David Cay Johnston: How Trump Pays So Little in Taxes and Plans to Change Tax Law to Pay Even Less

Two pages from Trump’s tax return were obtained by Pulitzer Prize-winning investigative journalist David Cay Johnston of DCReport, who appeared last night on “The Rachel Maddow Show” on MSNBC. The 2005 tax return shows Trump earned $153 million — or 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. For more, we speak with investigative journalist David Cay Johnston, who obtained part of Trump’s 2005 tax returns and who has won a Pulitzer Prize for his reporting on tax law.

TRANSCRIPT

AMY GOODMAN: David, you talked about how much Donald Trump has paid in his taxes in 2005. In their response to you, they said, “We have to get back to more serious work of changing the tax system.” If he succeeds in changing the tax system, this alternative minimum tax, that required that he pay even the amount he did, he would eliminate?

DAVID CAY JOHNSTON: Yes. Donald Trump, in writing, in his campaign documents, has said, “We’re going to get rid of the alternative minimum tax.” Well, of the $36.6 million in tax that he paid, more than $31 million was because of the alternative minimum tax. And the reason for that is that that $103 million that was disallowed under the alternative minimum tax — it’s allowed under the regular tax, disallowed under the alternative — even with it being disallowed, Donald Trump still got a 20 percent tax discount on his taxes. And here’s why. At that level of income in 2005, your tax rate is 35 percent of your income. But if you’re on the alternative minimum tax, your tax rate is only 28 percent. That’s 20 percent less. So he was only paying 80 cents on the dollar to begin with. And this is part of what I’ve been writing about for years. We really have a tax system in America that very effectively and efficiently taxes your wages, your labor income. But if, like Donald Trump, you’re a business owner, and if, like Donald…

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