Trump would have paid a much lower tax rate – 4 percent – if he had not been snared by the Alternative Minimum Tax, designed to increase the tax burden on generally wealthy people who otherwise would pay a much lower tax rate due to tricky deductions and other accounting maneuvers.
That isn’t a scandal. In 2005, the AMT worked: it socked it to a rich guy who otherwise would have paid a much lower rate.
Romney, the 2012 Republican presidential nominee, was able to avoid the AMT due to a unique tax arrangement for his Bain Capital retirement package, and by receiving most of his $13.7 million income in capital gains ― passive flows from stocks, bonds and real estate holdings. Romney didn’t just pay a low tax rate, he paid a low tax rate by using the tax code in ways that available to only a few, very wealthy financiers, like stuffing an IRA with $102 million when the maximum annual contribution is just a few thousand.
The huge questions about Trump’s taxes ― a full understanding of who paid him and his company, for what, and where, along with his personal and corporate debts and deductions ― remain unanswered. What we know ― the president’s total income and tax rate for a single year more than a decade ago ― tell us very little.