The revelations from the Times report raise a number of new questions about the President’s finances, and leave some existing ones unanswered. Here are a few of those questions.
Why won’t Trump release his tax returns?
Trump and his staff have repeatedly pushed back on the Times report.
“I paid millions of dollars of taxes,” Trump said during Tuesday night’s debate. (He later went on to say: “I don’t want to pay tax … I was a private developer, I was a private business people. Like every other private person, unless they’re stupid, they go through the laws and that’s what it is,” apparently referring to tax credits and other provisions in the tax law used to reduce his federal income tax bill.)
How wealthy is Trump, really?
The reporting on Trump’s tax records provides insight into the cash flowing in and out of the President’s complex business empire, but it doesn’t reveal his net worth, a topic of much speculation.
Just because Trump has reported losing millions on buildings and golf courses on his tax returns — and therefore, little or no taxable income — does not mean those properties aren’t valuable.
“You can have assets where you take depreciation and losses over time, and the value of the property goes up,” meaning the property’s owner could still turn a profit on a sale, said Chris Mayer, co-director of the Paul Milstein Center for Real Estate at Columbia Business School.
The returns also do not account for items that Trump may own but that don’t generate revenue, such as a helicopter or family home.
Why does Trump keep pumping money into floundering businesses?
For all his self-professed business acumen, the Times report shows some of Trump’s best-known business ventures are bleeding money.
That includes his beloved golf courses, which have racked up hundreds of millions of dollars in losses over the past 20 years, according to the Times report. (The tax records reviewed by the Times represent Trump’s own reporting on the financial performance of his businesses, not the results of an independent investigation.)
One possible explanation could be if Trump took on “recourse” loans, wherein the lender can come after all of a borrower’s assets rather than just the property for which they are lending, if the borrower can’t repay the loan, according to Mayer. That setup can give borrowers an incentive to pour more money into a property (investments that, in the meantime, can be written off as business expenses) with the hope of eventually selling it for a big profit.
“Usually you only see personal recourse lending is when they’re really pushing the envelope, they’re borrowing a lot against the value of the property,” Mayer said. “Once you’ve done that … everything you own is at stake.”
The Times reports that Trump has more than $300 million in loans “for which he is personally responsible” coming due within the next four years. Still, it’s not entirely clear from the reporting exactly what kind of loans they are.
Are there implications from Trump’s foreign earnings during his presidency?
During his first two years as President, Trump earned a total of $73 million in revenue from outside the United States, according to the Times.
“While much of that money was from his golf properties in Scotland and Ireland, some came from licensing deals in countries with authoritarian-leaning leaders or thorny geopolitics — for example, $3 million from the Philippines, $2.3 million from India and $1 million from Turkey,” the Times reported.
Morgenstern replied that the President is “acting on behalf of the American people” and stressed that he was an international businessman prior to taking office, but did not offer any further details on the source of the money.
“I think that there’s a lot of concern about the real estate looking like it’s generating revenue from parties that have an interest in the government,” Mayer said, citing details from the Times report such a surge in new membership at Mar-A-Lago in 2015. “If the president is making policy decisions that impact groups, shouldn’t we know where that revenue is coming from?”
Who received around $26 million in consulting fees?
From 2010 to 2018, Trump wrote off some $26 million in unexplained “consulting fees” as business expenses, according to the Times report.
It’s unclear to whom the nearly $25 million in remaining consulting fees were paid, because the funds are not allocated to any specific person or entity in the returns.