Donald Trump, who has characterized himself as a self-made billionaire who turned a $1 million loan into $10 billion, hid millions in gifts from his parents through various tax evasion schemes according to new allegations of fraud being investigated by New York State Tax Department.
Fred Trump, Donald’s father, had given Donald an estimated modern-day value of $200,000 per year from birth. Donald was, thanks to Fred, a millionaire at age 8. By his forties, Donald took $5 million annually from his father’s real estate empire. And Fred was very, very wealthy.
“Fred Trump was relentless and creative in finding ways to channel this wealth to his children,” wrote the New York Times. “He made Donald not just his salaried employee but also his property manager, landlord, banker and consultant. He gave him loan after loan, many never repaid. He provided money for his car, money for his employees, money to buy stocks, money for his first Manhattan offices and money to renovate those offices. He gave him three trust funds. He gave him shares in multiple partnerships. He gave him $10,000 Christmas checks. He gave him laundry revenue from his buildings.”
Dodging taxes, too, was essential to Donald’s personal success. The most damning thing in the Times story is that some methods the Trump family used to give the future President millions amounted to fraud. Tax experts consulted by the Times said that behaviors like channeling gifts through fake corporations, misrepresenting the value of Fred’s real estate and other schemes represented a pattern of deception and obfuscation.
These dodgy tax practices seem to be a family affair, with Fred declaring tax write-offs for helping invest in, or bail out, his son.
And in 1992, the Trump family founded All County Building Supply & Maintenance. All Country was supposed to serve as the supply chain company for Fred’s properties, but it wasn’t. It would mark up purchases already made by Fred’s employees, letting him siphon millions to his children.
It’s important to note that the statute of limitations on tax fraud and the other crimes detailed in the Times makes criminal prosecution unlikely if not impossible, but the Tax Department is investigating vigorously regardless.
Despite the statute of limitations, such an investigation might still have a real impact. Donald Trump’s refusal to release tax returns, in light of his history helping his family commit potentially criminal tax fraud, lends credence to the theory that something in those returns is damaging, or possibly criminal.
And, of course, he’s now profiting off your taxes too.
But there’s a more tangible takeaway from the Times‘ report. Trump represents yet another nail in the coffin of the concept of the “self-made billionaire”. More than just tax fraud and heaps of cash from Fred Trump, there’s something called the “headwinds/tailwinds bias” that many so-called self-made millionaires and billionaires are actually unaware they benefit from.
“The most under-acknowledged soft asset in professional realms is your own family’s socioeconomic station,” said journalist and author Sarah Smarsh. “That is the foundation from which we arise in a country of nuclear households, without much sense of the village. For members of the middle and upper classes, their politics, networks, choice of college, savings funds and even choice of industry probably have a lot to do with who raised them.”
And regardless of Trump’s millions in possibly-illegal gifts from his father, that’s the kind of thing that really makes a self-made man.
Katelyn Kivel is a contributing editor and senior legal reporter for Grit Post in Kalamazoo, Michigan. Follow her on Twitter @KatelynKivel.