Trump wants to repeal the tax that ensured he owed money in 2005

Bryce Covert

Bryce Covert Economic Policy Editor, Think Progress

President Donald Trump has refused to release his tax returns. But late on Tuesday evening, reporter David Cay Johnston released a leaked copy of Trump’s income tax return in 2005 that showed he paid $38 million in taxes on more than $150 million in income.

The document throws a bit of cold water on the hypothesis that he had been able to avoid paying all income tax for two decades thanks to his ability to write down enormous business losses. But the documents also show that the only reason he paid income tax at all that year is thanks to a part of the tax code called the individual alternative minimum tax, or AMT.

And Trump wants to get rid of the AMT altogether.

The AMT dates back to 1969, when it became public that 155 people who made more than $200,000 paid no federal income tax three years prior. After public outcry, Congress enacted an additional minimum tax. That eventually transformed into the AMT.

Today, the AMT requires eligible taxpayers to calculate what they would owe in regular income tax and what they would owe under the AMT — and pay the higher amount. It’s meant to ensure that the wealthy can’t get out of owing federal income taxes by adding up deductions, such as Trump’s write-off of business losses.

In 2005, the AMT meant that Trump owed the government $31 million on an income of $150 million, paying an effective rate of 25 percent. That was already lower than the 35 percent statutory rate he faced on paper. But if the AMT weren’t in place, he would have paid an effective 5 percent rate.

In his most recent tax plan, Trump called for completely eliminating the AMT. According to the Tax Policy Center, doing so would cost the government $412.8 billion over the first decade and nearly another $700 billion over the next decade.

That would not just benefit someone like Trump, but many other wealthy Americans. More than 60 percent families who make between $500,000 and $1 million pay the AMT, compared to less than 2 percent of those making under $200,000. While it also falls heavily on families who have a large number of children and live in high-tax states — grounds for potential reform to better target it at those with the most money — getting rid of it altogether would be a costly giveaway to the rich.

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Reposted from Think Progress.

Bryce Covert is the Economic Policy Editor for ThinkProgress. She was previously editor of the Roosevelt Institute’s Next New Deal blog and a senior communications officer. She is also a contributor for The Nation and was previously a contributor for ForbesWoman. Her writing has appeared on The New York Times, The New York Daily News, The Nation, The Atlantic, The American Prospect, and others. She is also a board member of WAM!NYC, the New York Chapter of Women, Action & the Media. Follow her on Twitter @brycecovert

Posted In: Allied Approaches

Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

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There is Dignity in All Work

There is Dignity in All Work