• The Taxman as Progressive Hero: The Latest Trump Prosecution

    July 17, 2021 // 1 Comment »

    Political prosecutions are not new in America but political pograms are. It is sad to watch the Democratic party embrace such third world practices as policy. It is sadder to note there has never in history been a more sustained yet unsuccessful effort to oust or destroy one man.

    Even before Donald Trump took office Democrats claimed Russia elected him, the Manchurian Candidate. The intelligence community-Democratic Party-media tripartite axis then swung for the fences, using wiretaps obtained through FISA fraud, honeytraps, Australian and Israeli cutouts, intel scrubbed by GHQ, and every other trick in the spy biz.

    They came up so empty-handed even a Deep State O.G. like Robert Mueller could not find anything indictable. Mueller is a forgotten hero, knowing he had nothing and willing to let his legacy be just that, a fade to black, rather than be remembered as the guy who took a dump on the rule of law. You won’t see such courage in failure again; keep reading.

    Despite their beat down over Russiagate’s failed putsch, post-Mueller the Democrats almost immediately set out to impeach Trump on much of nothing. An anonymous whistleblower was planted and then dug up among the intel community, and impeachment hearings kicked off with the speed of a pre-fabbed garage erection. A long string of State Department clones and one sad-sack warrior-bureaucrat basically said they didn’t care for Trump’s Ukraine policy, so let’s impeach him. The whole thing collapsed because a) there was no impeachable offense and b) the more Democrats rooted in the sty for evidence against Trump the more they kept ending up with the Joe and Hunter Biden Ukraine scandal in front of them.

    Not content with one failed impeachment, the Democrats impeached Trump a second time, as a private citizen after he had left office. The set up was to exaggerate unorganized vandalism at the Capitol on January 6 into a full-on coup attempt. Left out was that the vandals had no path whatsoever to overturning the election, were quickly chased out of the building, and just went home. The faux Reichstag moment was then pasted onto Trump’s back like a Kick Me sign in full defiance of the speech-as-incitement rules set by the Supreme Court. A silly show trial failed again.

    In the background were political prosecution attempts so pathetic they never made it to full-failure: the Emolument Clause cases, Stormy Daniels, all things Michael’s Avannati and Cohen, E. Jean Carroll’s rape-cum-defamation case, that one so egregiously lousy even the Biden DOJ took Trump’s side, 25th Amendment shenanigans, plus all the sideshow accusations against Trump family members, including incest. The Southern District of New York leading the current case already failed in 2012 to indict Trump’s children and failed to prosecute Paul Manafort. All the smoking guns fired blanks.

     

    But why quit now? The state and city of New York just filed criminal fraud charges against Trump CFO Allen Weisselberg and the Trump Organization for failing to pay taxes on fringe benefits such as lodging and transportation offered to Weisselberg. Most of the alleged acts took place years ago, before Trump was even president.

    Feel bad for the poor CNN intern whose weekend was ruined after being told to read through New York tax code and “look for dirt.” What he’ll find is a complex mess of taxable and non-taxable fringe benefits. For example, a company car is not taxable when used for business trips but is taxable, on a per mile basis, when used to commute.  You’re supposed to keep records. That of course is unless you elect to use the ALV rule, or if the fair market value exceeds set amounts in the year the vehicle was assigned. Imagine the jury spending days sorting this out only then to also be asked to assess intent; did the Trump Organization intend to commit criminal fraud by mistakenly applying the cents-per-mile standard instead of the ALV? No proven intent means no criminal conviction. And when you’re done with that, members of the jury, move on to the equally dense text covering fringe benefits such as lodging, tuition, and parking.

    The sad thing is all of this is usually dealt with via a tax bill and perhaps an administrative penalty — the point in every previous (non-Trump) case was simply for the state to collect the tax revenue owed. Even NYT admitted it is “highly unusual to indict a company for failing to pay payroll taxes on fringe benefits alone.” But in this case and this case alone prosecutors went further, criminalizing the affair claiming it was intentional fraud. That raised the specter of jail time, and sent the case into the headlines where it was supposed to be for maximum political impact.

    As for the jail time, that is designed specifically to pressure the only person actually accused of anything here, Trump accountant Allen Weisselberg, age 73, to trade dirt on Donald Trump for leniency in his golden years. Amid all the tiresome Godfather cliches is the certainty there has to be more, and that Weisselberg knows everything. For those tracking third world touch points, ask yourself how that all looks, the full power of the government being screwed against the aged Weisselberg for the sole purpose of coercing him to testify against his will. If they’d used wooden clubs to beat him instead of law books we would call it torture, Gitmo-style: You must know something and I’m gonna beat you until you tell me.

    That one of the key prosecution witnesses is Weisselberg’s son’s now-divorced acrimonious wife is only where questions raised will begin. The defense, in explaining the blatant political nature of the case, will no doubt ask why here and why now. Some of the alleged infractions go back 15 years. Why didn’t the state, or the IRS, uncover any of this during all that time? The IRS has had the Trump Organization under audit since 2010 yet somehow never noticed a thing? Why is this prosecution only happening at the state level in Democratic New York, safe from the federal level where it could more clearly backfire on Biden? And by the way, did multi-millionaire Trump CFO Weisselberg himself sit down each year with a copy of TurboTax to do his own taxes? If not, why isn’t his accountant on trial? The uber question of course is since these tax cases have to everyone’s knowledge solely been handled as administrative matters in recent memory, why in this case alone are criminal charges stacked on?

    Of course since this indictment is the result of over a year of investigation by both state and city attorneys general and involved two trips to the Supreme Court, the amount of money in question must be H-U-G-E. Except it is not. The government says the total amount of undeclared benefits over a 15 year period is $1.7 million. Assuming it is all truly taxable, at a 20 percent tax rate that’s $22k a year. To rubes like you and me it sounds like a lot but seriously friends, it is not. Democrats are also counting on voters to agree there is no crime in New York otherwise deserving of the resources used in this case.

     

    Of course the MSM is a twitter claiming this is just the tip of the iceberg, that Weisselberg with flip, the walls are closing in, etc.  Don’t believe it. You heard all that before with Russiagate and two impeachments and it amounted to zilch. And as with Russiagate, if the prosecutors actually had something real to work with (i.e., Trump was a Russian spy, here’s the evidence) they would have led with that, not some piddle of a complex tax case. But Al Capone! Yes, mobster Al Capone went to jail on tax evasion, but that was based on his failing to file any Federal taxes at all for eleven consecutive years on income fully illegally obtained to include murder for hire. Not quite the same thing here.

    In the end the “jury” which really matters here is not the one who’ll like assign some sort of tax penalty against Weisselberg. The real jury will be the voters, because even if Trump does not run he will be a kingmaker. There are of course those True Blues who live to see Trump disemboweled on TV by progressives wearing George Floyd masks and celebrate any misfortune. But if purple voters come to see this prosecution as petty and vengeful, realizing the offenses occurred long before Trump was president and were overlooked until they could be used as political cudgels, the risk is in making Trump a martyr.  Wait for him saying at his next rally “I told you they were unfair and now look at this.” Meanwhile Dems are trying to make a people’s hero out of… the taxman? Coupled with Biden’s crumbling agenda, it is a bad spin heading into midterms. Trump is not going to jail and anything less than that makes him stronger.

    This level of paranoid vengefulness is scary, a sign a portion of the electorate’s critical thinking skills have been eaten by political syphilis. The Democrats should carefully consider the secondary effects of their actions, and ask (as voters will) if the goal is law enforcement or a political kill shot. If it is the latter, they better not miss again. This trial is potentially one of the most divisive acts of modern American politics.

     

     

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    Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.

    Posted in Biden, Democracy, Trump

    Another Way the Rich Get Richer: Their Parents Give Them Obscene Amounts of Money Nearly Tax-Free

    May 13, 2016 // 14 Comments »

    money


    It’d be great if we were all self-made men, like Citizen Trump.

    Of course, his self-making, like that of many wealthy people, is based in large part on a wealthy parent giving him a ton of money. Why work for a living when you can just hang around drinking single malt until daddy dies and leaves you his money?

    Trump’s papa left an estate valued at between $100 and $300 million in 1999. A nice start for a career in real estate for Don and his siblings.



    Getting All the Monies

    Now the idea that parents should be able to leave their money to their kids is all A-OK. That the hyper-wealthy can do it with little or no significant tax is not OK. It is one of the prime drivers of future economic inequality in the U.S. Absent a change in the law that will happen when pigs fly into a snowy hell, rich kids will only get richer, and then pass on their buckaroos to their heirs. They’ll have all the monies.

    In the words of one economist, even though the American dream is pulling yourself up by your bootstraps, we’ve made ample room in it for people whose boots are handed down.



    How Estate Taxes Work

    The first $5.43 million per heir is fully exempt from any tax. Spread the money around to siblings, spouses, kids and grandkids, and you can shield a bundle from tax easily. In fact, that system means 99.8 percent of all estates owe no estate tax at all. There is no reason the exemption has to be $5.43 million except to favor the wealthy, and there should be an overall cap on how much can be shielded from tax to prevent fake families from splitting things all up.

    For the small number of estates actually subject to some taxes, those taxes of course are due only on the portion of an estate’s value that exceeds the exemption level. So, a $6 million estate would owe estate taxes on only $570,000. Except that heirs can often shield a larger portion of the estate from taxation through deductions, loopholes and discounts written into the tax code. So, while the on-paper tax rate for estates is 40 percent, most pay about 16 percent in reality.



    It’s Complicated

    As an example of the complexity of estate planning-tax avoiding available to the rich, consider the grantor retained annuity trust. The estate owner puts money into a trust designed to repay the estate the initial amount plus interest at a rate set by the Treasury, typically over two years. If the investment — typically stock — rises in value any more than the Treasury rate, the gain goes to an heir tax-free. If the investment doesn’t rise in value, the full amount still goes back to the estate. Such techniques have been described as a “heads I win, tails we tie” bet.



    A Reasonable Idea

    If inheritances could be taxed reasonably, enough money would trickle down the legs of the rich that some societal benefits would accrue.

    Unfortunately, all three Republicans in the presidential race promise to abolish the estate tax altogether. Hillary and Bernie offer only weak promises of reform, focused on rolling the tax back to its (higher) 2009 levels. But they’ll need Congressional approval for that, so, no.

    It will be no surprise that American estate taxes are well below average among the countries in the Organization for Economic Co-Operation and Development.

    I know, I know, math and numbers are hard. So here it is in very simple words: by not fairly taxing the estates of the wealthy, we are locking in our staggering economic inequality for future generations.


    FUN FACT: The wealthiest ten percent of Americans takes home about half of all income. The richest 0.1 percent holds 22 percent of the country’s wealth.




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    Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.

    Posted in Biden, Democracy, Trump