Self-declared billionaire, US President Donald Trump, who paid a miniscule $750 (£580) income tax in 2016, will have to pay back $300 million in private loans in five years time. If he is unable to he may declare himself bankrupt.
Richard Murphy, professor of accounting at Sheffield University said “The possibility that this might arise during the course of a second term in office is particularly worrying: how can the president go bankrupt?”
Mr Murphy said: “The records appeared to show that “Trump is not a successful business person, just an arch-manipulator of borrowed funds to give the appearance of success when he is, in fact, simply accumulating debt that he might well be unable to repay.”
Accounting experts who analysed Trump’s tax returns, published by the New York Times on Sunday, said it showed that the president was “abusing the tax system”.
Alex Cobham, the chief executive of the Tax Justice Network, said: “This shows that Trump is either a very bad businessman or a tax cheat who is not respecting the tax system that he is asking everyone else to pay. Probably both are true.”
The New York Times said Trump paid $750 in federal income taxes in the year he won the presidency, and the same amount in his first year in the White House.
It said Trump paid no income taxes at all in 10 of the previous 15 years, largely because he reported losing much more money than he made. The Times said the records revealed “chronic losses and years of tax avoidance”.
In the US, people who derive their income from company dividends rather than salary only pay tax when the company records a profit and pays a dividend.
Trump branded the Times’ report as fake news. “Actually I paid tax. And you’ll see that as soon as my tax returns – it’s under audit, they’ve been under audit for a long time,” he said.
“The IRS [Internal Revenue Service] does not treat me well … they treat me very badly.”
In the past, Mr Trump has faced legal challenges for refusing to share documents concerning his fortune and business. Trump is the first president since the 1970s not to make his tax returns public.
- Barack Obama $1,792,414
- George W Bush $250,221
- Ronald Reagan $165,202
- George HW Bush $101,382
- Bill Clinton $62,670
- Donald Trump $750
Cobham said the $750 annual tax payments made in 2016 and 2017 by Trump, who claims to be a billionaire, were “far, far below” what most Americans paid in tax. Supermarket workers earning $25,000 would pay more tax than the president.
Cobham said the tax returns showed that Trump “ploughed hundreds of millions into businesses that don’t make money” and that “the case for him being a bad businessman is absolutely proved”.
“I think that is going to be incredibly difficult to defend paying so little in tax … even with his base, who might not value public healthcare but they do value the US’s ability to defend its borders.”
The Times said Trump had used “questionable measures” to reduce his tax bill, and he could face a possible hit of “more than $100m” if he lost “a decade-long audit battle with the IRS over a $72.9m tax refund he received, after declaring huge losses.
The newspaper said many of Trump’s golf courses and hotels had been reporting losses for years.
Democrat Senator Bernie Sanders tweeted: “Shock of shocks! Donald Trump, the self-proclaimed billionaire, received a $72.9 million tax refund from the IRS while not paying a nickel in federal income taxes in 10 out of 15 years.
“Yep. Trump l-o-v-e-s corporate socialism for himself, rugged capitalism for everyone else.”
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