax system to their advantage (“that makes them smart”). Johnston noted that in the 2005 return he continued to benefit from the roughly $916m loss he reported in his 1995 return, published last year by The New York Times. “Using a loophole Congress closed in 1996, Trump converted that loss into a tax credit for the same amount he could offset against income,” Johnston wrote.
Trump’s supporters gleefully seized on the hype as a non-story. The holy grail, however, is still out there somewhere.