October 15, 2016

The System is Rigged (Part One)

Is your perception that "the system" is rigged?

Donald Trump tells us the system is rigged, especially the tax system, and only he knows how to fix it. That's what he told us at the Republican National Convention back in July. The tax system, mind you, which allowed him to legally take a $900M loss and erase his federal tax obligation for maybe eighteen years or so.

Trump has said half of Americans don't pay taxes despite crippling government debt. He has complained about hedge fund managers not paying taxes, people 'leaving the country' to avoid paying taxes, companies lobbying to not pay taxes, companies moving business outside the US to avoid paying taxes, deductions that allow people not to pay taxes, complained that 20% is not enough tax for President Obama to pay, and has even said that the more money you earn, the more taxes you should pay.

And yet, even as he has complained about OPT (other people's taxes) or the lack thereof, he took his $916,000,000 single-year loss, stretched that across many years, and then proclaimed himself a genius for doing so.

You follow that, right? He's a genius for taking advantage of something on his personal taxes but when other people take advantage of legal mechanisms to reduce their tax burden, those people are, well, I guess, the equivalent of poor people who don't pay any taxes at all because they don't make enough to live on. He's a genius, but everyone else needs to pay up?

Not only does he proclaim himself a genius, the one who knows more about our tax system than anyone -- anyone! -- but he accuses other people of doing the same thing, taking the crazy huge deductions, as if they all do it, those rich people.

Like Warren Buffet, currently the planet's fourth richest person, according to the Forbes real time calculation as I write this. (Trump is currently tied for #324, in case you were interested, with an estimated $4.5B, or around half of his announced wealth.) Trump said that "Warren Buffett took a massive deduction" however that appears to be a comment with which Buffett would beg to differ, as noted by his response.
Answering a question last night (note: referring to Sunday's debate) about his $916 million income tax loss carryforward in 1995, Donald Trump stated that "Warren Buffett took a massive deduction." Mr. Trump says he knows more about taxes than any other human. He has not seen my income tax returns. But I am happy to give him the facts. 
Trump hasn't seen them, but it's not because Buffett won't show them -- in fact, a couple of months ago, he offered to sit down with Trump, and have a chat.
I'll bring my tax return. He can bring his tax return...Just let people ask us questions about items on there. Nobody is going to arrest us. There are no rules against showing your tax returns. 
Back to Trump's comment in the debate, implying that he's not the only one who does this - as if that matters at all, since Trump is the one who's running for President and he is the one who has chastised others for not paying taxes. And are you noting a trend here? Trump admits to sexually assaulting women (even though he denies that's what he said) and apologizes for it, by saying Bill Clinton was worse. So I guess we shouldn't be surprised that he takes a tax break and 'justifies' it by saying others did too.

Here's the rest of Buffett's statement on his own taxes.
My 2015 return shows adjusted gross income of $11,563,931. My deductions totaled $5,477,694, of which allowable charitable contributions were $3469,179. All but $36,037 of the remainder was for state income taxes.
The total charitable contributions I made during the year were $2,858,057,970, of which more than $2.5 billion were not taken as deductions and never will be. Tax law properly limits charitable deductions.
My federal income tax for the year was $1,845,557. Returns for previous years are of a similar nature in respect to contributions, deductions and tax rates.
I have paid federal income taxes every year since 1944, when I was 13. (Though, being a slow starter, I owed only $7 in tax that year). I have copies of all 72 of my returns and none uses a carryforward.
Finally, I have been audited by the IRS multiple times and am currently being audited. I have no problem releasing my tax information while under audit. Neither would Mr. Trump - at least he would have no legal problem. 
Why is it that politicians who think something is 'wrong' or 'needs to be fixed' feel compelled to take advantage of the very same wrong, broken thing? And yes, folks, Donald Trump is a politician. Don't be fooled when he says he's not.

Here's another famous New Yorker, our Sonofa Gov Andrew Cuomo, who is a lot like Trump when it comes to saying one thing and doing another.

Cuomo, too, has told us the system is rigged. He has told us over and over that we need campaign finance reform in New York state, and particularly that we need to do something about the LLC loophole (allowing every LLC to contribute $150K annually to politicians and campaigns - in essence, encouraging people to establish multiple LLCs so that almost unlimited contributions can be made to elected officials, you know, to 'get their point across').

He says that, and he has proposed legislation to fix it, but it fails every time, in part, I'm sure, because while he's railing against the loophole, he takes millions from LLCs -- because it's legal to do so.

That's right. Just like Trump, Cuomo has a history of complaining about the very thing he is so adept at using to his advantage. With both of them, we are supposed to listen to the ire in their words, all the while ignoring the irony of their actions.

They tire me out, these glib politicians. Had they the courage of their convictions, they would not be taking  the 18-year carryforward or the $6M in LLC money, nor would they do any of the myriad other things they say are bad for us and need changing.

They tire me out.