The 2005 tax return shows Trump earned $153 million—that’s more than $400,000 a day. Trump paid out $36.6 million in federal income taxes, much of it in the form of what’s known as the alternative minimum tax, which Trump now wants to eliminate. The document also shows Trump wrote off more than $100 million in business losses to reduce his federal taxes. But the documents also leave many questions unanswered about Trump’s finances and his sources of income. In January, Trump dismissed calls to release his tax returns.
HALLIE JACKSON: Will you release your tax returns to prove what you’re saying about no deals in Russia?
PRESIDENT-ELECT DONALD TRUMP: Well, I’m not releasing tax returns, because, as you know, they’re under audit.
HALLIE JACKSON: But every president since the ’70s—
PRESIDENT-ELECT DONALD TRUMP: Oh, gee, I’ve never heard that. Oh, gee, I’ve never heard that. I’ve never heard that. You know, the only one that cares about my tax returns are the reporters. OK? They’re the only ones. But—
HALLIE JACKSON: You don’t think the American public is concerned about that?
PRESIDENT-ELECT DONALD TRUMP: But, no, I don’t think so. I won. I mean, I became president. No, I don’t think they care at all. I don’t think they care at all. I think you care. I think you care.AMY GOODMAN: This morning, President Trump tweeted, quote, "Does anybody really believe that a reporter, who nobody ever heard of, 'went to his mailbox' and found my tax returns? @NBCNews FAKE NEWS!" unquote. That’s despite the fact that the White House confirmed the authenticity of the documents on Tuesday.
For more, we’re joined by that man that Donald Trump is describing, David Cay Johnston, the journalist who obtained the two pages of Donald Trump’s 2005 1040 tax forms.
Welcome back to Democracy Now!, David. So, well, this morning, Donald Trump is questioning how you got those tax returns.
DAVID CAY JOHNSTON: Yeah, I must have gotten under Donald’s skin pretty deeply, that he has issued this tweet, whoever heard of me. I don’t know. Donald and I have been talking to each other for 30 years. And, clearly, he is at war with his own Press Office. By the way, I’m very pleased, Amy, that you got correctly in your intro facts that both my former newspaper, The New York Times, and The Washington Post got wrong. You had the right amount of tax and some other figures that were wrong in those major newspapers. And I think that says a lot about the quality of the work that you do, and your viewers should know that.
AMY GOODMAN: Well, David, can you talk about how you got these two pages of his 2005 tax return?
DAVID CAY JOHNSTON: I was in Palm Beach on Monday. And I had my cellphone in hand, and I was shooting pictures across the water of Mar-a-Lago, because I’m working on a new Trump biography, a second one—I have one out now, this one for Simon & Schuster—when I got a text from one of my eight grown children, said to call right away. And she had opened the mail at our home in Rochester, New York, and here was this envelope with the two pages of tax data. So, I immediately, you know, began to go to work on it, so that we could get the story out right away at DCReport.org.
AMY GOODMAN: So, talk about what you see in these two pages, what you found, David, most significant.
DAVID CAY JOHNSTON: Well, the most significant thing, I believe, is that Donald Trump wants to eliminate the alternative minimum tax. Almost all affluent Americans, people who own a home, have more than two children and live in the high-tax states, are on—and make more than $75,000 or $80,000 a year, are on the alternative minimum tax. Because of the alternative minimum tax, Donald paid $36.6 million in income tax. But if that was repealed—and he wants to repeal it—he would have paid only $5 million of income tax on $153 million of income. That is a tax rate of less than three-and-a-half percent. You know who pays a three-and-a-half percent tax rate in this country? The poorest half of Americans. They pay a little more than three-and-a-half percent. Donald Trump would have paid a lower tax rate than people who make less than $33,000 a year, if his tax plan had been in effect in 2005. So, you know, when Donald Trump says, "I’m the champion here of working people," don’t pay—don’t pay attention to that. When he says, you know, wages are too high, that’s one sign. But here’s one: his tax plan? Man, you make thirty—you make $600 a week, you’d be more heavily taxed than he is.
AMY GOODMAN: So how did he end up paying the amount of taxes he did?
DAVID CAY JOHNSTON: Well, Donald had $103 million of negative income. That may be a hard concept for people to get around, but in tax law you can have a negative income, just like your bank account can be overdrawn, and then you have a negative bank balance. Donald’s negative income, I’m pretty confident, comes from a dubious tax shelter that he bought in 1995. That allowed him to get out of a very big tax bill. Donald did not pay back to his bankers $918 million that he borrowed from them. Now, ordinary people, they have to pay taxes on that. If you borrow money from a bank and don’t pay it back, that’s taxable income, according to the U.S. Congress. Donald bought a tax shelter that turned into tax savings for him.
Now, when the Republicans in Congress learned about this tax shelter, they shut it down right away. I mean, it was just considered odious. It only took them a couple days to shut it down. It was incredible how fast they moved in Congress to do this. But as often is the case, our Congress said, "Oh, those of you who already bought this dubious tax shelter, you can keep your ill-got tax savings." And so, Donald had $918 million that he could write off of negative income against his positive income. And this return, 11 years later, shows that he had $103 million left, although he may have had some additional tax losses in the meantime. But assuming that that represents the residue from the $918 million, it also tells us that Donald’s average income from 1995 through 2004 was $81.5 million a year.
AMY GOODMAN: What doesn’t these—what doesn’t the two pages tell us?
DAVID CAY JOHNSTON: Well, it doesn’t tell us a lot of really important things we need to know. It doesn’t tell us who are the sources of his income. It’s only the kinds of income he gets: capital gains, business profits, wages. We don’t know how much money Donald is getting from the Russian oligarchs. We know he gets money from the Russian oligarchs, but we don’t know how much. And the Russian oligarchs are essentially a state-sponsored network of international criminals.
Secondly, we don’t know who his partners are in the various entities he has. Donald has over 500 partnerships and S corporations and other business entities.
Third, and perhaps most important, we don’t know who he is paying money to. We know he’s borrowed a lot of money from the Bank of China. That’s kind of remarkable to think about having a Republican president of the United States who has borrowed a huge sum from a communist government-owned bank, which, by the way, is also the biggest tenant in Trump Tower.
So, you know, we really need to know, on matters both of criminality and national security, who the president is doing business with, who his partners are, who his sources of income are, who he is paying fees to and who’s paying fees to him. And we need his complete tax returns for the last 30 years to do that. Other people running for office—Hillary Clinton, for example—have made public their complete tax returns going back into the 1970s.
AMY GOODMAN: So, that’s very interesting about China, considering Donald Trump is very laudatory of Russia. There’s a lot been made about his relationship with Russian oligarchs, but you don’t hear as much about China.
DAVID CAY JOHNSTON: Right, right. Well, and right now there is a deal in which a sketchy Chinese company is proposing to buy 666 Fifth Avenue in New York. That’s a building owned by the family of his son-in-law, Jared Kushner. And the offer is apparently for $1 billion more than the Kushners paid for the building a decade ago. The Kushners get all sorts of other special goodies in this. And this certainly raises the specter of whether the Beijing government may have decided that the best way to have decent relations with this White House is to bribe the president’s family.
AMY GOODMAN: I want to ask you about the White House statement yesterday. Today, they’re questioning how you got these documents. I mean, clearly, Donald Trump knows exactly who you are, a Pulitzer Prize-winning journalist who worked for years at The New York Times. You wrote a book about Donald Trump. But last night, the White House said—just before you went to air, they wrote:
“You know you are desperate for ratings when you are willing to violate the law to push a story about two pages of tax returns from over a decade ago.
“Before being elected President, Mr. Trump was one of the most successful businessmen in the world with a responsibility to his company, his family and his employees to pay no more tax than legally required.
“That being said, Mr. Trump paid $38 million dollars even after taking into account large scale depreciation for construction, on an income of more than $150 million dollars, as well as paying tens of millions of dollars in other taxes such as sales and excise taxes and employment taxes and this illegally published return proves just that.
"Despite this substantial income figure and tax paid, it is totally illegal to steal and publish tax returns. The dishonest media can continue to make this part of their agenda, while the President will focus on his, which includes tax reform that will benefit all Americans."
Again, that from the White House last night. These illegally acquired and—published, rather, tax returns. So, David Cay Johnston, can you respond?
DAVID CAY JOHNSTON: Yeah, Amy, there is so much falsehood in that statement, including the amount of tax the president paid. He paid $36.6 million, not $38 million. It just makes my head spin. It is absolutely well-established law in the United States that when a journalist receives a document that they did not solicit, then they can publish it. And there’s nothing illegal whatsoever about publishing this. This is part of the effort by Donald Trump to confuse people and that furthers his very authoritarian views. I mean, Donald clearly talks about his office as the president as a dictator. Judges don’t agree with him? "Bad judges," etc.
And what happened here is, somebody familiar with my work—and I’m very well known for my coverage of taxes, I won a Pulitzer Prize, I’ve been called the de facto chief tax enforcement officer of the United States because of my exposés of the tax system—decided to send me, rather than some other journalist, this document. Maybe it was sent to other journalists, and they haven’t looked in their mailbox. My report on what’s in that is absolutely accurate. The White House confirmed it.
And, you know, Amy, the White House did something actually quite unethical yesterday. I have been dealing with White Houses since Richard Nixon. I’ve been at this 50 years, and I’ve been dealing with White Houses since Nixon. I have never before sent the White House a document to allow them to comment on it and have them take my exclusive story and give the information to other reporters. And that’s what they did. They never responded to me. They instead went to other reporters and said, "Here’s what’s going to happen." That is just the most base, unethical conduct by the White House Press Office that I have ever seen. If they don’t want to answer the questions, they don’t have to answer your questions. But to do this is just indicative of the utter lack of moral character of Donald Trump, who I’m sure approved and roughed out that statement.
AMY GOODMAN: David, are you saying you gave the two pages that you had for verification—
DAVID CAY JOHNSTON: Yes, of course. Of course.
AMY GOODMAN: —to them, and they gave those two pages out to other press outlets?
DAVID CAY JOHNSTON: I don’t know if they actually gave the two pages. They clearly gave the numbers out. There are some journalists who wrote about this. I have not read their stories—my wife has simply told me about them—because I haven’t had time to look at them. But it’s very clear from various press reports. And when I was on another TV station today, the producer said to me, you know, "Did you know Trump gave out your story just before it went public at DCReport.org?" And then I went on The Rachel Maddow Show a minute later. And that really is just not the way you do things. It is—it lacks honor. Of course, Donald Trump lacks honor, so I suppose I shouldn’t be surprised. Donald Trump doesn’t have any idea what honor is.
AMY GOODMAN: David Cay Johnston, when you got this envelope that had the two pages in it, where were you?
DAVID CAY JOHNSTON: I was using my cellphone to shoot a picture in Palm Beach of Mar-a-Lago from across the water, because it was part of the research I was doing for my next Trump biography. I have a book out now, The Making of Donald Trump. I have a new one that’s going to come out at the end of the year. And that’s when I got this message. And my—one of my eight grown children said, "You won’t believe what came in the mail," and then sent to my cellphone a PDF of the document. And I immediately said, "I’ve got to go to the airport and get back to work."