By Cody Laska,
Money and Investing Writer
Continuing with the theme of surprises which seemed to consume the presidential race all the way up to election night, President-Elect Trump has decided to decline the $400,000 per year presidential salary; joining John F. Kennedy and Herbert Hoover as the only presidents in our nation’s history to choose not to take compensation.
While Mr. Trump cannot entirely refuse the salary, as outlined in US Code 3 § 102 –Compensation of the President, he can follow in JFK and Hoover’s footsteps and donate it to a charity of his choosing.
Or even repeat what former president Obama did and return a percentage to the treasury; as a reserve currency to compensate federal workers in the event of a government shutdown.
Trump supporters view this as a noble move by the president elect; an already wealthy man deciding to decline a salary to make himself truly a servant to the public.
To the more cynical citizen, this move is seen as an attempt to reconcile some of the more inflammatory comments made on the campaign trail and in his time previously spent in the private eye.
However, to the Never-Trumpers this move can be observed as an attempt to continue dodging taxes; as was a major criticism in the months leading up to the election.
This simply cannot be the case as the president still follows the same income tax laws as the regular US citizen. All salary that is donated is taxed as regular income tax but can be written off as a deduction.
If it is flat out refused and not in Mr. Trump’s possession at any point in time, it is still taxable. According to tax code 26 CFR 1.451-2-2 Constructive Receipt of income: “Income although not actually reduced to a taxpayer’s possession is constructively received by him in the taxable year during which it is credited to his account, set apart for him, or otherwise made available so that he may draw upon it at any time, or so that he could have drawn upon it during the taxable year if notice of intention to withdraw had been given.”
In summary: if an individual has access to the money at any point to spend on what they so choose, it is still susceptible to being taxed.
When Mr. Trump steps into office January 20th, he will be the wealthiest president in our nation’s history surpassing the singularly owned wealth of George Washington adjusted to $525 million in today’s dollars and even the immense family fortune of the Kennedy’s.
In the most recent estimate from Forbes, Mr. Trump’s personal net worth is $3.7 billion; accumulated through his ownership of real estate, hotels, golf courses, casinos, a fragrance brand, model management firm, TV production agency and a private jet leasing business.
Only time will tell if President-Elect Trump will follow through on his word and, if he does, what charities will be receiving these funds.
A version of this article appeared in the Tuesday, November 22nd print edition.
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