President Donald J. Trump has consistently found ways to avoid paying large sums of taxes. Trump was the first billionaire to become president. He paid $750 for the years of 2016 and 2017 in federal income taxes.
From 2000 to 2017, Trump made it his job to only pay the minimum of taxes, totaling $24.3 million. He is the only president to purposely shield his tax filings and keep them private. Trump earned an estimate of $434.9 million in 2018 but reported a loss of $47.4 million. The president paid more money to foreign countries in taxes than to the U.S. In 2017, Trump paid $145,000 to India and $156,824 to the Philippines.
Trump has taken tax deductions and used them for business expenses. He has also done this for his daughter Ivanka Trump with her personal expenses. He claimed his $70,000 hair expenses as a business expense. His businesses wrote off around $96,464 to Ivanka’s hair and make up artist.
A personal expense would only qualify as a business deductible if it directly relates to the appearance of a business. Although this is what Trump was claiming, the guidelines for this deduction is strict.
Since Donald and Ivanka Trump used this appearance outside of a business context, it would not officially qualify as a business expense. During Trump’s first general election debate against Hilary Clinton, he was told by Clinton he was not releasing tax returns because he has not paid anything in federal taxes. He interrupted by saying “That makes me smart.”
Trump is a billionaire who has paid little to nothing for his taxes because he has been reporting a net operating loss. This occurs when a company’s deductions exceed taxable income. This has benefited Trump because it has reduced taxable income with his future tax records in which he has paid a minimal amount . Since it was reported that his businesses were having more expenses than income, it gave Trump tax credit.
He used the loss carryforward to spread a current net operating loss over subsequent years and net operating income to reduce future tax liability. Many businesses use this tax provision to get out of paying a large sum of taxes. Trump has lost close to $175 million from 2000 to 2018. His debt has accumulated to an amount of about $421 million which would need to be paid within the next four years.
Trump is paying less taxes than the average middle-class family in America. The tax code has specific conditions for people who identify as real-estate professionals. They can deduct unlimited amounts of losses if 50% of their businesses include real-estate.
Natasha Sarin, an assistant law professor at the University of Pennsylvania said, “If you are wealthy and have at your at your disposal access to resources to figure out ways to toe the line with respect to tax laws or totally evade existing liabilities, there’s an infrastructure in place for you to do it, and it’s incredibly hard for the IRS to go after you.”
Trump has an advantage of not paying as much taxes as the rest of American citizens because he has connections. He will continue to use his resources as long as he is being permitted to even if it is unfair.