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Fed hikes interest rate by smaller 0.50 percentage points to curb inflation, but forecasts steeper hikes next year



WASHINGTON – The Federal Reserve is going slower but aiming higher.

The Fed agreed to raise its key short-term interest rate by half a percentage point Wednesday, dialing back from recent outsize hikes as it draws up an end game in its aggressive campaign to tame soaring inflation.

But the central back forecast another three-quarter point in rate increases next year, more than it previously estimated. Fed officials are thus signaling they believe inflation is still too high and aren’t backing off their hard-nosed battle to subdue it despite growing recession risks.

In a statement after a two-day meeting, the Fed reiterated that “ongoing (rate) increases…will be appropriate” to bring down yearly inflation to the Fed’s 2% goal. Some economists reckoned the Fed instead would say “additional increases” would be needed, signaling the Fed is close to winding down the hiking cycle.


Fed Chair Jerome Powell is expected to provide more clues about the Fed’s plans at a 2:30 p.m. news conference.

How much did the Fed raise interest rates today?

The Fed’s latest move follows four straight three-quarter point increases and takes the federal funds rate – which is what banks charge each other for overnight loans — to a range of 4.25% to 4.5%, a restrictive level intended to slow economic growth.

The hike is expected to ripple through the economy, driving up rates for credit cards, home equity lines of credit, adjustable rate mortgages and other loans. But Americans, especially seniors, are finally benefitting from higher bank savings yields after years of paltry returns.

Since the benchmark rate hovered near zero in March, the Fed has hoisted it by more than 4 points, the fastest pace since the early 1980s.

How high will Fed interest rates go?

The Fed now expects the rate to end 2023 at a range of 5% to 5.25%, higher than the 4.5% to 4.75% it projected in September, according to policymakers’ median forecast. It estimates it will cut the rate to 4.1% by the end of 2024 to support an economy likely to be weakened by the rate increases, above the 3.9% it predicted in September.


Most economists forecast a mild recession next year, according to those surveyed this month by Wolters Kluwer Blue Chip Economic Indicators.

On Wednesday, the Fed said it expects the economy to grow 0.5% this year, more than previously estimated, and at the same feeble pace in 2023, below its September forecast of 1.2%, according to officials’ median estimate.

It predicts the 3.7% unemployment rate will rise to 4.6% by the end of next year, above the 4.6% it previously projected.

Will inflation go down by 2023?

And the Fed’s preferred measure of annual inflation is expected to decline from 6% in October to 5.6% by the end of the year and 3.1% by the end of 2023, above earlier projections of 5.4% and 2.8%, respectively. That would mark a notable decline but would still be well above the Fed’s 2% target.


The broad strokes of the Fed’s decision Wednesday have been telegraphed for weeks. Since early November, Powell has said officials were likely to slow the pace of the rate increases as early as this month to assess their effects but arrive at a “somewhat” higher peak rate in 2023 than previously planned. He cited inflation that remained “much too high.”

More recently, though, Fed officials have had to weigh conflicting signals. A report Tuesday showed consumer prices rose 7.1% annually in November, down sharply from 7.7% the previous month and a 40-year high of 9.1% in June. That’s the second straight significant pullback of inflation as measured by the Consumer Price Index (CPI).

Ian Shepherdson, chief economist of Pantheon Macroeconomics, predicted the inflation report would lead the Fed to forecast just one more quarter point rate increase early next year before pausing as recession risks loom larger.

Is the job market still hot?

Research firm Barclays, however, says Powell and other officials are focusing more on a labor market that’s slowing but remains too hot for a Fed intent on corralling price surges before they become entrenched. Employers added a healthy 263,000 jobs in November and average annual wage increases picked up to a vibrant 5.1% from 4.7% the prior month.

“Job gains have been robust in recent months, and the unemployment rate has remained low,” the Fed said in its statement Wednesday.


Higher labor costs typically prompt companies to raise prices to maintain profits.

In a speech at the Brookings Institution last month, Powell noted that while goods inflation has cooled as supply snarls have improved, the price of services such as health care, education and restaurant visits have shown little sign of easing. Tuesday’s CPI report underscored that trend has continued despite the drop-off in overall inflation.

Powell pointed to persistent worker shortages that have spawned sharp wage increases in service industries. He noted that most of the baby boomers who retired early during the pandemic are unlikely to return to the workforce.

“Despite some promising developments, we have a long way to go in restoring price stability,” Powell said in the speech.

Another reason for the Fed’s tough stance on rates is that it has been locked in a sort of tug-of-war with financial markets. The last two CPI reports boosted stock markets and pushed down long-term interest rates, bolstering the economy, partly on hopes they would mean fewer rate hikes.


But a better economy likely would keep inflation higher for longer, forcing the Fed to raise rates more sharply. Part of the Fed’s goal Wednesday is to head off a favorable market reaction by forecasting that rates will rise further than officials projected in September, Barclays says.

How high will the Fed raise interest rates?

No one knows for sure how high the Fed will raise rates before it hits the pause button. JPMorgan Chase CEO Jamie Dimon said last week he thinks the Fed will stop once rates hit 5%.

–Elisabeth Buchwald

What causes a rate hike?

When an economy is booming and inflation is rising, the Fed will often raise interest rates to slow down everything. Higher rates make borrowing more expensive, which should make businesses and consumers think twice about spending. Slower spending should cool down the economy and inflation.

–Medora Lee


How it works: Why does the Fed raise interest rates? And how do those hikes slow inflation?

Stocks aren’t a guide: Despite stock rally, recession in 2023 is still likely as Fed continues to raise rates

How will rate hikes affect me?

The cost of holding debt with a variable interest rate is going increase.

That means rates on credit cards, new mortgages and auto loans will all rise. Those who already have a fixed mortgage rate for their home loan won’t see any difference in their payments.

On the other side, savers will get a little more for their deposits as those interest rates will also rise.


–Medora Lee

Fed meetings 2023

After today’s meeting, the central bank will reconvene on January 31 for its two-day meeting. Here is a look at the fed meeting calendar for the rest of 2023:

  • March 21-22

  • May 2-3

  • June 13-14

  • July 25-26

  • September 19-20

  • October 31-November 1

  • December 12-13

— Elisabeth Buchwald

What should we expect Powell to say?

Powell is expected to reiterate that inflation remains much too high (at 7.1% in November), and that the Fed has more work to do, meaning more rate increases are likely.

“Since inflation continues to remain elevated and recession risks are becoming clearer, we expect Chair Powell to provide a hawkish press conference to rein in equity prices and push back on the rate cuts priced in for late 2023, ” said Gargi Chaudhuri, head of iShares Investment Strategy. A hawk is someone who’s very concerned about inflation and wants to fight it aggressively.


Chaudhuri expects the effort now to slow inflation to the Fed’s preferred rate of 2% to be the hardest to achieve because most of the inflation now is in service components like rent and housing prices, which tend to take a longer time to ease.

–Medora Lee

Strong labor market: November jobs report: Unemployment rate held steady at 3.7% with 263,000 jobs added

What does the rate hike mean?

A rate hike is really an increase in the Fed’s short-term benchmark fed funds rate, or the target range for the rate at which commercial banks borrow and lend their excess reserves to each other overnight.

Consumer rates tend to track the fed funds rate in a ripple effect. If the federal funds rate is rising, banks might pass on additional interest costs in the form of higher interest rates on consumer and other borrowing, but also increase the rates they pay their depositors.


That means the cost of debt servicing will rise for both consumers and businesses, and savers should see a small boost in the interest rate for their deposits.

–Medora Lee

Beware of high costs: Beware of store credit cards this holiday. Here’s why they may end up costing you more.

Gloomy: Consumers are feeling less cheerful ahead of the holidays. What this may mean for spending

Will interest rates go down in 2023?

It’s unlikely that interest rates will go down next year since inflation remains high. Therefore, the Fed will likely have to continue raising interest rates. However, the size and frequency of rate hikes are likely to change. Whereas the Fed has been raising interest rates at almost all of its meetings this year, it could stagger rate hikes at meetings next year especially if the risk of a recession grows.


–Elisabeth Buchwald

Stock market today

Major stock indexes are edging higher at midday as investors await the outcome of the Fed’s policy meeting this afternoon.

The broad, benchmark S&P 500 was last up 21.07 points, or 0.52%, at 4,040.72; Dow Jones Industrial Average up 189.50 points, or 0.56%, at 34,298.14, and the Nasdaq-100 up 60.54 points, or 0.54%, at 11,317.35.

Medora Lee

What about the 10-year treasury?

Thirty-year fixed-rate mortgages trace movements in the 10-year Treasury note and are affected by the Fed’s key short-term rate only indirectly. On Wednesday, yields on the 10-year edged back up to unchanged around midday and back above the psychological 3.5% level, to 3.503%. Bond yields move inversely to bond prices.


–Medora Lee

What dates did the Fed raise rates in 2022?

Here’s when the Federal Reserve hiked its short-term interest rate this year, and the amount by which it raised that rate.

  • March 17: 0.25 percentage point

  • May 5: 0.50 percentage point

  • June 16: 0.75 percentage point

  • July 28: 0.75 percentage point

  • September 22: 0.75 percentage point

  • November 2: 0.75 percentage point

Elisabeth Buchwald

What are current mortgage rates?

The average 30-year fixed mortgage rate, as of Dec. 13, was 6.33%, down from a peak of 7.08% earlier this year, according to Freddie Mac.

Mortgage rates have been falling the past few weeks on signs inflation has peaked and the Fed may pause raising rates and pivot to lowering rates next year.


Priced out: What’s happening with the housing market? Mortgage rates, home prices and affordability

More pain ahead: Housing market has ‘further to fall’ as buyers walk away and sellers scramble for profit

What is discount rate?

Discount rate is the interest rate the Fed charges to commercial banks and other depository institutions on loans from their regional Federal Reserve Bank’s lending facility, or discount window.

These loans give banks and other institutions ready access to money and support the smooth flow of credit to households and businesses.

What is prime rate?

Prime rate, currently at 7%, is the interest rate a bank charges for loans to their very best customers with the top credit scores. It’s often used as a reference rate (or base rate) for many types of loans, including loans to small businesses and credit card loans.


Although the Federal Reserve doesn’t set the prime rate, many banks choose to set their prime rates based partly on the federal funds rate, which is set by the Fed.  That means it’s likely to rise when the Fed raises rates on Wednesday.

The Fed reports the prime rate posted by the majority of the largest twenty-five banks on its website.

–Medora Lee

Who runs the Federal Reserve?

The three main Federal Reserve entities are: The Federal Reserve Board of Governors, the Federal Reserve Banks, and the Federal Open Market Committee (FOMC).

The Chair (currently Jerome Powell) and the Vice Chair of the Board (now Lael Brainard), as well as the Vice Chair for Supervision (currently Michael Barr), are nominated by the President from among the members and are confirmed by the Senate. They serve a term of four years in these roles.

  • Each of the 12 Federal Reserve banks is separately incorporated and has a nine-member board of directors. The boards oversee their bank’s administration and governance, budget and overall performance, audit process, and broad strategic goals and directions.

Each bank has a president who serves a five-year term, oversees day-to-day operations and serves, in rotation, as a voting member of the FOMC, or policy making committee. The FOMC determines, among other things, interest rates.

  • The FOMC consists of 12 voting members – the seven members of the Board of Governors; the president of the Federal Reserve Bank of New York; and 4 of the remaining 11 Reserve Bank presidents, who serve one-year terms on a rotating basis. All 12 of the Reserve Bank presidents attend FOMC meetings and participate in FOMC discussions, but only the presidents who are FOMC members at the time may vote on policy decisions.

— Medora Lee

What’s a Fed pivot?

A Fed pivot is when the Fed reverses its current policy.

In this case, since the Fed is in an interest rate hiking cycle, it would mean the Fed would start lowering rates. That’s not expected to happen any time soon, but investors are keen to sleuth out clues as to when that could happen. Some economists think this could happen in the second half of 2023 while others say not until 2024.

— Medora Lee


How will Fed move affect higher-interest-rate savings accounts?

For savers, the rising interest rates mean deposit rates are reaching highs not seen in more than a decade, and they’re likely to continue climbing as the central bank continues to hike.

“However, future rate gains may be limited to savings accounts and short-term CDs,” or certificates of deposit, said Ken Tumin, a senior industry analyst at Lending Tree and founder of “Long-term CD rate gains have slowed and in a few cases, rates have declined in a way that has been similar to long-dated Treasury yield declines.”

— Medora Lee

How many federal reserve banks are there?

There are 12 Federal Reserve Banks, with a total of 24 branches nationwide. These banks serve as the “operating arms” of the Federal Reserve System.

Each bank operates in its own geographical region of the country and collects data on the businesses and needs of the communities it serves. That data is then used to help craft the monetary policy dictated by the Federal Reserve.


— Medora Lee

What should we expect the Fed to do and say today about rates?

Economists expect the Fed to raise its short-term benchmark fed funds rate by a half percentage point, which would be a step down from its 0.75-percentage point increase at each of the last four policy meetings.

In addition to the Fed’s policy statement announcing the rate move, the Fed’s releasing its summary of economic projections this month. In it, economists expect to see the Fed boost its forecast for how high it sees the fed funds rate next year. Most economists expect the Fed to raise its median forecast for the fed funds rate to around 5% from 4.6% in September, the last time it released its projections.

— Medora Lee

Strong spending: $11.3 billion in holiday shopping: Cyber Monday spending breaks all-time record, per report


When does Fed announce the next rate hike?

The Fed’s decision is announced at 2 p.m. ET on Wednesday.

— Elisabeth Buchwald

What time does Powell speak today?

Fed Chairman Jerome Powell’s media conference will begin at 2:30 p.m. ET on Wednesday. USA TODAY economics reporter Paul Davidson will cover the event in person.

— Elisabeth Buchwald 

Painful hope: Federal Reserve’s rate hikes hurt Americans. But it’s our only hope against inflation.


Wages and inflation: Good news is wages are rising. Unfortunately, that may also be bad news. Here’s why.

WASHINGTON, DC – SEPTEMBER 21: U.S. Federal Reserve Board Chairman Jerome Powell speaks during a news conference following a meeting of the Federal Open Market Committee (FOMC) at the headquarters of the Federal Reserve on September 21, 2022 in Washington, DC.

What is the current federal funds rate?

The current federal funds rate, the interest rate banks charge to lend to one another, is between 3.75% to 4%. In effect, it’s closer to 3.83%, according to an analysis by the New York Federal Reserve.

Elisabeth Buchwald

Elisabeth Buchwald is a personal finance and markets correspondent for USA TODAY. You can follow her on Twitter @BuchElisabeth and sign up for our Daily Money newsletter here

Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at


Paul Davidson is economics correspondent for USA TODAY. 

This article originally appeared on USA TODAY: Fed interest rate decision today: Live updates on Fed rate hike

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How to Reduce Your Personal Taxes?



tax income

Basic tips for Singapore tax residents
Whatever Year of Assessment (YA) it is, we should start considering our personal tax strategy early. In Singapore, one of the most expensive cities in the world, financial management can be an important tool for survival, and proper tax planning is an integral part of this.

Should tax planning be exclusively for high net worth individuals (HNWIs) with vast assets? As long as you are required to file a tax return, you need to do tax planning. It’s worth noting that your personal tax obligations affect your disposable income and proper tax planning can translate into significant savings in the long run.

Here are some basic tips to reduce your tax burden. However, please note that they are all general in nature. If you have more specific questions and/or concerns, please schedule a consultation with us.

Claim the relevant tax credits and rebates


Personal tax rates in Singapore are progressive, starting at 0% and ending at 22% (YA 2018) for annual incomes above S$320,000. There are a number of reliefs and allowances that allow you to save on your personal taxes.

Tax credits against your assessable income are given in recognition of your contributions to areas that are in line with government policy. For example, certain allowances are available to support parenthood and family formation, care for elderly parents, upskilling, national service, etc.

Some of the reliefs you can claim include, but are not limited to, Spouse Relief, Child Relief, Parental Relief, Earned Income Relief and Foreign Maid Relief. All are subject to certain conditions.

Top up your CPF (Central Provident Fund)

The CPF Minimum Top Up Scheme allows you to claim tax relief when you top up your CPF savings. You can also claim relief if your employer does the topping up.


This also applies when you top up your family members’ retirement account or special account for additional relief, provided their annual income does not exceed S$4,000 in the previous year.

For cash top-ups under S$7,000 made by you or your employer, you are entitled to a tax credit equal to the top-up amount. For cash top-ups of S$7,000 or more, your tax credit is limited to S$7,000.

For top-ups you make to your sibling’s, spouse’s, parents’ or grandparents’ CPF, you can claim additional relief equal to the cash top-up amount, which is capped at S$7,000.

The CPF top-up allowance you can make annually is S$14,000 (maximum).

Contribute to the SRS (Supplementary Pension System)


The Supplementary Retirement Scheme (SRS) is a voluntary scheme that encourages individuals to save for retirement beyond their CPF savings. Contributions to the SRS are eligible for tax relief, which will again be deducted from your taxable income. Investment returns are tax-free before withdrawal, and only 50% of SRS withdrawals are taxable at retirement. For Singaporeans and Singapore Permanent Residents, the maximum allowable contribution is $15,300 – YA 2018 per year, while the ceiling is $35,700 – YA 2018 for foreign Singapore work visa holders.

Voluntary contribution to your Medisave account

Claim relief on any income earned in the year your voluntary MediSave contributions were made. This method will help you reduce the amount of taxes you have to pay while saving for your health care needs.

The amount of relief allowed for voluntary Medisave contributions is limited to the lowest of the following: (1) Voluntary contributions specifically to a Medisave account; (2) Annual CPF limit minus the mandatory contribution by you and your employer; or (3) The prevailing Medisave contribution cap of $48,500 ($49,800 – YA 2018) less your Medisave account balance before your voluntary contribution.

Make a charitable donation


In Singapore, donations to any approved Institution of Public Character (IPC) or Eligible grant-making philanthropic organization are tax deductible.

In general, you will claim a double tax deduction (ie, double the amount of the gift) for gifts that fall into any of the following categories: (1) monetary gifts; (2) share gifts; (3) computer gifts; (4) donations of artifacts; 5) a public system of tax incentives for art; and (6) gifts of land and buildings.

The government will promote or discourage certain activities according to the economic situation and social benefits to fulfill the national benefits as a whole. By donating to charity, you not only do a good deed, but you also significantly reduce your tax liability. For example, donations made between 2009 and 2018 that meet the double tax deduction criteria will be temporarily entitled to 2.5 times the tax deduction.

Apply for the Not Ordinarily Resident (NOR) program.

Enjoy a period of 5 years of tax benefits (YA) if you qualify under the Not Ordinary Resident (NOR) scheme.


You must meet both of the following criteria: (1) you have not been in Singapore for 3 YAs prior to the year you qualify for the NOR scheme; and (2) you are a tax resident for the YA in which you wish to qualify for the NOR regime.

Rental expenses can be deducted from rental income

Rental income is taxable, so related expenses are deductible.

Examples of such allowable costs are: property tax, mortgage interest, fire insurance, maintenance fees to the governing body or general repair and maintenance costs. Check the following: rental expenses are deductible if incurred: (1) solely for the purpose of generating rental income; and (2) during the term of the lease.

The above are general tips to reduce your tax burden in Singapore. It is always better to plan before the end of the basic period. If your tax situation is unique or if your needs are more specific, consider consulting with a Singapore tax specialist.


JC has over 20 years of experience, including 14 years in senior management positions for small to some of the largest companies across Asia. He helps more than 30 companies from various industries and takes care of a number of CEOs and top managers. Transformation of digital business, first-class management and with multidisciplinary fields. With sets of unique business frameworks, JC helps clients grow their companies to where one of the startups is now valued at SGD 30 million.

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Commuters from the Southwest threatened arrest at Christmas in a viral video




Southwest Airlines He already had it Terrible end of the year After a massive winter storm forced it to cancel flights that had outsold its industry competitors. Then, somehow, the PR nightmare got worse.

At Nashville International Airport on Christmas Eve, a police officer threatened to arrest stranded Southwest passengers if they did not leave a secure area of ​​the airport. A video of the incident went viral on social media after it happened Posted by passenger to TikTok. Other videos circulating on social media also captured parts of the incident.

In the video, which has been viewed more than 910,000 times since it was posted two days ago, the officer warns passengers that they must leave the area or they will be “arrested for trespassing.”


“Now,” he continued. “Everyone to the unsafe side. The ticket counter will help you answer any questions you have.”

Shelly Morrison, who was among the passengers with her three daughters, was queuing at the southwest gate hoping to get more information about what was going on with her flight, to me the Tennessee.

After she and others waited nearly an hour for an explanation, one of the workers announced via the intercom that she was leaving – and called security. Morrison told the local newspaper that he did not tell a passenger that they had to leave if they had a canceled ticket.

“The Southwest is calling us”

Soon, two police officers from the airport’s Department of Public Safety arrived at the scene, just as Morrison’s daughter, Amani Robinson, began recording a video.

An officer tells passengers in the video, “If you don’t have a ticket, you don’t have to be on the safe side.” To someone who said they had tickets, he replied, “Your tickets just got cancelled.”


Morrison asked the officer again if he might be stopped, and he repeated to him: “If you don’t have a valid ticket and you’re on the safe side and you refuse to leave, you’ll be arrested… If your ticket’s canceled, they don’t have a ticket anymore. You understand that, right?”

He added, “Right now, Southwest is calling us because you guys are congregating here, and they’re trying to close that gate.”

The officer grew impatient when Morrison again tried to “establish a legal connection,” as she puts it in the video, and told him she was an attorney.

“Do you refuse to leave the safe side?” he asked clearly.

She replied, “No, I don’t refuse to leave.” “I ask for additional information. Can you mention the statue to me?”


He replied, “It is the security of airports and planes.”

“Don’t you have a department?” she asked.

“I don’t need to give you the code. If you’re a lawyer, you can look it up.”

Morrison thanked him and went with the others to where he had indicated.

Southwest responds

when called luckA Southwest spokesperson said that employees “did not request that customers be escorted outside the gate area.” Instead, the company required “that local law enforcement be present at the gate to assist with crowd control efforts while our team works with customers.”


A spokesperson for Nashville International Airport, also known by the airport code BNA, responded:

“The sheer number of flight cancellations over the past week has caused great stress for our passengers, and included an unfortunate incident involving a passenger, airline staff and an LNA officer. We are very sorry this happened and we take this situation very seriously. We are working with Southwest Airlines and our other airlines to promote better communication between team members so that every traveler enjoys the optimal experience at BNA:

luck She also contacted the Ministry of Transport regarding the airport incident, but did not receive any immediate response.

Southwest passengers trying alternative routes faced higher fares from other airlines, some of which — faced public backlash —Announce a price cap on the affected roads.

The Department of Transportation said this week it would open an investigation into Southwest Airlines. He. She he wrote in a tweet It was “concerned by Southwest’s unacceptable rate of cancellations, delays, and reports of a lack of prompt customer service. The department will study whether cancellations are manageable and whether Southwest is complying with its customer service plan.”


This article has been updated with responses from Southwest Airlines and the airport.

The Impact Report’s new weekly newsletter examines how ESG news and trends shape the roles and responsibilities of today’s CEOs. Subscribe here.

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Why Trump didn’t want you to see his tax returns




What was he hiding?

We’re finally starting to find out, now that the House Ways and Means Committee has released six years of Donald Trump’s personal and business tax returns. Trump’s returns are complex and it could take weeks for experts to realize whether Trump cheated or used overly aggressive tactics to lower his tax bill. The committee did not release any tax documents for some of Trump’s business entities, so puzzles may remain.

But a few things soon emerge from the assessment of the leading figures in Trump’s comeback. When Trump announced his candidacy for the presidency in 2015, he described himself as a builder and businessman who could go to Washington and fix what politicians had destroyed. Trump’s stated status was as a political outsider and business titan crucial elements in his appeal to voters.

But Trump’s tax returns suggest his businesses are always losing money, while raising questions about how he manages to fund a gilded lifestyle. In each of the six years from 2015 through 2020, DJT Holdings, one of Trump’s main business entities, lost millions of dollars. The smallest loss was $34 million in 2015. The largest loss was $64 million in 2016. Combined, these losses totaled $314 million from 2015 through 2020.


This is not an entirely new revelation. Glimpses of Trump’s finances have long revealed that Trump is capitalizing heavily on losses incurred in one part of his business portfolio, to offset gains elsewhere and significantly reduce his tax bill. Documents leaked to the New York Times in 2016 showed that Trump declared a loss of $916 million in 1995. lowered his tax bills for nearly two decades. When Trump began earning millions from The Apprentice TV show in the 2000s, losses from faltering real estate ventures, such as his casinos in Atlantic City, helped keep his income tax payments down. These practices are generally legal, although some tax experts believe Trump could have expanded the legal boundaries.

Members of the US House of Representatives Ways and Means Committee move boxes of documents after a panel meeting to discuss former President Donald Trump’s tax returns on Capitol Hill in Washington, US, December 20, 2022. REUTERS/Jonathan Ernst

When Trump ran for president in 2016, he said he would release his tax returns once the IRS finished auditing them. Of course Trump never released any tax returns, and the IRS audit wouldn’t have stopped him from doing so in the first place. Ways and Means Committee Finally got Trump’s payout from the IRS on Dec. 20, after Trump lost a four-year legal battle to keep them secret. He found justices all the way up to the Supreme Court Congress had the right to see the proceedsbecause it can contribute to legislative activity.

[Follow Rick Newman on Twitter, sign up for his newsletter or sound off.]

If Trump had released his comeback in 2015 while running for president in 2016, journalists and political opponents would have been mired in what appears to be huge business and personal losses. His return to DJT Holdings shows total revenue of $25.1 million but a net loss of $34.1 million. It is reasonable for a company to incur losses greater than revenue, since tax code allows for carry-over losses from prior years. But it’s very bad looks to tell voters you’re a business owner while reporting large losses to the IRS.


Trump and his wife Melania’s 2015 comeback undermines his commercial credibility. Trump’s adjusted gross income in 2015 was $31.8 million. In other words, he supposedly lost $31.8 million, because he was allowed to claim losses from his business against his personal income. His taxable income was $0 and he owed $0 in federal income tax. It is difficult for average workers who earn most of their income from work to declare passive income, unless they have capital losses or other types of losses beyond what they earn from their employer.

Hillary Clinton, Trump’s Democratic opponent, She released her tax return for 2015 on August 12, 2016. The report showed that she and her husband, Bill Clinton, had an adjusted gross income of $10.6 million, and paid $3.6 million in federal income tax, for an effective tax rate of 34%. While the return showed the Clintons wealthy, they claimed no mysterious tax breaks except for a small capital loss of $3,000. Trump was the nominee going after meat-and-potatoes voters in 2016, but Clinton’s taxes were more involved.

DJT Holdings reported business losses for each of the next five years, through 2020. In terms of Trump’s personal returns, his adjusted gross income has been negative for three years and positive for two years. Over the six years combined, those business losses have pushed Trump’s total adjusted income – $53.2 million, or a loss of $53.2 million. His taxable income was $0 for four out of six years.

Trump has hit one snag with regard to federal income tax payments — the alternative minimum tax, which raises the tax liability of some, mostly wealthy, depositors who use the deductions to significantly lower their taxable income. During four of those six years, the federal tax code started to push Trump’s federal tax bill. Including regular income tax and AMT payments, Trump appears to have paid about $4.1 million in federal income taxes from 2015 through 2020.

If voters had been able to see several years of Trump’s tax returns during the 2020 presidential election, it would have been clear that Trump’s corporations lose money every year and that Trump as an individual loses more money than he earns, overall. This isn’t really how it works. Trump has very few regular sources of income, such as millions of dollars in interest each year, and the capital gains that would come from the countless deals to license the Trump name. This income appears to be constant and recurring, while losses may occur in a particular year or two, but are spread across many years, for tax purposes.


Trump has sometimes bragged about the low taxes he’s paid, saying he’s drastically undercutting his tax bill It makes him smart. Maybe so. It will be interesting to see if that makes him more or less electable.

Rick Newman is a senior columnist for Yahoo Finance. Follow him on Twitter at @tweet

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