Study Details How President Will Profit Off
GOP Tax Bill
President Donald Trump
has repeatedly described the Republican tax bill he signed into law on Friday
as "an incredible Christmas gift" to low-income and middle class
Americans—despite the numerous analyses showing that the legislation will ultimately raise
taxes on millions in the middle class.
The president hasn't,
however, called the tax bill a massive "check to himself."
But a new study (pdf)
published on Friday by Americans for Tax Fairness (ATF) demonstrates that this
would, in numerous ways, be a more accurate description of the $1.5 trillion
plan.
While it is impossible
to determine precisely how much Trump will benefit from the GOP's legislation given
that he has persistently refused to release his tax returns, ATF finds
that Trump could save "at least $11 million a year and perhaps as much as
$22 million," thanks to several central elements of the tax plan (as well
as some of its under-discussed components).
The massive cut to the
corporate tax rate—which Trump has openly described as "probably the
biggest factor" in the bill—will also be a huge boon for the
president, given that he "owns millions of dollars in individual stocks
and mutual funds."
Other prominent
aspects of the bill that will benefit Trump include the plan's favorable
treatment of so-called pass-through business income as well as its estate tax
exemption, which "doubles the amount excluded from the tax, from roughly
$5.5 million for individuals and $11 million for couples to about $11 million
and $22 million."
ATF goes on to examine
the bill's favorable treatment of the real estate industry, which "will
continue to enjoy some of the biggest loopholes in the tax code under the
Trump-GOP tax law."
Where the GOP plan
closes loopholes, ATF notes, it makes exceptions for the real estate
business—where Trump made much of his fortune.
"When crafting
the measure at least two special exceptions were made for the real estate
industry when a loophole was closed," AFT notes:
"Like-Kind Exchanges (Section 1031
Exchanges): Capital gains taxes
are usually due when an asset is sold for more than it cost. But under current
law, investors in tangible items can indefinitely delay paying if they keep
reinvesting the proceeds in another item—what’s called a 'like-kind exchange.'
If these gains are continuously rolled over until the taxpayer dies, they are
never taxed at all. The Trump-GOP tax plan closes the like-kind-exchange
loophole for real property—except for
real estate investors such as Trump, who get to keep this handy way of avoiding
taxes on their gains.
Limiting Interest Deductions. The Trump-GOP plan required almost all
businesses to accept new limitations on their right to deduct interest payments
on their loans. All businesses, that is, except
for those involved in real estate investments, such as Donald Trump’s. He’s
called himself the 'king of debt'—some observers estimate his business loans
exceed $1 billion."
And despite
Trump's promise to
"eliminate tax breaks and complex loopholes taken advantage by the wealthy"—a
promise he claimed made his accountants go "crazy"—the GOP bill
leaves open a number of loopholes "enjoyed by real estate investors like Donald Trump," including:
Depreciation, which allows real estate investors to write off the costs of
property even as its market price rises, "cutting their taxes even as
their wealth grows";
Passive losses, which allow real estate professionals to use
"investments intended to lose money to reduce taxable income"; and
The at-risk rule, which allows investors like Trump "to
reap tax-saving losses from properties they bought mostly with borrowed
money."
Taken together, these
loopholes and tax cuts could net the president millions of dollars of extra
income per year—all while many middle class families see their taxes rise and
their health insurance vanish.