Donald Trump incurred most of his tax liability in 2005 from the Alternative Minimum Tax, a feature of the tax code that he has called to eliminate, according to a portion of his tax return for that year reported Tuesday night.
In 2005, Trump earned $150 million and paid $38 million in federal income taxes, for an effective income tax rate of just above 25 percent, the White House said Tuesday night in anticipation of the president’s returns being disclosed by the media.
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The leaked returns, as reported by journalist David Cay Johnston, included $31 million that Trump owed because of the Alternative Minimum Tax.
The Alternative Minimum Tax is meant to limit certain deductions to ensure that high-income earners do not avoid taxes altogether.
Without more information from Trump’s returns, it’s not possible to say why he was hit by the AMT, as it’s known.
Both President Trump on the campaign trail and congressional Republicans have called to eliminate the Alternative Minimum Tax.
Nevertheless, how ending the AMT would affect the taxes owed by Trump, and high earners like him, is not clear. Both Trump and congressional Republicans have also called for eliminating the kinds of tax breaks that lower tax liability.
