Trump’s 2005 Tax Return Was Leaked. He Paid Far More Than People Thought
Wed Mar 15 2017
Lucy Harlow (3650 articles)

Trump’s 2005 Tax Return Was Leaked. He Paid Far More Than People Thought

President Donald Trump didn’t avoid paying taxes for nearly two decades, after all.

According to a tax return that was leaked on Tuesday night, Trump paid $ 38 million in federal taxes in 2005, a year when the former New York real estate developer brought in just under $ 153 million in income. That gave Trump a surprisingly low total tax rate in 2005—just 25%—when, that year, the top marginal federal income tax rate Trump would have clearly qualified for was 35%.

What’s more, the $ 38 million in taxes includes a payment of just over $ 31 million that was generated by what’s known as the alternative minimum tax (AMT), an add-on tax that is supposed to catch high earners whose income might fall outside of what is normally counted as taxable income.

Trump’s tax payments that year also included $ 1.9 million in so-called self-employment taxes, which consists of Medicare and Social Security taxes. Those levies are usually on top of what people pay have to pay in basic income tax.

Excluding those two payments, Trump paid $ 5.3 million in taxes on $ 48.6 million in adjusted income, after claiming a $ 103 million business loss that year for an effective tax rate of just 10.9%. In comparison, the average American taxpayer in 2005 paid an effective tax rate of 13.6%, nearly three percentage points higher than Trump. Yet the average American made just $ 38,754 in adjusted income that year, considerably less than Trump.

Nonetheless, Trump’s tax payments are significantly higher than what some had earlier estimated. Last year, The New York Times published pages from Trump’s 1995 tax filings that showed the President had declared a loss of nearly $ 916 million that year. Tax experts told the Times that based on that nine-figure loss, Trump had the ability to use that loss to legally offset future income taxes, allowing the President to not pay taxes for the next 18 years.

The 2005 return shows that Trump began paying taxes again long before some had previously thought. In addition to the final tax bill, the 2005 return shows that Trump paid $ 13.4 million in estimated taxes, paid each quarter throughout the year. That figure also includes any money Trump paid in 2004 that actually applied to his 2005 return—suggesting that the President may have paid taxes the year before as well.

The latest released tax return also includes just over $ 17 million in itemized deductions, which can include charitable donations, as well as other payments such as medical bills and interest on a primary residence. During the campaign, some had questioned just how much Trump had given away to charity. That still remains a mystery. The deductions were detailed on another tax form, which was not part of what the leaked return revealed on Tuesday night.

Lucy Harlow

Lucy Harlow

Lucy Harlow is a senior Correspondent who has been reporting about Commodities, Currencies, Bonds etc across the globe for last 10 years. She reports from New York and tracks daily movement of various indices across the Globe