Orange Duce

[RedFromMI]

From Daniel Reck, from the London School of Economics on Twitter:

Here is a thread about the bad takes I am seeing on Twitter about the Trump tax story. If your gut reaction is nihilistic, cynical, or dismissive, I am going to try to change your mind.

BAD TAKE 1: this is all 100% legal, the rich have loopholes.” We can’t diagnose evasion conclusively from the return alone, but the reporting describes some super suspicious activity. Three things jump out:

1) He is in protracted litigation with auditors that could saddle him with >$70 million in taxes. This is over a dubious loss carryforward that he probably wasn’t allowed to claim.

2) >$20 million in consulting fees apparently paid to his kids. This is a common tactic to dodge estate/gift taxes, but paying higher than market salaries is illegal. Especially telling: some of his business partners apparently had no idea their business was hiring “consultants.”

3) a large number of personal expenses claimed as business expenses. Flights, hairstyling, you name it. Also commonly done, but not legal.

Honorable mention: the reporting about the Seven Springs estate looks pretty fishy as well.

Anyway, these really don’t look legal, these look like Trump violating the tax code and daring the IRS to enter into years of litigation to do anything about it, which in one instance they’ve actually done.

(There is some old-fashioned legal tax avoidance going on too though!)

BAD TAKE 2: “he’s either the worlds worst businessman or the world’s worst tax cheat.”

This one I’m forgiving of because this is where I was myself before the new reporting. But after reading all this, the inescapable conclusion is that it’s BOTH.

Ok he may or may not be the “world’s worst” tax cheat. But the activity above makes it plain he is trying every trick in the book to cheat.

So, is he actually making huge profits and just claiming all these losses to dodge taxes?

Well, he is also saddled with at least $400 million in debt, up to $1 billion by some others’ reporting. Some particularly huge loans come due in 2020 and he is making zero payment on the principle. That’s not something you’re a prospering businessman.

So both things must be true: he violated tax law repeatedly and his businesses are failing. It’s no longer either/or, not with what we know now.

BAD TAKE 3: “We knew all of this already.”

No, we simply didn’t. To use an old metaphor, we were stumbling around in the dark feeling out little pieces of the giant elephant in prior reporting, but now we’re seeing the whole elephant. We hadn’t even seen all the pieces before.

(Ok it’s not a perfect metaphor because there is even more beyond the tax returns that we still don’t know. We will probably never see the entire big picture, but further investigation by journalists or prosecutors could reveal a lot.)

BAD TAKE 4: “this doesn’t matter.”

This take is always bad because we the people get to decide whether it matters with our votes and our speech. But also, think about what a potential future Biden administration (*knocks on wood*) can do with this story.

This reporting created more public attention to tax avoidance and evasion by the rich in one day than we have ever had. It is a roadmap of ways the wealthy aggressively minimize their taxes. Democrats can and should leverage this story to level the tax playing field for everyone.

In summary: This really is news. He’s a terrible businessman, but he also seems to have actually cheated. And it matters. We can do something about it. The first thing we can do about it is go and vote.

My notifications are going nuts so a few corrections:
1) the loans are due in 2022 according to the Times story, not 2020
2) "principal" not "principle." Embarrassing.
3) Left out some words in the tweet about debt as well, I think you can work out what I meant.

[a fan]

The DNC and NYT had these for over a year at least. It's all a calculated organized timeline of 'bad news' by both the media and the DNC is all

That's quite the system of ethics you're using: don't judge the news; instead, blame the messenger.

I'll be sure to use this one on you. I'm sure you'll agree that the messenger is the problem, right?

I'm not 'blaming' anyone (certainly not messengers; I laugh at them) other than the people who gullibly swallow the timelines of incredibly-perfectly-timed releases

How can you be this daft, is my question.

"incredibly perfectly timed", Pete, would have been to release this BEFORE Trump even got the nomination for President. Second to that? It would been to release this in the summer of 2016, BEFORE he got elected.

If you're going to complain about timing? "They" would have released this in 2016, and Hilary would have won. Pay attention for once.

This comes in third place for timing, yep. Guess what? I don't care that the Dems orchestrated (duh) this release. You seem to think that this obvious fact diminishes or changes the content of the news. So do your fellow TrumpFans.

TrumpFans won't care about this news, so really, you're all set. They're too far gone to understand that when they send in their money every April, the reason that it's not a lower amount is that they are paying Trump's taxes....and, of course, the taxes of his corrupt family.

All I have to say to TrumpFans is: enjoy! Keep "sticking it to the ilbs"!! That's just working out sooo well for you and your family! Huzzah!

[seacoaster]

https://projects.propublica.org/graphics/eitc-audit

Looks good from where I'm sitting.

[RedFromMI]

https://projects.propublica.org/graphics/eitc-audit

Looks good from where I'm sitting.

Does not exactly fit with PBs preconceived notion of who gets audited...

[seacoaster]

Fun with Rick!

https://twitter.com/duty2warn/status/12 ... 2488353792

[dislaxxic]

https://projects.propublica.org/graphics/eitc-audit

Looks good from where I'm sitting.

Awful lot of those self-righteous red states in that map...WOW! ...and in a Trump Era administration to boot.

..

[Peter Brown]

https://projects.propublica.org/graphics/eitc-audit

Looks good from where I'm sitting.

Awful lot of those self-righteous red states in that map...WOW! ...and in a Trump Era administration to boot.

..

The reason (if you even want a fact) is that the EITC program is the greatest grift in this country's history. And as they said about why someone robs a bank, 'cause that's where the money is'. If EITC is huge in the south and southwest and florida, that's where easy audits occur.

[seacoaster]

Trump pretty much suggesting he will not accede to the usual transition of power:

https://twitter.com/atrupar/status/1310335854599122945

[seacoaster]

"We're looking at it very strongly."

https://twitter.com/atrupar/status/1310341140844032006

Why does this Moron use "strongly" so, well, wrongly?

[ggait]

So, is he actually making huge profits and just claiming all these losses to dodge taxes?

Trump is both a good businessman and a bad businessman. And also has a pathological aversion to paying any taxes.

Trump claimed (very aggressive and perhaps illegal) a $1 billion loss from his Atlantic City, Trump Air and Plaza Hotel fiascoes. That's being a really bad business man. Did some kind of sketchy convoluted debt/equity swap thingy that allowed him to personally claim corporate losses.

Next, Trump started making BANK from the Apprentice. Took in something over $400 million. That's pretty good business there. To make the YUGE losses valuable, after all, you have to have some big off-setting income. Trump also had taken in a couple hundred million from selling off the Fred Trump outer boroughs apartment portfolio. That's just being lucky and well born.

Then Trump starts doing other aggressive stuff to shelter all that income. Just like his father did a generation earlier, per the prior NY Times expose.

Being a real estate developer is one of the best/legal tax dodges there is left these days. So Trump starts buying up golf courses and other properties that are mildly profitable or mildly losing (on a real basis) but which (as is the deal with real estate) generate lots of paper losses. Most people can't use those losses very easily. But "active real estate developers" can use those losses. That's the core tax dodge -- and largely legal.

But Trump being Trump (and like his father) he overly aggressively pads the expenses to make his tax bill zero. So deductible haircuts, Ivanka consulting fees (which are really taxable gifts) and other stuff. That's probably where the tax fraud would be.

Unless you know the value of the encumbered properties, you can't tell if Trump's huge loans are refinance-able or under water. But we'd all agree that debts that large and opaque are beyond completely inappropriate for any public servant to have while in office.

He's not paying the loans down. So he's pretty much financing a lot of his life style with a credit card and making the minimum monthly payment.

[MDlaxfan76]

I think where we'll see the bulk of illegality will most likely be with bank fraud, representing property value and income streams very differently with lenders than with the government.

That said, the major conflict that he's been having with the IRS is over a $72 million deduction that, on it's face, appears to not have been legal. Looks to me that he will, at a minimum, be required to repay it...questionable, though, whether he can cough up that much. Whether it's actually tax fraud will depend on whether they can prove that he knew that the deduction should not have been taken. That's a tougher bar.

[wgdsr]

"We're looking at it very strongly."

https://twitter.com/atrupar/status/1310341140844032006

Why does this Moron use "strongly" so, well, wrongly?

i don't think they're looking at it nearly as strongly as the new vaccines. they're very strong. they're very strong vaccines. extremely strong. i wish i had the link. it was a strong link.

[wgdsr]

I think where we'll see the bulk of illegality will most likely be with bank fraud, representing property value and income streams very differently with lenders than with the government.

That said, the major conflict that he's been having with the IRS is over a $72 million deduction that, on it's face, appears to not have been legal. Looks to me that he will, at a minimum, be required to repay it...questionable, though, whether he can cough up that much. Whether it's actually tax fraud will depend on whether they can prove that he knew that the deduction should not have been taken. That's a tougher bar.

what was that puppy for and what looks illegal about it on its face? (i didn't read the times article)

[LandM]

MD,
I would think with real estate there would be appraisals done on the property and rental contracts reviewed? Never used real estate for a business bank loan or LOC. As you know bankers hate software companies as there is no tangible assets Old school.

GG,
FTW - seen many people use bank loans as credit cards and I have seen many people somehow renegotiate the bank loans as no banker wants to be stuck with a fire sale on property. Fine line with going out of bank regulations and covenants.

[wgdsr]

So, is he actually making huge profits and just claiming all these losses to dodge taxes?

Trump is both a good businessman and a bad businessman. And also has a pathological aversion to paying any taxes.

Trump claimed (very aggressive and perhaps illegal) a $1 billion loss from his Atlantic City, Trump Air and Plaza Hotel fiascoes. That's being a really bad business man. Did some kind of sketchy convoluted debt/equity swap thingy that allowed him to personally claim corporate losses.

Next, Trump started making BANK from the Apprentice. Took in something over $400 million. That's pretty good business there. To make the YUGE losses valuable, after all, you have to have some big off-setting income. Trump also had taken in a couple hundred million from selling off the Fred Trump outer boroughs apartment portfolio. That's just being lucky and well born.

Then Trump starts doing other aggressive stuff to shelter all that income. Just like his father did a generation earlier, per the prior NY Times expose.

Being a real estate developer is one of the best/legal tax dodges there is left these days. So Trump starts buying up golf courses and other properties that are mildly profitable or mildly losing (on a real basis) but which (as is the deal with real estate) generate lots of paper losses. Most people can't use those losses very easily. But "active real estate developers" can use those losses. That's the core tax dodge -- and largely legal.

But Trump being Trump (and like his father) he overly aggressively pads the expenses to make his tax bill zero. So deductible haircuts, Ivanka consulting fees (which are really taxable gifts) and other stuff. That's probably where the tax fraud would be.

Unless you know the value of the encumbered properties, you can't tell if Trump's huge loans are refinance-able or under water. But we'd all agree that debts that large and opaque are beyond completely inappropriate for any public servant to have while in office.

He's not paying the loans down. So he's pretty much financing a lot of his life style with a credit card and making the minimum monthly payment.

what i can't wait for is the new dem proposal on getting those tax rates back up to where they were or higher on the 1%, that saved them all that money. hell, trump will have to cough up another 20 spot if we just go back to where they were.

edit: wait! he won't! i don't think he owes anything additional on whatever his income was that generated $750 in taxes. that'd be an additional 2.6% for the folks that have that kind of 1% income reported.
we should probably put a tax rate on assets, too. i'm guessing they won't know what hit 'em and we'll collect from the income side and the asset side before they can shelter it.
what a plan!

leave the loopholes and the tax breaks for big corps and uber wealthy, they can't possibly stay up with the stealth of the federal government.

[seacoaster]

"We're looking at it very strongly."

https://twitter.com/atrupar/status/1310341140844032006

Why does this Moron use "strongly" so, well, wrongly?

i don't think they're looking at it nearly as strongly as the new vaccines. they're very strong. they're very strong vaccines. extremely strong. i wish i had the link. it was a strong link.

Your statement was strongly strong. Thanks.

[MDlaxfan76]

MD,
I would think with real estate there would be appraisals done on the property and rental contracts reviewed? Never used real estate for a business bank loan or LOC. As you know bankers hate software companies as there is no tangible assets Old school.

GG,
FTW - seen many people use bank loans as credit cards and I have seen many people somehow renegotiate the bank loans as no banker wants to be stuck with a fire sale on property. Fine line with going out of bank regulations and covenants.

Sure, one would certainly think that a traditional lender would do due diligence. (Little appreciated secret, the super big deals sometimes receive far less scrutiny than you and I would on our building a warehouse or a strip center, etc.) However, we know from lots and lots of reporting (and in some cases our own contact networks) that Trump lost the backing of US lenders who'd already been burned by him. Not because he was simply not that good a business manager, but because he'd been dishonest with them.

He settled various claims with lenders/investors, but that doesn't mean that the government ever examined whether those blown up deals included misrepresentations to the lenders/investors. The lenders/investors agreed to walk away with what they felt they could get, and Trump turned around and used the "losses" of the entire transaction to shelter his income from other sources, even though the losses were not actually his own. It's a crazy darn system, but part of that is actually legal or was at the time. But not any misrepresentations in the first place. They'd be illegal.

From his attorney/fixer Cohen we hear the accusation that Trump more recently would tell the government one set of cash flows and the lenders a different set of cash flows. Kept two sets of books. that's where I'd be focused if I were investigating for bank fraud and tax fraud.

Back to no US lenders...now we're in the territory of whether the motivations of the lenders in the last two decades was entirely the same as would be with a traditional banker. Or were the sources of these funds needing to move capital outside the reach of their own governments, whether for political or criminal protection? Who lent him the money may be the most important aspect in the latter transactions. And these lenders may well have not actually been all that concerned with whether the representations were accurate or not, they simply needed hard assets underlying, and were willing to take a big haircut if necessary. So minimal due diligence, if any, other than what Trump produced and maybe a flyby at the golf course, etc.

Con man.

and yes, software companies generally have no hard assets, little protection to the downside...on the other hand, sounds like you managed ok...

Of course, if you can convince a mega investor that your software/service co actually has hard underlying real estate assets, yet will perform exponentially like a tech co, when it has very little such likelihood or assets, you can pull a WeWork...

[wgdsr]

"We're looking at it very strongly."

https://twitter.com/atrupar/status/1310341140844032006

Why does this Moron use "strongly" so, well, wrongly?

i don't think they're looking at it nearly as strongly as the new vaccines. they're very strong. they're very strong vaccines. extremely strong. i wish i had the link. it was a strong link.

Your statement was strongly strong. Thanks.

i will say, if joe's juicing, i want to see a pic of the needle injection ceremony (covered up, of course) and also would like to know what's illegal about it!?!
if that's what it takes joe to get out there, i'm all for it!! do not take away my trump-biden debates!! they're strong!! and it looks like i've already lost kanye!! that's not strong!!

[ggait]

Wouldn't Trump's adderall show up in a urine test?

The guy is such a projector.

[SCLaxAttack]

The DNC and NYT had these for over a year at least. It's all a calculated organized timeline of 'bad news' by both the media and the DNC is all

That's quite the system of ethics you're using: don't judge the news; instead, blame the messenger.

I'll be sure to use this one on you. I'm sure you'll agree that the messenger is the problem, right?

I'm not 'blaming' anyone (certainly not messengers; I laugh at them) other than the people who gullibly swallow the timelines of incredibly-perfectly-timed releases. Odd that everything didn't happen in one week!

How can you be this naive is my only question. I swear, we have gone brain dead.

Said by the troll who says nothing about the timing of the release of Trump’s “Platinum Plan” or supposed healthcare plan. How many weeks ago since he said it would be out in two weeks?

But only one side swallows “incredibly-perfectly-timed releases”.

The dump that comes from the keyboard of the idiot living under the Gasparilla Island bridge never ceases to amaze me.