Trump Smart Again, Judging By All These Non-Existent Taxes
COULD (LOL) there be crimes?
The House House Ways and Means Committee released Donald Trump's tax returns today, via the relatively undramatic method of just publishing them in the daily Congressional Record, as though they were a bill to fund a new sewage plant in Palm Beach, to choose a perfectly random example of Congress doing its business. Talk about your Friday news dump!
The committee voted last week to release Trump's tax records from 2015 through 2020, but it took a few days to redact personal information like Social Security and bank account numbers, as if there's anything in those accounts anyway. The AP notes that the document trove totals just short of "6,000 pages, including more than 2,700 pages of individual returns from Trump and his wife, Melania, and more than 3,000 pages in returns for Trump’s business entities." Politico reports the tax forms will also be supplemented by a new report on the IRS program that was supposed to audit presidential taxes every year but, oops, didn't.
Another 722 pages are just the handwritten note "Can't sleep, VP still watching" over and over again, although it's unclear why Trump would be so worried about his vice president.
So what amazing secrets are squirreled away in Trump's taxes? It's really sweet of you to think we've actually read them this soon! Rather, we're just very subtly inserting this breaking part into the preview that we started too late to post before the taxes were actually released, which are expected to come out sometime this morning just a little while ago. Like we say, subtle.
As we noted last week, the committee already teased some of what's in Trump's 1040s and 666s and schedules A through Z-28 — the form to report depreciation on a Bitchin' Camaro — in a report compiled by staff on the Congressional Joint Committee on Taxation (JCT). Financial journalist David Cay Johnston, who's followed the spoor of Trump's taxes for ages, did a deep dive into that document and, once he'd had a long hot shower, declared that he's pretty darn sure that the full Trump documents will provide evidence of tax criming. As Johnston puts it, Trump "knowingly committed dozens of brazen tax frauds during the six years when he ran for office and was President."
For instance, there's Trump's highly dubious uses — 26 times during the six years covered by the report — of "sole proprietor reports," aka Schedule C,
that showed huge business expenses despite having zero revenue. That created losses which Trump used to offset his income from work and investments, thus lowering his income taxes. Additional Schedule Cs had expenses exactly equal to revenues while only a few showed profits.
Trump knew this was unlawful because he lost two trials over his 1984 income taxes in which he did the exact same thing, a story I broke in June 2016. Both judges, in scathing opinions, ruled that Trump committed civil tax fraud.
Johnston notes that creative Schedule C filings may not have been "Trump's most lucrative tax cheating technique, but it is the easiest for jurors to understand should Trump be indicted on tax charges." All told, he filed 65 Schedule C forms from 2015 to 2020, which "helped him convert a federal tax bill that could have been as high as $46 million into a $2.1 million profit from the federal tax system." Yes, he actually made a profit on the Alternative Minimum Tax. That's some minimum, etc., etc., you know the drill.
Also too, Johnston points out that the JCT treats all the Trump businesses named in the Schedule C filings as if they're legitimate, but adds that some "may not exist except in tax filings."
Auditors would be smart to demand evidence of business activity such as calendars, correspondence, travel to see potential clients, and the like to determine whether some or all of these businesses exist only on paper, if that.
And if the filings were fraudulent, that's not proof that Trump is a genius, it really isn't:
Trump received more than $154.2 million in wages, interest, dividends, capital gains, and pensions over the six years when he ran for president or lived in the White House. Despite this huge revenue stream, Trump reported minus $53.2 million in Adjusted Gross Income, the last number on the front page of your Form 1040 income tax return.
Johnston runs down several other potentially hinky deductions, such as potentially (LOL) bogus charitable donations, deductions for business costs that may have actually been personal expenses, and, as ever, those loans to Eric, Ivanka, and Don Junior that may or may not have actually been an effort to avoid gift taxes.
Even in the preliminary report, Johnston says, the numbers look sketchy:
In four of the six years, Trump’s taxable income was zero.
The report shows that Trump paid no income tax in three of the six years and just $750 in 2016.
Over the six years, he paid $776,126 in net federal income tax. That’s just half of one percent of his positive income, the equivalent of a married couple earning $100,000 paying $500 instead of the typical $8,500. The typical tax rate for Trump’s income class is more than 25%.
Trump received $18.7 million in refunds under the Alternative Minimum Tax, which is $2.8 million more than he paid, a nifty profit off that tax law. Three decades ago Trump lobbied Congress for generous Alternative Minimum Tax refund provisions for himself and other real estate investors.
In four of those six years, all but 2016 and 2017, his Schedule Cs showed losses totaling almost $1.3 million.
OK, but what if he's not a tax cheat, but just really really bad at business? Haha, who are we kidding? He could (LOL) absolutely be both! Johnston also points out that there's no statute of limitations on civil tax fraud, which means that even if Trump escapes criminal charges, he could still get his ass sued for back taxes. That said, Johnson adds, the JCT report
also notes another tax integrity issue I have spent years exposing: the least compliant taxpayers get away with wrongdoing because fighting them consumes vast amounts of limited government resources.
Good thing the IRS is hiring a lot more personnel, then.
What's Hinky In Donald Trump's Taxes? Wouldn't YOU Like To Know!
Maybe we'll tell you if you're nice.
This week the House Ways and Means Committee announced that it would be releasing Donald Trump's tax returns from the time he ran from president through his four years golfing, being a big old racist, and subverting democracy, but mostly golfing. The biggest thing we learned from a report by the committee was that the IRS, in a surprising departure from its stated policy, never bothered auditing Trump's taxes while he was "president." At least not until Democrats won control of the House and started looking into the matter.
More: The IRS Must Have Forgotten To Audit Trump's Magnificent Taxes!
Yr Wonkette looked earlier at some of the questionable crap the committee's report pointed out, so now let's dig a little further into the details with this nice wrapup of some "Red Flags" that Politico reported on yesterday. The findings in the report come from the Joint Committee on Taxation (JCT), which Politico describes as "Congress’ brain on tax issues." And here we thought "Congress's brain on tax issues" was more like an egg frying in a pan full of money to be given to corporations, wowza.
Is Trump Really THAT Terrible At Business?
The biggest WTF, as we mentioned in that earlier story, is the ginormous business losses Trump used to reduce his overall income and reduce his tax liability. As Politico notes, if business losses in one year are so great that they offset one year's income, they can even be rolled over into future tax years, to reduce tax paid in those years as well.
Without those losses, Trump’s taxes would look fundamentally different. In 2016, for example, when he paid just $750 in federal income taxes, he reported $30 million in earnings but also $60 million in losses.
So were the losses legit, or just fancy, dishonest bookkeeping? Unfortunately, there's a catch in figuring that out, because the business losses in the returns the House requested seem to have started in tax years prior to the returns the committee requested.
Steve Rosenthal of the Tax Policy Center explained that to really tell whether the losses were valid, Ways and Means should have requested a broader range of returns. At least the IRS does seem to have been looking at those earlier returns, according to the report, which notes that may have been one reason the IRS hadn't finished the audits it began after nudging from Democrats in Congress:
The IRS’s approach to auditing Trump’s 2015 return was affected, JCT said, by “the complexity of issues being worked for tax years 2009 through 2013” and “the prior years’ tax liabilities have not been settled.”
But What If His Hobbies ARE Business?
Another really big stinky clue to possible tax embuggerance is that there appear to be "multiple instances in which Trump may be improperly deducting money spent on personal activities and hobbies as business expenses." Wait, even if he did very important business thinking while golfing?
This one's kind of blatant, Politico says:
JCT says it found many filings that are used to report streams of income where his earnings and expenses exactly matched, or where there was no reported income at all — a sign of potential improper mingling of expenses.
In 2016, for example, the filing for DT Endeavor I LLC (aviation) reported gross income of $680,886 and expenses that also totaled $680,886. A filing for Melania Trump (modeling) said it took in $3,848 and reported the same amount of expenses. A filing for Donald J. Trump (speaking) reported $50,000 in gross income and $46,162 in travel expenses.
Hilariously, Trump deducted business expenses to the tune of $342,182 in 2020 for "a single family home deemed a rental property that had no income associated with it." The JCT's language somehow manages not to verge into sarcasm in suggesting it would be a good idea to examine the "high level of expenses for the residential rental property, as well as whether such property was actually held for rent during 2020," because if it's not actually bringing in any rent, what the hell, mang?
Is Donald Pulling A Fred Trump?
No, we are not asking if he once attended a Klan rally, but rather whether Trump has been transferring large sums to his wastrel children and disguising them as "loans" to avoid gift taxes — a hallowed Trump family tradition going back to the tax avoidance shenanigans Fred Trump used to distribute his wealth to Donald and siblings.
MOAR! New York Times Calls A Fraud A Fraud
The returns show Trump reported receiving "hundreds of thousands of dollars in interest payments on loans he gave Ivanka Trump, Donald Trump, Jr. and Eric Trump," which, if Trump were using such loans to avoid gift tax, would also allow the kids to deduct the interest from their own taxes. Proving intent could be a bear, but Politico points out "The IRS has seen this before and has rules about when those would be considered legitimate loans by requiring minimum interest rates being paid."
No You Can't Make Us Explain That Hinky 'Conservation Easement' Again, Not Right Before Christmas!
Liz wrote about THAT mess here, and it's one of the things New York AG Tish James is investigating, and we would rather be mulched than try to explain how ugly it is.
We're Supposed To Believe Donald Trump Paid Taxes In Other Countries?
For all his talent in not paying much income tax in the US of A, he did claim a tax credit in 2018 for supposedly paying $1.3 million in taxes to foreign countries. The idea is that it's not fair to tax people in the US for income they've paid tax on elsewhere. But did Trump actually pay a lot of foreign tax in 2018? The IRS probably should demand the receipts.
So there are just some of the ways Donald Trump's taxes may betray either vry smrt accounting or massive fraud, the end.
[Politico / Image created using DreamStudio Lite AI]
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Kevin Brady: Releasing Trump's Taxes Means We Could See Supreme Court Taxes Too. Oh ... No!
Don't threaten us with a good time.
The House Ways and Means Committee voted Tuesday to release Donald Trump's tax returns to the public, covering the time he ran for president and the four years he resided in the White House. CNBC explains that will
take “a few days” to remove some sensitive information before the release of Trump’s returns and those of eight affiliated Trump businesses, said Rep. Richard Neal, D-Mass, the committee’s chairman.
“But we believe that it’s only days,” Neal said.
The records set for release include the notes of IRS audits of the returns.
The 24 to 16 vote to release the tax returns was along party lines, as Republicans all voted to protect the Great Man — and you too, John or Jane Q Citizen, because they care!
You see, prior to the committee debate and vote, Rep. Kevin Brady (R-Texas) its ranking Republican, offered a dire warning: If Democrats release Donald Trump's taxes, that means they might release yours, or mine, or golly, anyone's! Here's video:
\u201cKevin Brady (R-TX) warns that releasing Trump\u2019s tax returns could lead to the release of tax returns of Supreme Court Justices\u201d— Acyn (@Acyn) 1671566913
Brady warned that
Our concern is that, if taken, this committee action will set a terrible precedent that unleashes a dangerous new political weapon that reaches far beyond the former president and overturns decades of privacy protections for average Americans that have existed since the Watergate reforms. [...]
Going forward, the majority chairmen of the House Ways and Means Committee and the Senate Finance Committee will have nearly unlimited power to target and make public the tax returns of private citizens. And not just private citizens: political enemies, business and labor leaders, or even the returns of Supreme Court justices themselves.
With Republicans taking control of the House in January, that sounds like a threat in the classic Republican style: Don't you make us do something horrible, you mean Democrats. The Texas Tribune reports that Brady also made a motion during the committee's debate to "make a transcript of the meeting public so voters could identify any members who wanted to make the records public," but that appears not to have scared anyone, since the committee voted unanimously to release a transcript.
So yeah, get ready for the next GOP chair of the Ways and Means chair to request that the Treasury Department turn over the tax returns of every Democrat who voted to release Trump's taxes. (It won't be Brady, since he's retiring.) And then we'll probably have a year and a half of hearings on Richard Neal's deductions.
As for Brady's warning that the committee's vote might result in the release of just about anyone's taxes, we're with civil rights attorney Scott Hechinger, who tweeted yesterday, "I’d like to see the tax returns of Supreme Court Justices." Let's even pass a law requiring top officials of the federal government to release their taxes. Or at the very least, let's require it for all presidential candidates, or for sitting presidents, as Neal and other Democrats have called for.
Should all of us ordinary citizens worry that our taxes will be released by out of control Democrats? Seems unlikely, unless some of us private citizens run for president and then spend four years as president falsely insisting that we can't release our taxes because they're under audit.
There's actually no law against releasing returns that are being audited. Richard Nixon's taxes were under audit when he released his returns in 1973, explaining that Americans needed to be able to be certain their president isn't a crook. Which Nixon famously explained he was not, and see, here are his taxes to prove it. (A subsequent audit showed Nixon was actually short about a half-million bucks, but he promised to repay it.)
But even if our tax returns were released, we're betting that the most likely outcome would be that we'd all compare notes on the crazy amounts of interest we paid on our student loans each year. That's just nuts.
[Texas Tribune / CNBC / Newsweek]
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California Doing Neat Sh*t With Housing!
Infill! Affordability! Fighting homelessness! Tenants rights!
The Nation-state of California keeps doing progressive stuff like planning to phase out internal combustion vehicles by 2035, guaranteeing access to abortion care, and taxing the rich enough to do social services and still have a surplus. If only people could afford to live there!
Yes, that is our very unsubtle way of telling you that the California Legislature took up more than 100 housing laws in its 2022 session and passed a passel of 'em, aimed at making housing more affordable by allowing greater flexibility in zoning, more types of housing, and easier permitting for lower-cost housing, too. It's pretty damned impressive, so grab a protective head covering and let's inspect what California's building!
Tear Down That Dead Strip Mall, Put In Housing
Near the end of September, Gov. Gavin Newsom held a signing ceremony to tout a great big package of new housing laws that will spur affordable middle-class and low-income housing. One of the bills, AB 2011, will allow developers to repurpose unused commercially zoned property for residential use without getting permission from local governments — as long as a percentage of the housing is affordable. The goal is to make use of commercial property that may sit vacant for years, but which local governments might resist rezoning for housing, since businesses mean more tax revenue — if any businesses move in. NPR reports the bill was
a long-sought victory for affordable housing advocates, who say such sites are ready-made for apartments because they are often near populated areas and come with ample parking.
The bill would require that workers on such projects be paid the prevailing wage, and that the projects meet energy and environmental standards. (In fact, climate considerations are built into pretty much all the new housing laws.)
A companion bill, SB 6, also allows building of housing in areas zoned for offices or retail, at market rate, but would also require that projects with 50 or more units provide healthcare benefits and apprenticeships. NPR explains that the two bills reflect
a compromise between labor unions and housing developers. Some labor unions, including the powerful State Building and Construction Trades Council of California, had insisted that legislation should require a "skilled and trained" workforce to build the housing. That means a certain percentage of workers would have participated in a state-approved apprenticeship program.
But housing developers argue there aren't enough workers available to meet that standard, which would make some projects difficult to complete.
The solution was to give homebuilders a choice. The bill that requires affordable housing does not require a skilled and trained workforce, while the bill that doesn't require affordable housing does require one.
An analysis of AB 2011 found that it's likely to result in a gain of up to 2.4 million housing units statewide.
Where We're Going, We Won't Need Parking
AB 2097 is another bill aimed at making housing easier to build while also aiming at climate; it will prevent cities from requiring that new housing or business development within a half-mile of public transportation set aside space for parking. The idea is to promote less car dependency and get more housing built at lower costs. State Sen. Anthony Portantino, the bill's co-author, said damn right the idea is social engineering, explaining, "We want to make sure that we respect a movement towards an alternative way of getting to work, which is on a bicycle or on mass transit."
Portantino noted that parking spaces can add between $40,000 and $100,000 per space to the cost of a new development, so eliminating parking requirements should mean lower relative rent prices, too.
Much ADU About Granny Flats, Tiny Houses
in 2021, California aimed at increasing the housing supply with SB 9, which allowed duplexes and sometimes fourplexes on lots zoned for single-family dwellings. Cities have tried to get around that law by piling on weird requirements, which is a problem, but the Lege continued passing more bills to make better use of available space. Density is destiny, man. (Also, as the New York Times reports, the state is looking to crack down on cities' attempts to thwart the new zoning requirements.)
One suite of bills will make it easier for homeowners to add to the available housing supply by renting out small "accessory dwelling units" (ADUs) on the same lots as an existing home. One measure requires cities to allow such small units be two stories, up to 18 feet tall, if they're near transit or on a lot with multifamily housing. Another provision of the law allows parking requirements to be eased when a garage in a multifamily unit is converted into an ADU. A separate law prevents cities from requiring a public hearing for homeowners adding a bedroom.
Other density measures aim to make low-cost housing available by providing incentives for buildings where two units share a kitchen, and for mixed use commercial projects that include affordable housing.
There's even a new law aimed at encouraging community colleges to build affordable housing for faculty and staff by allowing the colleges to get low-income housing tax credits. That's an outgrowth of a 2016 law allowing school districts to get such credits for faculty and staff housing.
Homelessness and Affordable Housing
In his 2022 budget, Newsom called for an additional $2.2 billion to fight homelessness, on top of the $12 billion the state dedicated to a multi-year program to get people into stable housing. The Lege added some good stuff on that front as well, passing a bill setting a goal of ending homelessness among domestic violence victims and their children, plus grants to prevent homelessness among families and pregnant people.
AB 2483 will prioritize funding for "housing that contains at least 25 units for elderly people who are homeless," and will also provide housing assistance to help people with disabilities to live in their own homes. One more measure will give priority spots in public housing to local people who are at risk of displacement.
Other measures aim at taking some of the hassle out of even finding affordable housing, like a new law requiring landlords to make clear whether they allow reusable credit or renter screening reports, and prohibiting charging fees if they use the reusable kind.
Other tenant protections include a ban on evictions of victims of domestic violence, and — this is just nice, damn it, stop chopping those onions — a requirement that new affordable housing buildings allow pets. My cat approves.
And in a move aimed at reducing NIMBYism, the legislature approved a measure for the 2024 ballot that would eliminate the requirement that public housing be subject to referendum. That's huge, since fearmongering about public housing has long been used to prevent it from being built pretty much anywhere. Needless to say, the measure is sure to be opposed by a lot of the same big-money interests that have helped make housing in California ridiculously expensive already.
So far missing from California's housing agenda has been any attempt to relocate smartass liberal bloggers currently trapped in red states, which strikes us as a disappointment, frankly.
[Alfred Twu / Governor of California / NPR / CalMatters / CalYIMBY / Image: 'Cavajunky,' Creative Commons License 4.0]
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