Nothing about Donald Trump’s presidency has been what can be described as “the usual”. From his temperament to his professional background and approach to policymaking and diplomacy, Trump’s term has been a significant departure from that of previous occupants of the Oval Office. An additional area where he has upended long-held US presidential traditions has been his vehement refusal to release his personal federal income tax returns. The matter has been hotly debated ahead of the November election, and the president’s finances have only come under further scrutiny in the wake of a New York Times’ (NYT) bombshell report which stated that he paid only $750 in federal taxes in the first and second years of his term and no taxes all in 10 of the previous 15 years. While potential tax fraud should (logically) not bode well for a person attempting to get re-elected to the presidency of a global superpower, how much do Trump’s taxes really matter, and given everything we know and have seen so far, can they affect his reelection campaign?
Let’s first talk about the precedent of disclosing tax returns among US presidents which was set, ironically enough by Donald Trump’s hero Richard Nixon who, during the Watergate scandal was accused of underpaying taxes for two years. After facing immense pressure from the press, Nixon ultimately not only shared his returns—which showed he paid just $792.81 in federal income taxes in 1970 and $878.03 in 1971 against an annual salary of $200,000—but also admitted to having wrongly claimed certain deductions, following which the Internal Revenue Service (IRS) sent him a tax bill of $432,787.
At the time, Nixon said: “The confidentiality of my private finances is far less important to me than the confidence of the American people in the integrity of the president.” Every US president since then (with the exception of Gerald Ford, who instead made public a decade’s worth of summary data about his federal taxes) has released their tax returns, despite being under no legal obligation to do so, with the idea that greater transparency from leaders would not only be helpful to their public image but also set an example for citizens to obey the law.
Unsurprisingly, this has not been enough to persuade Donald Trump to do the same, whose record already shines a rather poor light on the so-called “integrity” of the office of the president of the United States (US). However, decency aside, the reason why Trump’s taxes have become a matter of national debate is not just to establish whether, in Nixon’s words, the president is “a crook” or not, but also because his taxes point to potentially worrying financial ties and obligations that could adversely affect American national security interests.
According to the NYT report, Trump’s personal finances directly contradict the narrative surrounding his businesses and wealth that he has sought to sell to the American people. They show a man who has taken in millions of dollars and yet reported significant losses, which he has used to justify his tax avoidance. It’s worth noting that Trump has not been shy in boasting about using loopholes in the US tax code for his personal benefit, which he claims only highlights his great business acumen. However, his tax records also show the sums of money he and the Trump Organization (which is made up of hundreds of smaller companies) have received over the years, and how heavily he relies on making bank from businesses that put him in potential and often direct conflict of interest with his job as president.
His refusal to divest himself of his business interests while in the White House is concerning because, according to the report, his properties “have become bazaars for collecting money directly from lobbyists, foreign officials and others seeking face time, access or favor”. The documents obtained by The Times show that Trump’s revenue from abroad totaled nearly $73 million in the first two years of his term, with money coming in from a wide range of customers, including right-wing evangelical associations and via business deals in Scotland, Ireland, the Philippines, India, and Turkey, among others. While Trump’s finances do not reveal any new connections to Russia (an issue that has garnered the most public interest), they do provide some insight into the affinity that Trump has shown towards Moscow, given that he earned a personal paycheck of $2.3 million in 2013 due to his partnership with the Agalarov family for organizing the Miss Universe pageant in Russia. The Agalarovs are billionaires with close ties to Russian President Vladimir Putin, and also later helped the Trump campaign in 2016 to set up the now-infamous meeting that Trump’s officials took with a Kremlin-affiliated lawyer to dig up “dirt” on Hilary Clinton.
This is, of course, just the tip of the iceberg, and the records bring to light many of Trump’s woes, including struggling businesses and properties, an audit battle, and most importantly, more than $400 million in debt that will be due in the next four years. Though the documents show that over half of the debt is owed to the German Deutsche Bank, it is the other half where the details remain murky. Democrats have led the charge in drawing attention to this portion of Trump’s debt, pointing to the fact that this lack of transparency raises questions about whether foreign entities could have leverage over a president who has shown time and again that his primary allegiance is to his own personal interests, rather than his country. And while that is a completely legitimate concern, it is unfortunately unlikely that his political opponents will be able to do anything about it.
Although the president is supposed to turn over his returns if requested by the chairman of the tax committee in either the House or Senate, they still cannot be made public, which is an important part of the Democratic strategy. Even if the Democrats were able to make a case to release Trump’s records, auditing his returns could take months (like it did during Nixon’s time), which would rid them of the opportunity of disclosing anything on the subject before the election. Regardless, while the issue is significantly serious, it is, unfortunately, unrealistic to assume that Trump’s poor and worrying financial record will do anything to deter his right-wing fanbase from voting for him. Given that his personal associations with pedophiles, criminals, dictators, his violent and predatory behaviour towards women, consistent and blatant lying, and outright failure to manage simultaneous socio-political and health crises in the country have done nothing to weaken his support, it is unlikely that the NYT exposé will do any different. This kind of fealty is one that Trump thrives on, because it only reinforces what he thinks to be the ultimate truth: that he is immune to any norms, and that no rules apply to him.
Why Trump’s Taxes Do (Not) Matter
Though a serious issue, the president’s poor financial record is unlikely to deter his fanbase from voting for him.
October 14, 2020
SOURCE: CNN