President Donald Trump paid $38 million in taxes on a reported income of $150 million in 2005, according to leaked tax returns shown Tuesday night on MSNBC’s Rachel Maddow Show. That translates to an effective rate of 25 percent.
The document not only offers a window into Trump’s wealth, but also shows how Trump’s tax reform plans could benefit him financially. Trump paid a 25 percent rate in 2005 because that’s the so-called alternative minimum tax rate, which ensures billionaires like Trump don’t use deductions to avoid paying taxes altogether. If it weren’t for the minimum, he would have paid a mere $7 million because he wrote off $100 million in losses, according to the New York Times. Trump has said he wants to abolish the alternative minimum tax.
“Trump’s return shows that he’s pushing tax changes that benefit multimillionaire heirs like him, not the middle class,” NYU tax law professor Lily Batchelder told the Times. “His proposal to repeal the A.M.T. would have slashed his own tax burden by $31 million, and his income tax rate would be lower than the average rate paid by families earning $75,000 to $100,000.”
According to the return, Trump earned $67 million in real estate royalties and $42 million in other business income. He also reported $32 million in capital gains, $9 million in taxable interest and $998,599.
The White House slammed MSNBC for releasing the report, saying they were “desperate for ratings.” Trump’s son, Donald Trump Jr. wrote on Twitter that the leak only proved his father’s business savvy. “Thank you Rachel Maddow for proving to your #Trump hating followers how successful @realdonaldtrump is & that he paid $40mm in taxes!” he said.
Trump famously broke with tradition by refusing to release his tax returns prior to the 2016 presidential elections. His critics have long obsessed over the possibility that they could include damaging information.
Last year, the Times published Trump’s 1995 tax return, which showed a $916 million loss. The loss was large enough to allow him to avoid paying millions in taxes for a number of years. [NYT] — Konrad Putzier