Crain's New York Business may have shed some light on why Donald J. Trump doesn't want us to see his tax returns.
The magazine reports that the billionaire real estate developer got a property tax break designed for New Yorkers making less than $500,000 a year.
Michigan voters apparently weren't concerned about Trump's tax returns, giving him that state's GOP primary win on March 8.
Numerous publications, as well as The Donald himself, say that the Republican presidential nominee front-runner is worth billions, although the exact dollar amounts vary. Trump makes it simple for us, noting that he's "really rich."
But net worth and annual income are totally different animals for tax purposes. The Internal Revenue Service and state tax departments want to know, and collect tax on, the money that you're making each year, not all you've accumulated. (That comes later with an estate tax, but that's for another blog post.)
Tax systems use annual incomes as markers to determine who does and doesn't get certain tax breaks. In most cases, the richer you are, the less of a tax benefit you get. In fact, the really rich are not allowed to claim many federal and state tax breaks.
Tax break for not-so-rich property owners: That's the case with the Empire State's School Tax Relief, or STAR, program. It was created back in 1997 to help New York homeowners who generally don't breathe the rarefied air that ostensible high-rollers do.
Under STAR, qualifying property owners get an annual tax break of around $300 on their property tax bills.
Crain's reports that Trump is among the hundreds of thousands who've benefited from STAR.
OK, we know that Trump, like all of us, looks for every legal way to cut his taxes. That's an American pastime and as long as the tax-reducing techniques are on the up-an-up, no sweat.
And setting aside my own feelings about the blowhard billionaire's politics and personal style, I don't begrudge him lowering all his taxes as much as he can. That opportunity is one of the many reasons American still is great.
$500,000 income threshold: But, and here's the intriguing part, if Trump is an honest taxpayer taking all legal tax-saving claims, then he's also apparently being less than forthcoming about his annual income.
Why do I say that? Because, as Crain's notes, to be eligible for tax relief under the STAR program, a married couple, be they Joe and Jane NY Taxpayer or Donald and Melania Trump, must have annual income of $500,000 or less.
Crain's found records filed with New York City's Department of Finance that show Trump received a $302 STAR benefit on his latest property tax bill for his $5.2 million Trump Tower penthouse on Fifth Avenue.
If we're trusting the Trumps to be honest about their income in applying for the real estate tax relief and also trusting New York's tax collectors to be diligent in awarding such benefits, then we can only assume that The Donald's annual income is less than $500,000.
It must be hard to make do on such a paltry amount.
Mistake, but by whom? Trump's campaign manager told Crain's that the property tax benefit was "an error on the part of the city of New York" and that Trump received the benefit over the past three years even though he hadn't asked for it since 2009, when tax authorities began checking on applicants' income.
The city's Finance Department, however, told the magazine that it checks with New York state tax authorities every year to make sure applicants for the STAR benefit have income under $500,000.
Who's right, Trump's people or New York tax officials?
The Donald could clear it all up by simply releasing some of his annual tax returns.
UPDATE: The Wall Street Journal says it was the Big Apple's fault. The city told the business newspaper that Trump is ineligible for the tax break and "should not have received this benefit after the income limit law changed.” A NYC spokeswoman also said the GOP presidential hopeful "should immediately return its value to state taxpayers." No word yet as to whether The Donald will do that.
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