""Donald Trump"" – Google News
Donald Trump is valued at $ 2.5 billion, which is short of $ 400 million to make it onto this year’s Forbes 400 list of America’s Richest People. The real estate mogul is just as wealthy as it was a year ago when it was ranked 339th, but has lost $ 600 million since the pandemic began. Tech stocks, cryptocurrencies, and other assets have flourished in the COVID era. But big city properties – which make up the bulk of Trump’s fortune – have stunted and kicked the former president out of the nation’s most exclusive club.
If Trump is looking for a culprit, he can start with himself. Five years ago he had the unique opportunity to diversify his wealth. Following the 2016 election, federal ethics officials urged Trump to divest his real estate assets. This would have enabled him to reinvest the proceeds in broad-based index funds and take over his position free of any conflicts of interest.
“I could actually run my business and run government at the same time.”
– Donald Trump, Jan. 11, 2017
Others in the executive branch have no choice but to listen to ethics officials. Individuals holding assets that could interfere with their day-to-day work in the government run the risk of violating the Criminal Conflict of Interest Act. However, the president is exempt from this law, as Trump proudly stated at a press conference nine days before he moved into the White House. “I could actually run my business and run the government at the same time,” he told a crowd of reporters gathered in Trump Tower. “I don’t like how it looks, but I could do that if I wanted to. I would be the only one who can do that. ”
Trump decided to hold on to his fortune. At the time, they were valued at $ 3.5 billion, after deducting debt. If he had chosen to sell everything instead, he might have had to pay substantial capital gains taxes. Trump acquired his five most valuable holdings a long time ago, so he likely has huge untaxed profits in each of them. If he had paid the maximum possible capital gains tax – 23.8% to the federal government, plus 8.8% to the New York State authorities for every penny he owned – that would have saved him and him about $ 1.1 billion in his fortune $ 2.4 billion on the first day of his presidency. But what initially seemed like a big sacrifice could have turned into a lucrative realignment. By putting that $ 2.4 billion into an index fund that replicates the S&P 500, for example, Trump’s fortune would have risen to $ 4.5 billion, which would have made him 80% richer than it is today. So his refusal to sell himself cost him $ 2 billion.
TUMBLING FROM THE FORBES 400
From 1997 to 2016, Donald Trump retained a spot in the top half of the Forbes 400. But things got worse when he won the presidency. After five years of falling behind in the rankings, he’s now completely struck off the list.
And that’s a conservative estimate – it could have cost him a lot more. A little-known section in the federal tax code allows government employees getting rid of their holdings to obtain a document called a certificate of disposal that can be used to avoid paying capital gains taxes. Think of it as government’s way of tricking officials into doing the right thing and avoiding conflicts of interest. However, since Trump was not subject to the Conflict of Interest Act, he may not have been able to secure the perk. Walter Shaub, who was running the Office of Government Ethics at the time Trump moved into his new role, said Forbes He would have liked to present Trump with a certificate of disposal, but it’s not clear whether Internal Revenue Service officials would have honored the document. According to Shub, Trump’s team didn’t even ask for it. “They have never shown interest in an sale,” he said.
Narrow mindedness has its price. If Trump had managed to avoid capital gains taxes, he could theoretically have reinvested $ 3.5 billion in the S&P 500 on the day he moved into the White House. In this alternative scenario, Trump would have been worth an estimated $ 7 billion by September this year, when Forbes set estimates for its annual list, enough to rank as the 133rd richest person in the country. Instead, he’s off the Forbes 400 for the first time in a quarter of a century.
SEE THE FORBES 400 LIST OF 2021