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Trump paid $0 in tax in 1981, but will supporters care?

A report by New Jersey gambling regulators uncovered by The Washington Post reveals that Donald Trump paid no federal income tax by declaring negative income.

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    Republican presidential candidate Donald Trump speaks at an event in New York. A new report reveals that in 1981, Mr. Trump paid $0 in federal income tax by reporting a negative income.
    Mary Altaffer/AP/File
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Calls for Donald Trump to release his taxes and accusations that the real estate mogul is hiding something that could undergird his promises to reform corporate tax practices if he becomes president took a thornier turn Thursday.

A 1981 report by New Jersey gambling regulators uncovered by The Washington Post shows that in the late 1970s, he reported a negative income, allowing him to pay a tax bill of $0 to the federal government.

That seems to go against some of his statements rebuking corporate executives for using false deductions to "get away with murder."

The New Jersey records, which stemmed from Mr. Trump's application for a casino license, shows he reported a combined income of negative $3.8 million in 1978 and 1979, using a provision of the tax code that allowed him to pay no taxes.

The report isn't necessarily a bombshell, as Trump has also said that gaming the tax code to pay as little as possible to the government is "the American way."

But by refusing to release his own personal taxes, he has also opened himself up to speculation that could potentially present a challenge as he moves toward the general election.

"Should it emerge that Trump pays little or nothing to the government, the average taxpayer surely wouldn't be pleased," wrote Moneywatch's Larry Light. "The privileges enjoyed by the top 1 percent of the population have stoked a lot of resentment among people whose wages haven't grown in years."

In an interview with the Post, Trump framed the issue as a political one, saying that he paid "substantial" taxes, but didn't provide specific details.

He told the paper he fights "very hard to pay as little tax as possible," adding, "One of the reasons is because the government takes your money and wastes it in the Middle East and all over the place."

Some Trump supporters said the issue was overblown. "The ONLY people who care what is in Trump's tax returns are the Media and a bunch of Liberals who will never vote for him anyway," wrote Bill Mitchell on Twitter.

In a year that's also seen the release of the Panama Papers, exposing information about tax shelters and some questionable practices by prominent politicians and celebrities from across the globe, Trump's decision could be because of what's in the returns, some tax experts argue.

Trump may worry that "he'd show very little income on his tax returns compared to his wealth claims," Bob McIntyre of the liberal group Citizens for Tax Justice told the Post.  Trump's returns could also show that he "writes off everything he has in his life – the hairdo, the plane – as business expenses," he added.

One reason Trump has said that he won't release his returns – that he is being audited by the IRS and some audits are still underway – isn't a barrier, an IRS spokesman told the Post. Richard Nixon released his returns while under audit, the paper reports.

But Trump argued that his use of some tax benefits, such as a $400 million New York City tax subsidy used to build the Grand Hyatt Hotel, his first major project, are a necessary choice to get projects built.

"The real world is that without certain tax abatements, you have a choice. The job could get built ... or you don't have to have anything. It could just go stagnant, and a town can die," he told the Post.

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