Wilbur Ross Lets His Inner Trumpian George Wallace Bigot Freak Flag Fly

/55 Comments/in , , , , , /by

The real Mr. Magoo of the Trump Administration, Wilbur Ross, this morning went on a full court press, with the press, to promote the latest push from the Trump Administration. When did the US seek out pointed bigotry and otherism on the official census? 1950. Magoo Ross and his Commerce Department issued a racist manifesto:

“The reinstatement of a citizenship question will not decrease the response rate of residents who already decided not to respond. And no one provided evidence that there are residents who would respond accurately to a decennial census that did not contain a citizenship question but would not respond if it did (although many believed that such residents had to exist). While it is possible this belief is true, there is no information available to determine the number of people who would in fact not respond due to a citizenship question being added, and no one has identified any mechanism for making such a determination.”

Actually, that is exactly what it is going to do, and what will occur. Facts and intelligence no longer matter.

From Hansi Lo Wang at NPR:

“A lot of census watchers, former census bureau directors, other census experts have said that they are very, very concerned that there already is a lot of anti-immigrant sentiment, that already folks are very concerned about giving personal information to the federal government, that now if there is a citizenship question added as the Commerce Department is announcing that … a lot of immigrants, not only those who are undocumented, but anyone who maybe has ties to folks who are undocumented, may not want to … participate in the census and therefore they would not be counted, and that has direct impacts on how people are represented in this country.

“All census numbers are used to reapportion seats in Congress, specifically the House of Representatives, and also these numbers have an impact on how billions of dollars are distributed around the country … from the federal level all the way down to the local level of how school districts figure out how to divide up resources. So this could have a really big impact if immigrants are not participating in the census in 2020.”

And thank you Vanita Gupta, in the New York Times (also reinforced in an interview with MSNBC):

“Adding this question will result in a bad census — deeply flawed population data that will skew public and private sector decisions to ensure equal representation, allocate government resources and anticipate economic growth opportunities — for the next 10 years,” Vanita Gupta, the chief executive of the Leadership Conference on Civil and Human Rights and a deputy attorney general in the Obama administration, said in a statement Monday night. “The stakes are too high to allow this. We urge Congress to overturn this error in judgment.”

Dianne Feinstein issued a, for once, spot on press release:

“An accurate count of everyone living in the United States is vital to our democracy. Adding a question designed to depress participation in certain communities is an assault on the foundations of this country.

“Given President Trump’s toxic rhetoric and aggressive policies toward immigrants, it’s clear his administration wants to include this question to discourage participation in immigrant communities. Individuals living in mixed-status households may be afraid to participate, fearing their responses would be used to target them or their families.

“This is particularly troubling in states like California with high immigrant populations. Without an accurate census, our state will lose federal funding for infrastructure, schools and social welfare programs we are rightly owed. Even more troubling, an undercount of our population could lead to California losing seats in Congress, disenfranchising millions of California voters.

“The administration’s claim that this question is needed to ‘permit more effective enforcement’ of the Voting Rights Act is simply not true. A citizenship question has not been included on the census since 1950, 15 years before the Voting Rights Act was passed. Instead, that data is already collected on the American Community Survey, a longer set of questions sent to more than 3.5 million American households every year.

“The census should not be a political football, used to depress responses from immigrant communities and target states like California. I’m committed to ensuring an accurate census in 2020 and will work with California’s leaders to have this citizenship question removed from the census.”

Yes. And it is a real issue. Not since George Wallace tried to block the schools from the minorities he hated, has there been such an immoral and unmitigated assault, for craven political purposes, as Trump and his merry band of bigot henchmen are putting forth now. It is the sickness that is killing America, not that which will make us great.

Can’t wait for the “Constitutional scholars” of the Federalist Society to weigh in with their full throated support of yet more rank Trump Administration bigotry and hatred. And some more “Liberal Media” stories about racist hicks in diners that support this revanchism. This is Trump’s America. And, yes, Vlad Putin must be chomping on popcorn and loving it.

Corruption Is The Use Of Public Position For Private Gain

/37 Comments/in /by

According to a law journal article by Zephyr Teachout, the Founding Fathers had a shared understanding of corruption.

To the Delegates, political corruption referred to self-serving use of public power for private ends, including, without limitation, bribery, public decisions to serve private wealth made because of dependent relationships, public decisions to serve executive power made because of dependent relationships, and use by public officials of their positions of power to become wealthy. P. 373-4.

Of course, the Supreme Court doesn’t see it that way. The only form of corruption the politicians on the Court recognize is quid pro quo transactions, the formal exchange of value for taking a governmental action. This view carries over to the private sector. Only rarely are there prosecutions for kickbacks or other forms of corporate bribery because the laws are spotty, and anyway, who cares? The market, whatever that is, will take care of it.

The Ryan-Trump tax bill is an excellent example of of corruption in Teachout’s sense. A number of senators received personal benefits from a provision which applies low pass-through tax rules to passive investments in real estate. This clause will not increase investment or jobs. It only benefits equity holders, including Tennessee Senator Bob Corker. For details, read the articles by International Business Times’ David Sirota. Corker and Hatch deny that they are corrupt but do not describe any benefit to ordinary Americans from the changes.

Another beneficiary of changes in the law is Senator Ron Johnson, R-WI, who owns interests in a pass-through manufacturing business and several pass-through real estate businesses. Equity holders pay ordinary income tax on it at their personal rate. Johnson announced he wouldn’t vote for the bill unless it benefited him; as well as anyone else who owned investments like his. He wanted a deduction of part of the income. Senate leadership eventually made an offer, there was bargaining, and eventually they settled on 20% of a number based on a complicated formula involving wages and capital. Just as on the real estate side, this bill is just a gift to owners of unincorporated businesses. The value of their interests will go up and their taxes will go down, and nothing will change in terms of investments in the business. Johnson’s explanation for this is not his personal wealth but the fact that business income is treated differently depending on the form of business organization. But the reason people choose non-corporate forms is the personal benefit, and Johnson doesn’t explain this crucial difference or the impact of the changes.

It isn’t only government officials who can use public positions for their personal benefit. In 2015, 58 university presidents made more than $1 million. They must be really good at raising money. Fun fact: the ridiculous tax bill provides for a 1.4% tax on income from endowments greater than $500,000 per students at schools with 500 or more students. The insufferable N. Gregory Mankiw is perturbed. I say good. At least there is somewhat less incentive to raise vast sums of money at schools like Notre Dame, which estimates its tax at $6 to 9 million. Notre Dame spent $354 million from its endowment which garnered about $1.21 billion, if I read this right.

Corporate CEOs have reached even higher levels of compensation; so of course as a group they were proponents of this sickening bill. They’ll get billions to use to pay shareholders with dividends and buybacks, and they’ll benefit handsomely from both, because almost all of them are big shareholders. They also love huge mergers, and once industries are consolidated, they raise prices in excess of costs which increases corporate income and thus their own. I wrote this about drug companies showing the details. And here’s a disgusting recent example.

I’ve focused on economic corruption, but abuse of power goes beyond economics; the most obvious arean is sexual predation. Others can do a better job explaining that kind of abuse so I’ll just leave it there.

Many of the people in positions of authority in the corporate sector, the non-profit sector and the government sector use their positions for private gain. We can speculate about the reasons for it, and debate the extent of it. Maybe it’s no worse now than before; it just seems worse because Trump is president. And of course, we aren’t all corrupt, and we aren’t all corrupt all the time. For those with some self respect or some self control, there is this sickening feeling of collapse.

I think that’s because our public discourse is so barren. We have no vocabulary for analyzing the problem, or thinking about what we need to change. We think in terms of criminal law when we talk about corruption, and not the language of duty and responsibility. Let’s stop doing that.

Corruption is the use of public positions of authority for private gain.

M&M Mars Candy, Trump and The Estate Tax Giveaway

/12 Comments/in , , , , , /by

[Ed Note: This is a guest post by our tax law expert friend Bob Lord. It is a particularized abject story of exactly what kind of interests are pushing the Trump “Tax Cuts” agenda, why, and how ridiculously corrupt and insulting to the 99.5% of America the effort really is.]

The Mars family has made billions selling us M&Ms, Snickers, and countless other Halloween treats for a century now. But when it comes to paying tax, the Mars family seems to be all tricks and no treats.

In fact, the family’s latest tax trick may have cost the U.S. Treasury a whopping $10 billion. What could $10 billion do? That’s the cost of delivering prenatal care to hundreds of thousands of expectant moms under Medicaid, an essential program that President Trump and the GOP Congress plan to cut by up to $1 trillion.

According to the current U.S. tax code, any American worth $25 billion can expect 40 percent of that, or $10 billion, to go to Uncle Sam in estate tax, the federal levy on the personal fortunes of deep pockets who kick the bucket. Forrest Mars Jr. had a $25-billion fortune when he died in July 2016. But the Mars family has apparently been able to avoid estate tax on that entire $25 billion.

How do we know? Researchers at Forbes and Bloomberg, the two business publications that track America’s billionaire wealth, have some fascinating numbers for us.

Forest Jr. and his two siblings started 2016 with personal fortunes in the vicinity of $25 billion. Now if Forrest’s fortune had been subject to a significant estate tax after he passed on, the collective wealth of his four daughters in 2017 would be substantially less than that $25 billion.

The just-released 2017 Forbes list of America’s 400 richest shows otherwise. Forbes puts the wealth of each of Forest’s four daughters at $6.3 billion, for a total of $25.2 billion. That’s almost identical to the 2017 fortunes of their Aunt Jacqueline and their Uncle John, each at $25.5 billion. The Bloomberg Billionaires Index reports similar numbers.

Should any of this surprise us? Not really. We’re seeing Mars family history repeat itself. Eighteen years ago, Forrest Mars Sr., the original Mars family billionaire, died. The Forbes 400 lists from the years surrounding 1999 show that the Mars family lost no wealth to estate tax back then either.

But the Mars family must at least be paying oodles of income tax, right? Nope. How could that be? This particular tax-avoidance story starts over a century ago, when Frank Mars incorporated his candy business.

Back then, the value of the stock in Mars Inc. had only minimal value. But over the years the stock appreciated considerably in value. By 1988, that appreciation had made the Mars family the wealthiest clan in America. The Mars billionaires still rank as one of America’s wealthiest families, in no small part because none of the gains in the value of the family’s Mars stock have ever been subject to income tax.

Is the Mars family content with its current level of tax savings? Apparently not. The family has joined with 17 other billionaire families and collectively spent $500 million lobbying Congress for reduced taxes on billionaires and the companies they run.

These companies face corporate income tax on their profits. Mars, Inc. has had to pay these taxes over the years. Unlike Mars family members as individuals, the Mars company hasn’t been able to sidestep its tax bills. But the Mars and other billionaire families have found a friend in President Trump and the current Republican-led Congress. The pending Trump-GOP tax plan would take a meat axe to corporate tax rates.

The resulting corporate tax savings, if this plan gets adopted, will likely translate into a multi-billion-dollar tax savings for Mars, Inc. — and a corresponding bump in the net worth of Mars family members.

The real prize for the Mars in the Trump tax plan? That may be in the elimination of the estate tax that the Trump White House is now pushing. Wait, what? How would the repeal of the federal estate tax help a family that’s already avoiding the estate tax?

For America’s ultra-wealthy, repealing the estate tax turns out to be more about the federal income than the federal estate tax. As Mars family history makes painfully clear, tax avoidance vehicles available under current law allow even billionaires to zero out their estate tax.

But billionaires, under current law, do pay an appreciable income tax price for their estate tax avoidance. Assets on which estate tax is avoided carry an offsetting income tax disadvantage. That disadvantage would vanish in a simple estate tax repeal.

What does that mean? Let’s say we have a billionaire who paid $10 million for stock now worth $100 million and does nothing to avoid estate tax on that stock The billionaire never has to pay income tax on that gain. Those who inherit that stock from the billionaire’s taxable estate can sell it for $100 million and not pay any income tax on the gain either.

But if that billionaire stashed that stock into a trust to avoid estate tax, he would forfeit that income tax advantage. The untaxed gain associated with the stock would be passed to the trust beneficiaries. These beneficiaries would face an income tax on the previously untaxed gain when they sell the stock.

If the Trump-GOP estate tax repeal takes the same final form as the estate tax repeal bill introduced in the House of Representatives in 2015, wealthy Americans will get to have it both ways: zero estate tax and the elimination of any untaxed gain at death.

And that would allow the next generation of Mars family members to avoid income tax on over a century’s worth of economic gain. Quite a trick, huh?

So enjoy the candy, America. The Mars family will keep the cash.

Happy Halloween!

[Robert J. Lord, a tax lawyer in Phoenix, Arizona and former Congressional candidate, is an associate fellow at the Institute for Policy Studies.]

Spaced In Time Trash Talk

/28 Comments/in , , , , , , /by

Welp, moving from KIller Trash Talk to the things that are this weekend takes a lot. Insanity abounds, and is all around. Your healthcare? Yes, that is getting screwed hard. JCPOA (the Iran anti-nuke deal) yes, that too. If it affects the world in at least semi-positive way, the current President is blowing it all up. The fact that a black man might have even touched on any subject seems to infuriate the dementia ridden sundowning asshole in the West Wing even more.

It is who and what we life forms are now. And it is sickness in every regard, domestically and internationally. Trash Talk was designed to be a refuge from such things. I just cannot anymore. So, if that is a problem, I am sorry. Hopefully we will not stand by, and will not back down, while assclowns like Donald Trump cravenly politicize even common sports entertainment to soothe the 30% base they so cherish.

Nope.

Puerto Rico is dying in their own streets. Northern California is burning. People are trying to ride out the fire in swimming pools as their houses burn around them. While the Trump Administration and GOP sit on their hands, when they are not actively trying to make the entire situation worse. The fuckers are flying on jets, flying flags and making coins in their own image.

But, hey, the NCAA is moving on. Not sure anybody thought anything different would happen in Chapel Hill. Begging the question as to what happens to Louisville, another legacy NCAA basketball program. The NCAA under the terminally lame leadership of Mark Emmert will never change.

In the pros, it is getting hard to figure who is the bigger asshole. Is it Goodell and the NFL, or is it the, at this point, ignorant scorched earth strategy of Jeff Kessler and the NFLPA? The NFLPA is making an ass of itself in trying the everything and the kitchen sink theory as to Zeke Elliot. The NFLPA had a sympathetic plaintiff, Brady, and a supremely tenuous case by the NFL based on simple physics and chemistry. But then the NFL won in the 2nd Circuit. Zeke Elliot is not an all American kid with multiple championships. He is an abusive punk from Ohio State that is lucky the NFL did not find an aggravating act from when he pulled down a woman’s blouse in public during a parade. If you think Elliot has the better case here, you don’t try cases in real courts.

The thing is, whether under federal or state law, and in this case collectively bargained law, the arbitration rules….and the rules ARE “relaxed”….and control. It is about the process, not the facts. I, and a lot of others, tried to argue in the face of this in both Brady and Peterson. Same in Bountygate prior to those two cases. Those arguments were all made in cases with far more appealing clients than a repetitive malefactor like Zeke Elliot. He will serve the suspension, it is only a question of whether he and Jeff Kessler are smart enough to do so soon, or make it later, when it will really hurt a likely playoff team. We shall see whether the NFLPA scorched earth insanity prevails over the inters of Homer Simpson, er Jerry Jones and the Cowboys.

The games go on. The Natinals really ought to still be around, but the Cubs put them to rest. The Yankees somehow overcame Cleveland. Hard to not think the Tribe was the better team, but they didn’t close the deal, and the Yankees did. That said, the conference championships look truly awesome. I think the Astros are not only a better team, but have some juice right now as opposed to the Yanks. Not betting a lot of real money on that, but I think so. The Dodgers are what the Yankees used to be. The best team that all the money in the world can buy. But Chris Hayes made a Trump for Cubs deal with the devil last year, and I hope it still holds, and the Cubs win. If we “have” to have Trump, let the Cubbies win again.

Syracuse obliterated Number 2 Clemson already. Man, that was ugly. So was the job an average Cal did on Pirate Mike Leach and Washington State. Utah at USC should be interesting. Washington at ASU here might be as well, but Chris Peterson is a light years better coach than ASU’s Todd Graham, so ASU likely to get blown out, even at home.

Back to the pros: Philly already topped the Panthers, thanks to a good game by Wentz and a horrible one by Newton. Won’t always be that way, Panthers are dangerous if they get in the playoffs. Skins host the Niners. Will Kirk Cousins be playing on the other team next year? The Pack at Vikings looked really interesting when it looked like Sam Bradford was returning. Less so now, but Case Keenum can produce and they are in Minneapolise with that damn horn they blow. I’ll take Rodgers and the Cheese, but may be a great game.

My game of the week is the Buccos at Cardinals right here in the Big Toaster. Debut of Anthony Peterson at RB for Phoenix. Carson Palmer has quietly played superb QB so far this year for the Cards….when he is not getting murdered from bad, nee atrocious, O-Line play. If Arizona’s constantly remade O-Line can gel and protect the old man, it will be a hell of a game. Not going to bet on that, but just saying. Rams at Jags might actually be interesting. Glad that matchup is, for once, not in London. Other game of the week is unquestionably Scribe’s Steelers at Arrowhead to see the Chefs. I don’t for one second think Big Ben has lost a step, even if he may finally be maturing. But I am not sure that other forces in that locker room are unified the way past Steeler teams are. This will be a HUGE game for Pittsburgh, and less so for KC. I’ll take the upset on this one.

Okay, that is that. Another week. Another dime. Another dollar. Thank you for being here, and send some love to Puerto Rico and Napa.

The “Liberal” NY Times Focuses on the Next Disastrous GOP Daddy

/12 Comments/in , , , , , , /by

It is never enough for the “liberal” media. Despite how the “liberal media” gets relentlessly dumped on and marginalized by the right wing nut machine, they are ALWAYS there to hand out some candy to the nutters.

Here are the estimable Jonathan Martin and Alexander Burns in the Only Bunk That’s Fits To Print Gray Lady:

WASHINGTON — Senators Tom Cotton and Ben Sasse have already been to Iowa this year, Gov. John Kasich is eyeing a return visit to New Hampshire, and Mike Pence’s schedule is so full of political events that Republicans joke that he is acting more like a second-term vice president hoping to clear the field than a No. 2 sworn in a little over six months ago.

Well, crikey, good that the paper of record is covering this. What else they got?

It may get worse, said Jay Bergman, an Illinois petroleum executive and a leading Republican donor. Grievous setbacks in the midterm elections of 2018 could bolster challengers in the party.

“If the Republicans have lost a lot of seats in the Congress and they blame Trump for it, then there are going to be people who emerge who are political opportunists,” Mr. Bergman said.

Well, sorry I asked, turned out it was some entitled crap from a “petroleum executive”. Great call guys!

Swell. Excellent follow up to all those “Ignorant average Trump voters still ignorantly averagely love Trump” reports that are rampant in the beloved balanced media.

Today’s GOP, fronted by Trump and his ilk, is NOT an aberration, but rather the culmination of where the Republican party has been headed for decades, since at least Reagan’s bigoted opening salvo in Philadelphia Mississippi. It is the party of nationalism, racism, bigotry, scientific ignorance and revanchism.

But, hey, never underestimate the ability of the national media to keep on singing like they don’t know their actions helped put this country in the lurch it is in (Her Emails!!). And that their continued refusal to unequivocally call out the current President for the blithering dangerous loon he is, may lead to making the lurch far worse.

The answer to America’s ills do NOT come from the discredited daddies in the GOP, whether older like Mike Pence and John Kasich, or younger like Ben Sasse. We have seen this movie before, and it sucks in a very disastrous way.

The Tuesday Night Massacre

/82 Comments/in , , , , , , , , , , /by

As you may have heard, President Trump has just fired FBI Director James Comey.

This is truly Nixonian Saturday Night Massacre level action.

Trump previously ran on, indeed got elected on, and likely only on, the scurrilous rogue comments of Jim Comey starting with the rogue July 5, 2016 press conference where Comey went off all rails on DOJ and PIN protocols. Here is the New York Times original report:

Mr. Comey’s dismissal was a stunning development for a president that benefited from the F.B.I. investigation of the Democratic nominee during the 2016 campaign. Separately, the F.B.I. also is investigating whether members of the Trump campaign colluded with Russia to influence the election.

The abrupt firing raised questions over whether Mr. Trump was trying to influence the Russia investigation. But he said he was following recommendations from the Justice Department, which criticized how Mr. Comey concluded the investigation into Mrs. Clinton.

Trump actually saluted Comey for this at one point. What a micro-moment self serving, not to mention narcissistic jerk.

If anybody in the world thought that that Trump is not as craven and against the Constitutional form of government we all were born and raised on, let that no longer be a question.

And if the media cannot get their heads out of their asses and realize the danger is NOT just to their First Amendment rights, but to the core of our republic and democracy, then they too should go the way of the dodo bird.

The foundations of this cowardly play were always there if you followed the ever changing voice and words of Donald Trump regarding the Clinton email issue and how the Department of Justice handled it.

If you thought this point, and/or Comey was the one only voice that could not be fired or silenced, you are sadly mistaken.

This blog has never, and I am being kind across my writings, Marcy’s and those of our departed friend Mary, been a friend of Jim Comey. He has long, and more presently, been an uneven and self serving voice mostly interested in preservation and enhancement of his own voice and position. Comey has been preternaturally successful at this.

That said, tonight I will be in Comey’s camp. I await what my friends at Lawfare and some others may have to say regarding the Tuesday Night Massacre.

Because this is a day that should live bright for a very long time.

People glibly talk about the “Resistance”. How naive. The battle is now, and has been joined in full by a cabal that makes Nixon look like a piker. The place is here. The time is now.

The temporal fact that it is Comey that tipped a scale of justice is immaterial. It has happened.

Ask Uncle Ed 3A

/28 Comments/in /by

Dear Uncle Ed*,

I’m a moderate Democrat living in a nice suburb of Philadelphia. My family and I are members of XX Presbyterian Church, PCUSA, where I sing in the choir. Quite a few members of the choir are Republicans, and it seems that almost all of them voted for Donald Trump, as did a majority of the non-singing members. This has made me very sad and also angry. I realize we don’t have to talk about politics, and really in the past we haven’t much, though I wish I had done more. Since the election I can hardly stand to be around them. But I love singing in the choir, and I think the Church does some good in the community. I’ve been seriously thinking about leaving the Church. What do you think?

Signed, Sad singer.

Dear Sad Singer,

Uncle Ed has twice written responses to people he doesn’t know, people he doesn’t live near, people whose lives he hasn’t lived, people whose education and training and life experience are completely different from Uncle Ed’s own life. This one hits close to home. Uncle Ed has similar experiences, though from a different bizarre Presidency, that of Bush 2. Many of the members of the Church at which Uncle Ed sang for over 20 years were business people or professionals; all were well educated, bright, and almost all had money. A solid majority were reasonable Republicans, people whose politics Uncle Ed didn’t share but at least could understand. Uncle Ed saw them as friends, if loosely. And they voted for Bush. So this is a tough question for Uncle Ed. There are two possibilities. You could leave, covered in this post. Or you could stay, covered in the next,

This is a common problem. Democrats and Republicans serve in civic groups, volunteer in community service groups, participate in trade groups and professional groups, help out in kid sports, and live in the same neighborhoods. In the past this hasn’t been a real problem. It’s easy to serve, as Uncle Ed did, on the board of an opera company with lots of Republicans. We didn’t talk about politics. We talked about opera and how to encourage people to come to our productions. In social settings we talked about sports or travels or investments or just about anything besides politics.

That doesn’t work any more. Voting for Trump feels like a betrayal of a shared concern with the future of the country and of our children and grand-children. How could anyone vote for that seething pile of ignorance, intolerance and narcissism? How could people you know and respect, people who have benefited from our economic and legal systems, vote for him.

The central question is how you can continue to sing. Are there Churches near enough that sing the kind of music you enjoy and would meet your spiritual needs? Are there other choirs you could join that sing different music but that you would enjoy, so that you could move to another Church that would work for you?

The first step is to get together with other people in the choir and maybe other friends in the Church who have similar concerns. In Uncle Ed’s experience, singers as a group are more liberal than other people you know at Church. Maybe you can ignore the Trumpists and hang out with the sane people. What are their thoughts? Are you overreacting? Is there some concerted action you could take that would make staying possible? And if you are leaving, where are you going?

If you decide to leave, the next step is to talk to the Choir Director and explain. You may be surprised by the response. Many Church musicians are much more liberal than the congregations they serve. The leader may be able to help you find another Church or choir, and may have sensible advice based on knowing you and your role in the Church. In any event, you won’t want to leave the Choir Director wondering where you are.

You also must think about the time to leave. You don’t want to leave too close to a big service, like Easter or Reformation Sunday or before the choir sings a major work. That wouldn’t be fair to the Choir Director and the other singers.

The next question is what you say to your friends and acquaintances at Church. In normal circumstances, Uncle Ed would point out that you shouldn’t burn any bridges, that you may need these people in the future and therefore you should go quietly. Later, when they notice you are gone, they may ask, but more likely they won’t. Especially if a group of people leave, others can work it out if they care, which they probably don’t.

These aren’t ordinary times. People who don’t see that Trump is a horrid person and a horrifying president, especially after the press conference of February 16, are not fit co-workers. Their judgment cannot be trusted, and their common sense has been overwhelmed by some psychological disturbance. Uncle Ed would rather starve in the street than ask them for anything.

You may not want to, but you have to say something. If you want to be marginally polite you could say something like: I feel awful about what’s happening in this country with Trump, and I’ll feel more comfortable with people who feel the same way. It’s simple and true, and tilts the balance of feelings towards you, so that the other person is unlikely to be too offended.

Uncle Ed would probably be more direct: Trump is everything I despise. It’s not his policies, such as they are; policies always change. It’s that he is mentally and emotionally unfit to be president. Trump is the is the antithesis of every value I hold. I don’t want to offend people who think he’s just fine, so I’m leaving.

Uncle Ed is pretty sure he wouldn’t say: I don’t want to be around Republicans any more. But he’d be thinking that. And he knows some people to whom he would say just that.

=====
* This is one of an occasional series in which I try to come to grips with the Age of Trump. Sad Singer’s letter is based on my personal experience in a volunteer choir at a PCUSA church, and in other singing groups that included a substantial number of conservatives. By extension, it applies to other groups where sane people have to deal with Trump voters.

Ask Uncle Ed 3B

/19 Comments/in /by

This is a continuation* of Uncle Ed’s response to Sad Singer regarding continued participation in a Church choir full of Trump voters. In Part 3A Uncle Ed considered the possibility of leaving.

Dear Sad Singer:

Uncle Ed knows that leaving may not be possible and it may not be what you want to do. Here Uncle Ed offers ideas out what to do if you decide to stay.

Uncle Ed suggests that you first rethink your definition of “friends”. Before the 2016 election, you probably considered as “friends” most, if not all, of your co-workers, the people you know at Church, the people you work with on civic projects or in community groups or Little League. The connotations of that word made it possible to ignore aspects of people that you didn’t care for or even accept. Cooperating on a project, just like being on a team, smoothes over significant differences. In our minds, we distinguish this kind of friend from the categories of close friends, or personal friends.

Uncle Ed thinks that’s not a good definition now. We aren’t friends with people just because we have to work with them. You might decide to cooperate with choir and church people you don’t like or respect. But they will never be your friends. You have to keep them at arms length to protect yourself.

You mention that you wish you had talked more to people before the election. Uncle Ed is certain you are not at fault. There are norms of behavior in your church and in your choir, and talking about politics is almost certainly off limits. Uncle Ed has 25 years of experience in choirs and choruses, and each has its own unspoken rules. For example, in one singing group, arguments about politics were common. No one’s mind was changed, but the exchanges gave Uncle Ed insights into the thinking of conservatives and fundamentalists that Uncle Ed would not have had in his workaday life. In other groups, the conversations were more mundane, and more fun. Raising politics would have bored Uncle Ed’s friends (and these people were friends) stiff. If Clinton had been trailing in the polls, you might have felt forced to act differently, but there was no reason for you to think she wouldn’t win, and thus no reason to even consider violating the norms.

In the prior post, Uncle Ed urged you to get together with like-minded choristers and others from the Church to talk about what to do. That’s the first step if you decide to stay, too. Here are some things to consider.

1. Sane Republicans knew before they voted for him that that Trump is a bully, a narcissist, a racist, a misogynist, an anti-Semite, that he is bad at business and that he is vulgar and ignorant. They must have come up with reasons to vote for him in spite of this knowledge, and Uncle Ed is pretty sure those reasons begin with Democrats are evil, and Hillary Clinton is the Devil. It might have been emails, or some other fake scandal, or her slight turn to the left during the campaign. Maybe they didn’t think Trump could win, so it was safe to vote for him. Maybe it was some Republican policy position like lower taxes on themselves, smaller government, fewer regulations, abortion, guns, who knows.

Now they see him flailing in surreal press conferences, all his neuroses on display. They watch him installing Dr. Strangelove characters and white nationalists and other dregs of society into high government positions, instead of the nice Republicans they respect. They see the ridicule heaped on him around the world, and the way other nations respond to his incompetence and boorishness. They must be experiencing a sickening case of buyer’s remorse. Your goal is to figure out how to exploit that buyer’s remorse and persuade the sane Republicans to vote for Democrats in the mid-terms, or at least not to vote for Republican legislators. That would create a check on the worst instincts of Trump, and keep him from wrecking the country.

2. Do not discuss Clinton. Don’t say she would have been a better choice, don’t explain her policies or talk about how foolish she made Trump look in the debates. If someone else raises her, say something like: You would never have had to defend her intelligence or her knowledge or her mental stability. She would have done things you didn’t like but she wouldn’t embarrass you like Trump does.

3. listen closely to the things about Trump they make them nervous and push those ideas harder than they do. For example, many Republicans are worried about Russia. Don’t rant. Agree with them with short sentences that they can hook onto and expand. If they don’t expand, then you do, again with short sentences. If you read Emptywheel you know more about this than they do. Use that information to increase their concerns.

Mention the Saturday Night Live skits with Trump and Putin. Talk about the late night mockery of his stability in minor things like losing the first round of the lawsuit over the travel ban, or Nordstrom dropping Ivanka’s line. Ask how he will deal with the Russians if they provoke him. Mention the unknown relations between Trump’s businesses and Russian banks and Russian partners. Eventually point out that If we had Trump’s tax returns we’d know for sure. Keep your side of the conversation short.

4. There are many rich Republicans who viscerally hate liberals. For them, Uncle Ed suggests a different approach. Don’t talk to them at all. If you can’t avoid talking and can’t avoid politics, use words like vulgar, tasteless, boorish, common. Say those words with the sneer your mother used when she caught you picking your nose. Sneering puts them in the position of defending him, which they won’t, and should end the discussion. Don’t leave. Make them walk off.

5. Any effort to act on these ideas will violate the norms of the choir and the Church. It has to be done. Normal people cannot pretend that Trump is a normal, and that this is just a routine change in government. He isn’t normal. This isn’t a normal government. Nothing can be the same including personal relationships. And they are at fault, not you.

======

* This is one of an occasional series in which I try to come to grips with the Age of Trump. Sad Singer’s letter is based on my personal experience in a volunteer choir at a PCUSA church, and other singing groups that included a substantial number of conservatives. By extension, it applies to other groups where sane people have to deal with Trump voters.

Ask Uncle Ed 2

/16 Comments/in /by

Dear Uncle Ed*

I’m a white working class guy. I voted for Trump because I don’t think that government should help undeserving people. Especially women who pop out babies like Pez dispensers with different baby daddies so they can get welfare every month and their housing and food paid for. They are living large, while people like me are struggling to put food on the table. My neighbors who are less responsible than me are receiving nearly free insurance through Medicaid. They can go to the emergency room for a headache.

This has nothing to do with race. So, why do all the liberals just assume I am a racist? I just want to be treated fairly and have my hard work acknowledged.

Signed, Unhappy in Iowa**.

Dear Unhappy in Iowa

For starters, when you talk about women popping out babies with different baby daddies, it sounds like you mean African-Americans, just like Ronald Reagan did with his fables about strapping young bucks buying T-Bones with food stamps. This kind of talk makes it hard for Uncle Ed to completely ignore the possibility that maybe there is just a bit of racism here.

But since you don’t think it’s about race, you could use different words. Just think of the people in your extended family and your neighbors who benefit from those programs. Use language that is based on them instead. After all, the majority of people getting food stamps, welfare and Medicaid, and even Obamaphones, are white.

We probably agree that there are plenty of people who need the welfare system to work for them, like this woman whose body is broken after years of grinding labor.

Resident Christa Cossey found work at age 20 as a long-haul truck driver, a well-paid job for someone without a college degree. Now 51, she’s been on disability since 2008 because of ailments related to her years of driving: obesity, asthma, atypical chest pain, diabetes, fibromyalgia, high blood pressure, and arthritis in her neck, shoulders, elbows, wrists, and fingers. She also suffers from degenerative disc disease, degenerative joint disease, and bulging discs in her lower back.

We also agree that too many people abuse the system. And you know as well as Uncle Ed does that every system can be and is abused. But let’s be honest. Some of the people abusing the system are your kin and your white neighbors. It isn’t just Black and Brown people.

Uncle Ed has another suggestion. Next time you go by the food court, look at the people cleaning up the tables and emptying the trash cans. Next time you see a garbage truck, look at the guys picking up that nasty stuff and muscling it into the truck. Next time you visit your grandmother in the nursing home, look at the aides who wash and dress her, who turn her over, and who hold her hand when she’s crying and you can’t be there. See how many of them are Black and Brown.

Ask yourself this question. Do you think these hard-working people aren’t just as angry as you are about the people in their own communities abusing the system? Do you think they don’t have family and friends who are on disability thanks to a cheating doctor? Don’t you think it makes them furious when they see white people cheating the system?

It’s true they probably don’t like the same TV shows you do, or the same music or the same movies or go to the same churches, bars and restaurants you do, and they don’t support the same politicians you do. Of course, they probably root for the same teams you do. But when it comes to money, they work hard and they care just as much as you do how the government spends their taxes. If it weren’t for that color thing that keeps you apart, they’d be your natural allies. Trump frequently asked them to vote for him on that basis, and a lot of them did, so you know that’s true.

The stuff you are complaining about isn’t about race. It’s about who works and who doesn’t. Don’t make it about race or you’ll lose your natural allies.

Uncle Ed suggests you look at the big picture: the overall economic system that’s beating you and your allies into the dirt, and that hasn’t given you or any other working guy a decent raise in decades. At root the things that got you to vote for Trump aren’t about race, they’re about an unfair economic system that forces millions of people to struggle to make any kind of living and abandons them when they get sick or get laid off when the plant moves to Thailand. It’s a system that serves you and your neighbors and your kin badly, and wallops Black and Brown people even harder. You need all the allies you can get.

You say that the current safety net gives undeserving people something you don’t get. For example, you have to pay for a lousy health policy while they get free Medicaid that’s probably better. When the Republicans repeal Obamacare, do you really think the replacement will be better for you? You know it won’t: you aren’t rich. Maybe secretly you hope the Republicans will set up a plan that gives you something other people don’t get?

Well, here’s the thing. There are never ever going to be any government programs or regulations or loopholes that give you something while denying it to groups you don’t like. That is unconstitutional. Even Trump can’t make that happen. I can promise you that the Coastal Elites will crush any attempt to do that in the courts, no matter how many Justices Trump appoints.

You have two choices. You can let the Republicans destroy the safety net that protects you and the people you think are deserving.

Or, you can figure out a way to do politics in your own interest without regard to who else might benefit, and at the same time limit the cheating.

For example, suppose everyone got Medicare at fair and reasonable premiums, maybe related to income, and you could buy private insurance to cover whatever Medicare didn’t. Our income taxes might go up to cover the cost, but the rich would pay more and that that would be fair. We’d probably have to do something more for really poor people. Whatever plan we come up with, everyone, regardless of merit, is going to be covered. That would get rid of most of the cheating.

One thing is for sure, you’ll find lots of allies among the African-Americans and Hispanics who want the same thing. With them and the liberals, you are a huge majority of voters. And that’s how you get what you need from both political parties.
=============
* This is part of a series in which I try to take Trump voters at their word and work out ways of responding. After I wrote the first draft, I ran across this essay in the Washington Spectator by Matt Hartman that clarified my thinking, and the current draft tries to reflect the ideas in that article.

** Closely follows this Washington Post article by Catherine Rampell, and this one by Sarah Kliff at Vox.

Is Trump’s $915 Million Tax Loss Connected to an Exotic Tax Shelter?

/43 Comments/in , , , /by

293015Guest Post by Robert J. Lord

The news is out about Donald Trump’s $915 million of tax losses.

The real question is whether those losses were real economic losses, or just a tax artifice created by a clever planner.

Real estate developers like Trump benefit tax-wise from provisions that allow them to claim losses attributable to borrowed money. But those provisions are not a complete giveaway if the borrowing ultimately is repaid.

If the borrowing is not repaid, as we know to be the case of Trump’s casino debt, the tax law generally requires the person whose debt is forgiven to recognize income, which typically erases the tax benefit of those earlier losses. Even in those situations where debt forgiveness does not result in income, the borrower’s tax attributes are reduced by the amount of debt forgiven, and unused losses are at the top of the list of those tax attributes to be trimmed.

Could Trump have figured out how to have his cake and eat it too – that is, keep his losses for tax purposes, even while being excused from having to repay the borrowed money on which those losses were based? Yes, it is possible!

One possibility is that Trump’s lenders agreed not to expressly forgive Trump’s debt, but instead to sell their rights as lender for pennies on the dollar to an individual or entity close to Trump, such that it would never be enforced. This strategy is referred to as “parking” the debt. Some tax professionals like John Hempton at Bronte Capital and commentators like Josh Marshall at TPM have speculated this is the artifice Trump and his advisors engineered to preserve Trump’s huge losses and thus shelter close to a billion of future income from tax.

Does the tax law permit the parking of debt that effectively has been forgiven? Certainly not by design. If Trump parked the debt with a close relative, the tax code would have treated it as if the debt was forgiven.

Trump could have parked the debt with someone not so closely related or with a friend, but not if had an agreement that said person would not enforce the debt. Which means he’d be at severe risk, as the person could turn on him and enforce the debt. That would have been almost a billion dollar risk. It is hard to imagine Trump, his accountants and attorneys permitting that.

Could Trump have parked the debt with a corporation, trust or partnership he controlled? In a word, yes. Congress tried to prevent debtors from circumventing the law this way as well, but they inadvertently created a small crack in the law, which Trump just may have been able to squeeze through.

The tax code expressly identifies corporations, partnerships and trusts deemed too close to a debtor to purchase his debt without causing the debt to be deemed forgiven for tax purposes. Those rules were well written. After they were written, however, and not long before Trump faced his financial difficulties, Congress created a new type of entity for tax purposes only, the “real estate mortgage investment conduit,” or REMIC. Those rules state, in no uncertain terms, that certain partnerships, corporations and trusts become something else for tax purposes. They are expressly NOT to be treated as partnerships, corporations or trusts. Thus, unwittingly, Congress created a gaping yet little noticed hole in the rules that prevent parking debt with a controlled corporation, trust or partnership.

And Trump may have seized on Congress’ mistake.

The REMIC rules were enacted in 1986 to facilitate investment in mortgage-backed securities (yes, those securities that crashed the economy in 2008). A REMIC is a partnership, corporation or trust under the law of the state in which it is formed (usually, Delaware) that holds almost exclusively interests in mortgage debt, and satisfies a few additional statutory requirements related to the type of ownership interests (for example, corporate stock, partnership interests, or beneficial interests in a trust) it issues.

Congress anticipated that REMICs would hold entire pools of mortgage interests, but never specified a minimum number, which means a REMIC might hold only one mortgage – for example, the mortgage on a Trump casino – and still qualify. Or it could be multiple similar obligations.

A few clever tax lawyers realized that by qualifying a partnership, corporation or trust as a bastardized form of REMIC, they could circumvent the rules that prevent the parking of debt with a controlled entity to avoid debt forgiveness income.

Trump’s situation quite clearly lent itself to this exotic strategy. If he used a REMIC he controlled to purchase the mortgage debt on one or more of his casinos (and/or other properties) at a deep discount, the rules that prevent debt parking would not have applied to him.

The bottom line: Trump indeed could have used a debt parking strategy to preserve close to a billion dollars in losses for tax purposes even though he avoided the economic loss on which those tax losses were based.

Did Trump employ this strategy? Nobody knows yet, but it would explain why those losses still showed up on his tax return in 1995 and how he gamed the system for an enormous tax windfall.

The secretive and shady nature of whatever avoidance scheme Trump has used, which would clearly be on the edge of legality, even if putatively legal as Trump claims, would also very easily explain why Trump steadfastly refuses to make public any more of his tax return information.

It is also exactly why the public is entitled to see his convoluted machinations and judge for themselves his honesty. And, remember, all statutes of limitation, both criminal and civil, have long ago expired as to the 1995 and surrounding years tax returns. There is no legitimate reason whatsoever Trump cannot release them. Other than fear that what he is hiding is exposed.

Robert J. Lord, a tax lawyer and former Congressional candidate, is an associate fellow at the Institute for Policy Studies. Bob previously served as an adjunct faculty member at the Arizona State University School of Law. Bob’s work focuses on the relationship of tax law to inequality. He contributes to both the Inequality.org website and to OtherWords, the Institute’s national syndicated editorial service. Bob also is a staff member at Blog For Arizona, the leading political blog in Arizona.