Trump tax bombshell may lead voters to trust him less on the economy

US President Trump dismissed the report as 'fake news'

For Donald Trump the main political fallout of the bombshell leak of his tax returns is that it undermines his image as a billionaire businessman with the Midas touch.

That was how he sold himself to America four years ago, and the economy is still the issue where voters trust him most.

Despite the financial ravages of coronavirus they back Mr Trump 49-46 over Joe Biden to bring back the good times.

But the losses reported by Mr Trump, including $315 million at his golf courses and $55 million at his flagship Washington hotel, belie his reputation as a genius dealmaker.

For working and middle class people struggling through a pandemic the president’s reported tax write-offs, including $70,000 to style his hair on "The Apprentice," and over $100,000 for linens and silver at Mar-a-Lago, might well be a turn-off.

Mr Trump, according to the New York Times, paid no tax at all in 10 of the past 15 years. Many Americans who did pay tax in those years could really use that money now.

For years Mr Trump’s tax returns have been the Holy Grail for Democrats, who claim he is not worth his $2.5 billion valuation in Forbes.

Now they have finally been revealed, by the New York Times, and are as jaw-dropping as anticipated. Mr Biden must think Christmas, and possibly the White House, has come early.

The starkest claim was that Mr Trump reportedly paid $750 in federal income tax the year he was elected president, and another $750 in his first year as leader of the free world.

In 2012 Mitt Romney was pilloried for paying $1.9 million in taxes on $13.69 million in income.

Appearing at a press conference on Sunday night, an hour after the leak emerged, Mr Trump dismissed it as "totally fake news" and "made up". He declined to say how much he had paid in tax, merely that it was "a lot".

But it was easy to see why he has fought in the courts recently to stop Democrats getting hold of his returns.

FAKE NEWS!

— Donald J. Trump (@realDonaldTrump) September 28, 2020

In some ways, however, both Mr Trump and America have been here before.

At exactly this point in the 2016 campaign, with a month to go, a tape of Mr Trump making lewd and sexually aggressive comments about groping women was leaked to the Washington Post.

It was widely believed the "Access Hollywood tape" would be a fatal blow to his chances but, after a dip in the polls, he went on to beat Hillary Clinton.

In both cases the leaks came a few days before a presidential debate.

Four years ago Mr Trump issued a rare public apology for his behaviour. But it is highly doubtful he will apologise this time.

He has long known that his tax returns could come out before the election, and has had plenty of time to think about how to explain them to the public.

Mr Trump may argue that he simply used the financial wizardry of the most expensive accountants to get him the best deal under America’s notoriously labyrinthine tax code, and that he did nothing wrong.

There are clearly less loopholes in other countries. In 2017, when he paid $750 in the United States, Mr Trump handed over $145,400 in taxes in India, and $156,824 in the Philippines.

Hillary Clinton once implied he might have paid no US tax. Mr Trump responded that would make him "smart".

But the damage for Mr Trump is that it also makes him appear less rich.

The returns reportedly did show that he earned a staggering $427.4 million from "The Apprentice," and through licensing and endorsement deals related to his celebrity.

But the losses at his property businesses were apparently so high it offset that, meaning he paid little or no tax in most years. 

In 2018, while in office, he reported a $47.4 million loss, which may not resonate well with voters looking for a president to lead the economy back from the abyss.

Mr Trump also managed to undercut a previous president who became embroiled in a scandal over low tax bills.

Half a century ago a leak revealed that Richard Nixon, who earned a presidential salary of $200,000, paid $792 in federal income taxes in 1970, and $878 in 1971, slightly more than Mr Trump.