Estimating Trump’s wealth.
On Wednesday Mitt Romney said some interesting things about Donald Trump and his tax returns, and they got picked up by a lot of news outlets and pundits, including Legal Insurrection. This is the way his remarks were generally reported:
He also called on the entire GOP field to release their tax returns.
“I think there’s something there,” Romney said of Trump’s returns, “Either he’s not anywhere near as wealthy as he says he is, or he hasn’t been paying the kind of taxes we would expect him to pay,” Romney, a former Massachusetts governor, told Fox News’ Neil Cavuto on “Your World.”
Trump supporters felt that this was a low blow, and unsubstantiated as well. Also, coming from Romney—the guy many judge as having been insufficiently hard on Obama in 2012—it seemed uncharacteristic.
As usual, though, it’s always instructive to look at the transcript, and then to do a little digging into the background. In the full transcript Romney went into more detail than that. He went on to say:
…[P]erhaps [Trump] hasn’t been giving money to the vets or to the disabled like he’s been telling us he’s been doing…The reasons that I think there’s a bombshell in there is because every time he’s asked about his taxes he dodges and delays and says, well, we’re working on it. Hey, we’re not talking about the taxes that are coming due this year…We’re talking about taxes already filed, back taxes, my back taxes when I ran in 2012, my back taxes I put out in January of 2012.
The GOP debate was the next day, and Trump was asked about it. His answer was that he couldn’t do it because he is being audited:
However, there appears to be no prohibition on releasing tax returns during an audit, according to an IRS statement. What’s more—as Romney had suggested—there would be nothing holding Trump back from releasing taxes from previous years that are not being audited.
When Romney requested that Trump release his tax returns, Romney made said that he has no hard evidence against Trump, but is suspicious because of Trump’s dragging his feet. But—whether Romney has seen it or not (and I have no idea whether he has or hasn’t)—there actually is some evidence from the past, at least of a similar pattern, originating in a defamation lawsuit that Trump filed in 2009.
Please take a look at this NR article by Ian Tuttle entitled “The Litigious—and Bullying—Donald Trump.” It describes the following Trump exchange which took place during a lawsuit Trump lodged against Tim O’Brien, the author of a 2005 biography that claimed Trump’s worth was far less than Trump claimed:
In 2004, O’Brien had co-authored a piece for the Times detailing Trump’s financial woes — he had recently filed for the third of what would be four Chapter 11 bankruptcies — and quoted anonymous sources who reported that Trump’s wealth was not nearly what he claimed; in fact, it was in the hundreds of millions, they said…Trump, meanwhile, notoriously unreliable in his own estimates, offered figures ranging from $1.7 billion to $9.5 billion. In [his biography] TrumpNation, O’Brien cited those numbers, alongside “three people with direct knowledge of Donald’s finances” who estimated his wealth was “somewhere between $150 million and $250 million.” Trump denied it, in his usual colorful fashion: “You can go ahead and speak to guys who have four-hundred-pound wives at home who are jealous of me, but the guys who really know me know I’m a great builder.”
Trump filed a lawsuit asking for $5 billion damages. It’s worth reading the whole Tuttle article, but here are some excerpts [emphasis mine]:
Those who think Trump is a “winner” ought to take a close look at Donald Trump v. Timothy L. O’Brien. Because Trump didn’t just lose the case. He was humiliated…
“The case dragged on for as long as it did because he wouldn’t comply with discovery requests,” says O’Brien. “He wouldn’t turn over the tax returns, then the tax returns came in almost so completely redacted as to be useless.”…
And, of course, Trump himself was deposed, leading to the following exchange, a crystallization of the Trump ethos:
Q: Now, Mr. Trump, have you always been completely truthful in your public statements about your net worth of properties?
A: I try.
Q: Have you ever not been truthful?
A: My net worth fluctuates, and it goes up and down with markets and with attitudes and with feelings, even my own feelings, but I try.
Q: Let me just understand that a little bit. Let’s talk about net worth for a second. You said that the net worth goes up and down based upon your own feelings?
A: Yes, even my own feelings, as to where the world is, where the world is going, and that can change rapidly from day to day. Then you have a September 11th, and you don’t feel so good about yourself and you don’t feel so good about the world and you don’t feel so good about New York City. Then you have a year later, and the city is as hot as a pistol. Even months after that it was a different feeling. So yeah, even my own feelings affect my value to myself.
Q: When you publicly state what you’re worth, what do you base that number on?
A: I would say it’s my general attitude at the time that the question may be asked. And as I say, it varies.
The key to estimating the worth of an individual like Trump is understanding that his main asset appears to be his “brand”—in his case the name “Trump” (the following was written last July):
Donald Trump’s net worth is $2.9 billion — far less than the $10 billion the real estate mogul and GOP presidential hopeful claims he’s worth, according to a new Bloomberg analysis.
Trump, who has made his personal wealth part of his pitch to voters, released a 92-page rundown of his net worth last week. He calculated his fortune at $8.7 billion, including $3.3 billion for the value of his name, in the federal disclosure form.
Bloomberg tallied up Trump’s real estate holdings, including his share of several skyscrapers, golf courses and resorts, based on the current income generated by those properties, which is its standard approach for valuing such assets.
Bloomberg estimated Trump’s golf and resort properties at a combined $570 million, while Trump pegged the properties’ value at $2 billion “without disclosing his methodology.”
This background seems relevant to the current presidential campaign. It is relevant to the issue of Trump’s honesty and reliability. In addition, if Trump is asking Americans to elect him based to a large extent on his tremendously successful record in business, I think we all need the information in order to understand just what that record involves.
[Neo-neocon is a writer with degrees in law and family therapy, who blogs at neo-neocon.]