Econ-man or Con-Man? (Aug. 12)

Mike & Co. —
Today, HRC and Sen. Tim Kaine released new tax returns, HRC to supplement her previous release of 30 years of returns and Kaine to reveal his tax practices over the past decade.  As you know, Trump continues to refuse to release any of his tax returns from the past 40 years, citing an IRS audit as the hold-up.

Trump has exhibited a variety of negative personal characteristics throughout his campaign, but one less considered is kleptomania, with a Trumpian interpretation.  A close look at his past behavior and current policies demonstrates a recurring pattern and inclination to horde his income from the government and to develop new policies to protect and extend this practice. Trump is in some ways a reverse Robin Hood – stealing from the low and middle classes and giving to the very rich.

The below is an examination of Trump’s “kleptocrat” tendencies, focusing on his refusal to pay taxes, his pro-rich proposals and his plagiarism in policy development.



Failure to Pay Taxes?

A plethora of real estate and tax professionals have stated the possibility that Trump has paid very little, or perhaps nothing, in income tax over the years. According to Len Green, chairman of a tax advisory firm, it is “both possible and legal that Donald Trump would pay little or no income tax.”

This situation is made possible by the numerous tax breaks available to reduce reported income to zero, or even report a loss.  The real estate sector is a prime arena for reducing tax liability, due to tax deductions as well as the generous leeway in timing and recognition of income on real estate developments.

Trump himself has stressed that corporate executives “get away with murder” in their tax filings.  He has also said he pays as little as the law allows, though maintaining his payments are still “substantial.”

Though the evidence is mounting, the accusations regarding Trump’s limited income tax payments remain speculations and nothing can be proved until Trump’s recent tax returns are released to the public.  Unfortunately, it appears that Trump will continue to hoard those for the foreseeable future.

A few of Trump’s tax returns from the 1970s are available to the public, and show that Trump paid no federal income tax in 1978 and 1979, due to reported losses.  From 1975 to 1977, Trump paid less than $75,000 total in federal income tax.

An Unmentioned Loophole

One loophole in particular, pertaining to depreciation, provides real estate enormous benefits in terms of taxation.  Depreciation as a concept holds that, over time, physical capital loses value and is eventually worthless, and real estate is often cited as an asset facing depreciation.  Historically, most real estate has in fact appreciated in value.

Under the tax code, estimates of depreciation on real estate (whether accurate or not) are permitted some tax deductions.  Depreciation is usually later recaptured and taxed when an asset is sold.  But if a real estate developer sells an appreciated property at a large profit, and uses said profits to buy another property, the transaction is deemed a “like-kind” exchange, which is free from taxation.

This enormous loophole is estimated to cost $33 billion in lost tax revenue each year.  According to Steven Rosenthal of the Urban-Brookings Tax Policy Center, this loophole allows “well-to-do and well-advised taxpayers to defer their tax liability potentially until death.”  If Trump truly wanted the wealthy to stop getting away with murder in manipulating the tax code, he would include eliminating this loophole in his plan.

Democratic Openness on Tax Returns

While Trump continues to refuse to release his tax returns, HRC and running mate Sen. Tim Kaine both released new tax returns today.  HRC has already released her returns from each year dating back to 1997.  This release made her 2015 tax returns available to the public.

Kaine also presented his first release, which included the returns of the Senator and his wife over the past ten years.  Both HRC and Kaine’s returns detail information on the two candidates’ income, charitable giving, and yearly tax rates.

Friends and Family Plan, with a Trump Loophole

Trump’s actual policies suggest an intent to continue taking advantage of the tax code and avoid a tax burden.  Trump’s tax plan, though limited details are available, clearly appears to be a tax relief boon for the wealthy.  Despite his claims that his “across-the-board income tax reduction” would favor middle-class families, his actual proposals are by and large a “family and friends plan” for the rich.

At the heart of Trump’s tax agenda is the so-called “Trump Loophole,” a part of Trump’s proposal to reduce the top marginal corporate tax rate from 35 percent to 15 percent.  While this sharp reduction is already problematic, more concerning is this proposal’s applicability for pass-through entities.  These organizations are currently taxed on the business owner’s tax returns through the individual income tax code.  However, under Trump’s plan, pass-through income would be treated instead as “business income,” receiving the 15 percent top corporate rate rather than Trump’s suggested top individual rate of 33 percent.  This “Trump Loophole” for pass-throughs presents an opportunity for the wealthy to report all of their income as “business income,” thus avoiding the individual rates faced by average Americans earning traditional wages and salaries.

The share of business income that goes through pass-through organizations has dramatically increased over the past 30 years, from 25 percent of net business income in 1980 to more than 50 percent in 2012.  Thus, a majority of business income in recent years has been exempt from the corporate income tax, and instead subject to individual rates.  While Trump’s plan would return this income to the corporate side of the tax code, a significant amount of business income would face a drastically lower rate.

Trump’s numerous organizations are among those that stand to benefit from the proposal.  Trump himself has stated that though he has raised some numbers for the wealthy, “a lot of the rich are benefitting because of the reduced taxes for businesses.”

The Trump Loophole also makes his proposal to eliminate the carried interest deduction irrelevant.  Though the wealthy would no longer be able to avoid taxation on carried interest, the low rate of 15 percent on their business income would result in a lower tax burden overall.

It also bears mentioning that Trump aims to eliminate the estate tax, which affects only 0.2 percent of Americans.  As all estates under $5.45 million for individuals and $10.9 million for couples are exempt from the tax, only the wealthiest of Americans, again Trump’s family and friends, would benefit form this proposal.

Stealing from Existing Plans

But Trump’s “kleptomania” isn’t limited to hoarding taxes.  The candidate is also extensively borrowing from others’ plans in developing his own “original” proposals.  In his overhaul of his first tax plan, Trump has leaned heavily on the plan devised by Speaker Paul Ryan on tax reform.  Trump changed his individual income brackets to match the 12, 25, and 33 percent levels supported by Ryan. The candidate also included a proposal to allow businesses to immediately deduct the cost of their investments, a key feature of the Ryan plan.  In revising his tax plan, it is unclear whether Trump bowed to internal Republican pressure (perhaps an indication of his poor negotiating skills), or merely stole Ryan’s ideas for his own benefit.

More surprising is Trump’s blatant copying of HRC’s infrastructure agenda. HRC released a detailed plan on infrastructure in November of 2015, featuring a direct public spending, renewed and revitalized Build American Bonds, and an infrastructure bank, with the combined potential to generate $500 billion in infrastructure spending over the next five years.  Trump, when pressed for details on his own infrastructure agenda, suggested spending half a trillion, thus equalizing HRC’s proposed investment.  He also proposed developing a fund to pay for the investment, utilizing bonds with a low rate of return.  Trump’s plan appears to be a poorly copied version of HRC’s agenda, further evidence of his kleptomania of ideas.

Both of these instances are additional evidence of Trump’s inability of Trump to identify and develop unique solutions to our country’s problems.  For someone who claims to have endless innovative ideas to “make America great again,” and to be the “only one” able to “fix it,” he seems to be quite over-reliant on his shaky GOP alliances and his Democratic opponent.

45 thoughts on “Econ-man or Con-Man? (Aug. 12)”

  1. My wife and i have been so peaceful when Michael managed to finish up his researching via the precious recommendations he obtained using your web site. It is now and again perplexing to simply happen to be making a gift of techniques which often some others might have been trying to sell. We recognize we need you to thank for this. The type of illustrations you made, the straightforward website navigation, the relationships your site make it easier to instill – it is most spectacular, and it is letting our son in addition to us reckon that this subject matter is interesting, which is certainly tremendously serious. Thanks for the whole lot!

  2. Hi there! I know this is kinda off topic nevertheless I’d figured I’d ask.
    Would you be interested in trading links or maybe guest authoring
    a blog article or vice-versa? My blog covers a lot of the same topics as yours and I think we could greatly benefit from each other.
    If you are interested feel free to send me an email. I look forward to hearing from you!
    Fantastic blog by the way! 0mniartist asmr

  3. Have you ever considered publishing an ebook or guest authoring on other websites?
    I have a blog based upon on the same ideas you discuss and would love to have you share some stories/information.
    I know my readers would enjoy your work. If you are even remotely interested, feel free to send me an e-mail.
    asmr 0mniartist

  4. An outstanding share! I have just forwarded this onto a colleague
    who was conducting a little homework on this.
    And he in fact bought me lunch due to the fact that I discovered it for him…
    lol. So let me reword this…. Thank YOU for the meal!!
    But yeah, thanks for spending the time to talk about this matter here on your
    web site. asmr 0mniartist

  5. I don’t even know how I ended up right here, but I believed this put up was once great.
    I do not recognise who you’re however definitely you are going to a famous blogger in case you are not already.

  6. I have to thank you for the efforts you’ve put in penning this site.
    I’m hoping to view the same high-grade content by you in the future as well.
    In fact, your creative writing abilities has encouraged me to get my very own site now 😉

  7. Every weekend i used to go to see this website, as i want
    enjoyment, for the reason that this this web site conations genuinely fastidious funny information too.

  8. The other day, while I was at work, my cousin stole my apple
    ipad and tested to see if it can survive a 40 foot drop,
    just so she can be a youtube sensation. My apple ipad is now destroyed and she
    has 83 views. I know this is entirely off topic but I had to share
    it with someone!

  9. I all the time used to study post in news papers but now as I am a user of net thus from now I am using net for content, thanks to web.

  10. After going over a handful of the articles on your blog, I seriously appreciate
    your way of writing a blog. I saved as a favorite it to my bookmark site list and will be checking back in the near
    future. Take a look at my web site as well and tell me your opinion.

  11. Great blog! Is your theme custom made or did you download
    it from somewhere? A design like yours with a few simple tweeks would really make my blog shine.
    Please let me know where you got your theme. Thanks

  12. scoliosis
    This website was… how do you say it? Relevant!! Finally I’ve
    found something which helped me. Appreciate it!

  13. scoliosis
    Hi there would you mind letting me know which web host you’re using?
    I’ve loaded your blog in 3 completely different internet browsers and I must say this
    blog loads a lot faster then most. Can you suggest a good web hosting provider at a fair price?
    Thanks a lot, I appreciate it! scoliosis

  14. free dating sites
    Hello! This post could not be written any better!
    Reading this post reminds me of my previous room mate!
    He always kept talking about this. I will forward this article to him.
    Pretty sure he will have a good read. Thank you for sharing!
    dating sites

  15. Hurrah, that’s what I was looking for, what a stuff!
    existing here at this website, thanks admin of this web page.

  16. I was very happy to find this website. I want to to thank you for ones time for this particularly wonderful read!!
    I definitely liked every little bit of it and i also have you book
    marked to look at new stuff on your site.

  17. My brother recommended I might like this blog. He was totally right.

    This submit actually made my day. You can not consider just how so much time I had spent for
    this info! Thanks!

  18. I am no longer certain where you’re getting your information, but
    great topic. I must spend some time finding out much more or understanding more.

    Thanks for fantastic information I used to be on the lookout for this info for my mission.

  19. I’m not sure exactly why but this site is loading very slow for me.

    Is anyone else having this problem or is it a
    problem on my end? I’ll check back later on and see if
    the problem still exists.

  20. It’s really a great and helpful piece of info. I am
    happy that you simply shared this helpful information with us.
    Please stay us informed like this. Thanks for sharing.

  21. You really make it appear really easy with your presentation but I
    find this matter to be actually one thing which I think I’d never understand.
    It kind of feels too complex and extremely broad for me.
    I am taking a look forward in your subsequent publish, I will try to get the hold of it!

  22. Thanks for the auspicious writeup. It in reality used to be
    a leisure account it. Look advanced to far brought agreeable from you!
    However, how can we keep up a correspondence?

  23. You could certainly see your enthusiasm in the work you write.
    The sector hopes for even more passionate writers such as you who are not afraid to mention how they believe.
    Always go after your heart.

Leave a Comment

Your email address will not be published. Required fields are marked *