Weekend Catch-Up: How Did Donald Trump Lose $916 Million?

For indispensable reporting on the coronavirus crisis, the election, and more, subscribe to the Mother Jones Daily newsletter.


Surprisingly, I had some real-life stuff to attend to this weekend, which means I’ve only just caught up on the latest Trump meltdown. I might as well share it with you, since maybe a few other people need to catch up too.

On Saturday, the New York Times published copies of the first page of Donald Trump’s 1995 state tax returns from New York, New Jersey, and Connecticut. They show that Trump declared a net operating loss that year of $916 million—about $1.5 billion in today’s dollars. Questions abounded:

  • Where did the tax returns come from? They were sent to the Times anonymously, so no one knows. But rumors swirled around Marla Maples, Trump’s second wife, who might have gotten them as part of her divorce proceedings in 1999.
  • Did Trump really lose that much money in a single year? It seems all but impossible. Among millionaires who declared losses in 1995, the average amount was $614 thousand.
  • It seems likely, then, that Trump’s gargantuan loss was basically an accounting fiction of some kind. John Hempton, an Australian hedge fund manager and former expert on tax avoidance for the Australian Treasury, has a theory that Trump may have “parked” the debt from his bankruptcies with a dummy party offshore, where it was never collected but never officially forgiven. This would allow him to declare $916 million in losses even though he never truly lost anything.
  • What was the point of all this? Most likely, the Times speculates, it was used as a tax loss carry forward, which allowed Trump to declare zero income—and thus pay zero taxes—for as long as 18 years.

So how did Team Trump respond to this? Notably, nobody denied anything. Rudy Giuliani declared that Trump was an “absolute genius.” Chris Christie also applauded Trump’s genius, and remarked improbably that this was a “very good story” for Trump. Trump himself said nothing except that he had paid lots of other kinds of taxes, and that yes, he is a genius:

Needless to say, Trump knows nothing about tax law at all. He has accountants and tax advisors who do all this stuff for him. Nonetheless, the main message from Trumpville is that Donald Trump is a genius.

Elsewhere, reaction was a wee bit more restrained. It turns out that lots of people think that billionaires probably ought to pay income tax. All of us little people have to, after all.

So what’s next? Well, when the New York Times was asked if they have any more of Trump’s tax returns, they answered “No comment.” That might mean there’s more to come. Next Sunday’s debate should be fun, shouldn’t it?

POSTSCRIPT: Team Trump is trying to bury this story by directing all their attention to Bill Clinton’s sexual escapades; suggesting that maybe Hillary has cheated on Bill; and blathering about Hillary being mean to the women who accused Bill of misdeeds in the 90s. It’s not working. Nobody really cares much about this stuff anymore, and even the small interest that remains was wiped out by the tax story.

DOES IT FEEL LIKE POLITICS IS AT A BREAKING POINT?

Headshot of Editor in Chief of Mother Jones, Clara Jeffery

It sure feels that way to me, and here at Mother Jones, we’ve been thinking a lot about what journalism needs to do differently, and how we can have the biggest impact.

We kept coming back to one word: corruption. Democracy and the rule of law being undermined by those with wealth and power for their own gain. So we're launching an ambitious Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption, and asking the MoJo community to help crowdfund it.

We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We want to dig into the forces and decisions that have allowed massive conflicts of interest, influence peddling, and win-at-all-costs politics to flourish.

It's unlike anything we've done, and we have seed funding to get started, but we're looking to raise $500,000 from readers by July when we'll be making key budgeting decisions—and the more resources we have by then, the deeper we can dig. If our plan sounds good to you, please help kickstart it with a tax-deductible donation today.

Thanks for reading—whether or not you can pitch in today, or ever, I'm glad you're with us.

Signed by Clara Jeffery

Clara Jeffery, Editor-in-Chief

We Recommend

Latest