President Donald Trump, left, insisted during Tuesday's debate that he paid "millions of dollars in taxes," prompting former Vice President Joe Biden to demand, "Show us your tax returns." (AP Photo/Patrick Semansky)
Fox News host Chris Wallace, who moderated the debate, repeatedly asked Trump if he paid only $750 in federal income taxes in 2016 and 2017, as detailed in a Sunday report published in The New York Times, which was based on a review of 20 years of his federal tax returns and financial documents.
"I paid millions of dollars in taxes, millions of dollars of income tax," Trump said, disputing the newspaper's account by saying he paid $27 million and $38 million in income taxes in past years.
Biden shot back, "Show us your tax returns."
Trump said it was the tax laws that allowed him to avoid taxes when he worked as a private developer. He said tax law changes made during the Obama administration allowed him to use depreciation and tax credits as he worked on buildings like the Old Post Office in Washington, D.C.
Biden charged that Trump pays less taxes than a school teacher because of the tax code, saying the president thinks evading taxes makes him smart. He attacked the president's handling of COVID-19, the respiratory illness caused by the novel coronavirus, saying that billionaires have made more than $300 billion during the crisis because of the wasteful Republican tax cuts that Trump supports.
"He does take advantage of that tax code, but that's why I'm going to eliminate the Trump tax cuts," Biden said of the Tax Cuts and Jobs Act
. "We're going to make sure that we invest in the people who in fact need the help out there."Wallace asked Biden whether the economy would suffer if he imposed $4 trillion in taxes over the next decade on corporations as well as individuals earning more than $400,000 yearly.
Biden said he wants to raise the corporate tax rate to 28% from 21%, citing the 91 Fortune 500 companies that "don't pay a single penny in tax" while making billions of dollars in profits.
Rather than harming the economy as it emerges from a recession, his tax plan would create 7 million jobs and $1 trillion in economic growth, Biden said. The former vice president added that the federal government would be tasked with spending about $600 billion per year on products from American businesses, such as steel, ships and buildings.
As evidence of his economic accomplishments during the crisis, Trump cited the restart of the Big 10 college football season and the reopening of restaurants. He said the stock market is an indicator of how the economy is faring under his administration.
The president said Biden and former President Barack Obama had the slowest economic recovery since 1920, while he has presided over a rising stock market that signifies job growth and higher 401(k) retirement plans.
"If you got in, if you ever became president with your ideas, you want to terminate my tax, my taxes, I'll tell you what, you'll lose half of the companies that have poured in here," Trump told Biden.
The New York Times reported that Trump has repeatedly used business losses to negate potential tax liabilities throughout his career as a real estate developer and celebrity entertainer. The somewhat routine maneuver of using net operating losses in either a retroactive or prospective manner has meant that for many years, Trump paid little or no federal income taxes, according to the newspaper.
The New York Times showed that the IRS is disputing a nearly $73 million tax refund Trump claimed and received in 2010.
Trump has maintained since his first presidential campaign that he couldn't release his federal tax returns while they are being audited by the IRS. For more than a year, Trump has battled efforts by Manhattan District Attorney Cy Vance in New York federal court to get his personal tax returns and business records from the accounting firm Mazars USA.
Treasury Secretary Steven Mnuchin has also denied a request from House Ways and Means Committee Chairman Richard Neal, D-Mass., to provide six years worth of Trump's individual and business tax returns. Mnuchin's denial also led to litigation, which is currently before a D.C. federal court.
In preparation for the debate, Biden and his vice presidential running mate Sen. Kamala Harris, D-Calif., released copies of their 2019 federal and state tax returns.
Biden and his wife, Jill, a professor at Northern Virginia Community College, had taxable income of $944,737 and paid $299,346 in federal taxes, according to their return. The Bidens received a tax refund of $46,858.
Harris and her husband, Doug Emhoff, a Los Angeles entertainment lawyer, reported $3,018,127 in taxable income on their 2019 return and paid $1,185,628 in federal taxes. Harris and Emhoff had a tax bill of $432,205.
--Additional reporting by Joshua Rosenberg, James Nani and Dylan Moroses. Editing by Haylee Pearl.
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