WHAT YOU NEED TO KNOW

Katherine Chuang

The most infamous tax returns of the 21st century have come out…. sort of. Pointing to an IRS audit that began in the early 2000s, Trump has (until now) stymied the release of his tax returns. Earlier this week, The New York Times obtained Trump’s tax info and reported that in 10 of the past 15 years, he paid no income tax. In 2016 and 2017, the NYT found that he paid $750.

In the first Presidential debate last night, when asked how much he paid during those years, Trump said, "Millions."

We want to highlight that this isn’t illegal. Like any other American, Trump is entitled to use the tax code to minimize how much he pays Uncle Sam.

Facts

• Is this normal? 2018 tax analysis from Cal Berkely found American billionaires paid 23% of their income in taxes. The average person shelled out 28%. (BI)

• Rolling in the deep. The NYT reported that Trump paid $5M to the IRS before taking out deductions in 2016/2017, the remainder of which will roll over to future tax returns. Trump also declared losses of $916M, providing deductions that could waive him of liability for almost two decades.

• The theory of relativity. Depending on the state, an average American could pay up to $19k (NJ) or as little as $6k (WV). Joe Biden paid $92k in federal taxes in 2016 and $3.7M in 2017.

• Appreciating depreciation. Real estate investors can write off 4% of a property's purchase value each year as depreciation, allowing Trump to report massive losses and significantly reduce his income tax. (Bloomberg)

HOW IT'S BEING SPUN

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Here are the narratives our team has identified and the headlines that support them. These headlines are not necessarily false, but they do support the biased narrative from each side.

Bottom Line

We feel like a broken record, but it’s another week and another fiercely partisan story dominating headlines. The Left and the Right are doing their best to spin it, and here’s how your perception could be altered:

• If your news outlets are pushing the Right’s narrative, you may not see a problem with Trump’s actions. You’ll point out that he never technically broke the law, and this is a very cunning business move. Taxes are not a voluntary contribution, and he shouldn’t have to pay more than he needs to.

• If your news outlets are pushing the Left’s narrative, you may be more likely to find this egregious. You’ll see this as a prime example of another wealthy elite finding tax loopholes and this whole situation as unfair because you probably pay more in taxes than Trump has.

During his 2016 campaign, Donald Trump ran on immigration, the economy, and ultimately, giving a voice to Americans that felt forgotten by Washington. He frequently pointed to his business acumen as an indicator that he would be a good president. It worked in 2016, but now some are raising questions about his success.

Trump is still polling better than Biden on the economy, and it’s hard to see his base choosing to hop on the Biden train this late in the race. It’s especially hard to see his supporters trusting a liberal news outlet to interpret complex tax and financial documents for them. However, the NYT report may cause undecided middle-class voters to re-evaluate if he’s really what he says he is, and question whether it’s fair to use wealth to preserve wealth.

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