The AMT was rolled out almost 40 years ago to make sure that wealthy Americans couldn't take advantage of lots of deductions and credits that allowed them to end up paying next to nothing in federal income taxes. That cohort of wealthy Americans has always included taxpayers like the president.
In 2005, according to Trump's personal tax return for the year, the president paid $38 million in federal taxes on income of $150 million. The return, leaked to reporter David Cay Johnston and featured on Rachel Maddow's MSNBC news show in March, showed that $31 million of that $38 million in taxes that Trump had to pay was due to the AMT kicking in. He claimed $103 million in deductions on his return that year, and only paid $5.3 million in regular federal income taxes.
The new tax plan also envisions lowering the so-called "pass-through" tax rate to 25 percent. Taxpayers in certain types of business partnerships -- developers like the president among them -- already enjoy the option of having their business income taxed at sometimes more favorable personal rates instead of potentially more onerous corporate rates. As my Bloomberg View colleague Justin Fox has pointed out, lowering the pass-through rate "just seems like a really great deal for people like Donald Trump."
Another feature of the new plan: lowering the estate tax gradually and then eliminating it entirely after six years. Making that tax go poof would provide a substantial windfall to Trump's children and other heirs, who conservatively stand to inherit hundreds of millions of dollars from him at some point. (Trump's daughter Ivanka, who would be one of the potential beneficiaries of that tax break, has been part of the White House's road show aimed at positioning the new tax plan as a boon for lower and middle-income families.)
We know about Trump's 2005 returns because they were leaked to Johnston. We know about certain details in Trump's 1995 return because that was leaked to the New York Times. A 1981 report prepared by New Jersey casino regulators showed he paid no income taxes for two years in the late 1970s. Returns from two years in the early 1990s referenced in a separate regulatory report from 1995 indicate the same thing.
We don't know about any other returns because Trump, unlike every president going back to Gerald Ford, hasn't voluntarily released his returns to the public. (I've seen the president's tax returns because he unsuccessfully sued me in 2006 for libel for a biography I wrote, and he had to turn over his returns to my lawyers during the litigation. I wrote a column early last year noting how valuable it would be for Trump's returns to be made public.)
Despite promising on the campaign trail that he would release them, Trump hasn’t. The GOP has helped Trump keep them secret since then.
And now that Donald Trump has graduated from wealthy taxpayer to wealthy president, he has the ability to help engineer changes to the tax code -- like an elimination of the AMT -- that could potentially save him tens of millions of dollars annually.
This should really be the time for folks to insist that all of the president's returns be made public. But don't hold your breath waiting for that to happen.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Timothy L. O'Brien is the executive editor of Bloomberg Gadfly and Bloomberg View. He has been an editor and writer for the New York Times, the Wall Street Journal, HuffPost and Talk magazine. His books include "TrumpNation: The Art of Being The Donald."
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