Donald Trump received a $163.775 million tax break on Trump Tower, his upscale midtown Manhattan building.
The 68-story structure is home to several eponymous eating establishments, Ivanka Trump Fine Jewelry, and Nike’s flagship store — as well as a Gucci shop Trump boasted last month was “worth more money than Romney.”
Trump’s financial disclosure listed the building in the highest possible brackets, saying the property was valued at over $50 million and generated more than $5 million in income.
“This report was not designed for a man of Mr. Trump’s massive wealth,” the campaign said in a July 15 news release about the financial-disclosure form, adding that “Mr. Trump’s net worth is in excess of TEN BILLION DOLLARS.”
Trump Tower is currently worth more than $237 million, according to the 2016/2015 tax-year market value provided by the New York City Department of Finance.
Trump Tower began receiving the subsidy in 2004 as part of New York City’s Industrial & Commercial Incentive Program, which was established “to renovate industrial or commercial properties so you can extend their useful life,” said Jean Carubia, the NYC Department of Finance’s deputy director for commercial exemptions. The exemption, valued at $163.775 million in total on commercial property taxes, began in 2004 and ends in 2016.
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Carubia says the benefits apply only to renovations for the commercial portions of Trump Tower, adding that “there are no ICIP benefits for the residential apartments in this building or any other building.”
Addressing the amount of the exemption, Carubia says, “The assessed values on Fifth Avenue and 57th Street are relatively high, so the dollar value of this exemption is high, but not in relation to the total tax bill for properties in this area.”
Trump Tower isn’t unique; Trump has long sought subsidies, tax breaks, and other preferential treatment from the government.
The Trump Organization’s website touts the beneficial terms secured for the Grand Hyatt hotel, claiming that while “New York City was facing bankruptcy, Mr. Trump was able to negotiate an unprecedented contract in which the city provided a 40-year tax abatement, the first ever granted to a commercial property.”
And a 2011 Los Angeles Times investigation examined how Trump “courted public officials, sought their backing for government tax breaks under extraordinarily beneficial terms and fought any resistance to deals he negotiated.”
The article quoted Karen Burnstein, a former New York City auditor who claims Trump cheated the city out of nearly $2.9 million: “It’s extraordinary to me that we elevated someone to this position of public importance who has openly admitted that he has used government’s incompetence as a wedge to increase his private fortune,” she said at the time.
‘It’s a pretty messed-up system when people can use their money and political influence to get a special deal that no one else can.’
The Times investigation highlighted how Trump has scored hefty tax breaks in Florida, Atlantic City, and Nevada. It also examined Trump’s political contributions, including how he donated heavily at all levels of government, from federal candidates to members of the local Board of Estimate, which then approved land-development projects in New York City.
Jared Meyer, a fellow at the Manhattan Institute, noted Trump’s long history of courting public-sector largesse.
“All Trump is doing is using his political influence and taking advantage of how naïve lawmakers are on economic-development projects to get special treatment that no one else gets,” Meyer says. “I don’t think it’s fair — definitely not. Even in the debate, he bragged about how he gives politicians of all stripes money so that when he comes calling, they’ll do ‘whatever the hell you want them to do.’ It’s a pretty messed-up system when people can use their money and political influence to get a special deal that no one else can.”
Doug Kellogg, communications manager at the National Taxpayers Union, says such subsidies and tax abatements are indicative of a broken and distorted tax system.“People should look to criticize the politicians in New York and the government that created a system with a tax code so burdensome that they have to give out subsidies like this,” Kellogg says. “In this particular situation, we hope any attention brought because of Donald Trump’s presidential campaign will shine light on the property-tax code being broken.”
Not all New Yorkers are as lucky as Trump. According to Census Bureau data, New York had the third-highest per-capita tax burden in the nation, at $7,751 per resident, or roughly 15 percent of personal income. The Tax Foundation ranked New York 49th in the nation this year on its State Business Tax Climate Index.
— Jillian Kay Melchior writes for National Review as a Thomas L. Rhodes Fellow for the Franklin Center. She is the Tony Blankley Fellow at the Steamboat Institute.