“Multigenerational Wealth Is Best Hidden”: What Doesn’t Donald Trump Want You To Know About His Wealth?
This is what Donald Trump’s refusal to release his tax returns says about America. We are a nation that can’t think straight about wealth and class. And Trump knows better than to puncture our delusions.
The American psyche is hyper-attuned to the trinkets of the wealthy: the right car, the right brand of clothes, the right vacation spots. We flatter ourselves with our circumscribed access to these status goods — or perhaps we only dream of that access — but we fail to understand that they do not equate to real wealth.
The very rich are different from you and me. They have something we never will: the power of money. Their money is the kind that doesn’t go away with a divorce, an extended sickness, a dip in the markets or even the death of a high income earner. Theirs is the kind that owns politicians and the laws they make.
Real wealth, the multigenerational kind, is best hidden. And even though a tax return won’t reveal all there is to know, it will reveal enough.
Trump told the Associated Press this week that nothing would be released until the government is through with its audit of him. The next day, Wednesday, he hedged a smidgeon to Fox News, saying he’d like to release the returns before the election. Don’t bet on that happening.
For one thing, if we were able to see how Trump’s fortune is structured and how much tax he pays on it, we would also be able to compute his liability under his proposed changes to the tax code. In other words, we would be able to approximate how much Trump stands to earn for himself and his heirs by pulling the strings of power. Is it any surprise he won’t go there?
Let’s take a closer look at the tax plan that he unveiled last fall. Plenty of experts have already done so.
As part of his populist appeal, Trump envisions simplifying the tax code and dismissing about 73 million households from paying any tax at all (most of those are already not paying). Those families will be able to submit a form to the IRS that says, “I win.” Yes, that is really his plan.
The cuts would lower taxes for people all income levels. But the Tax Foundation, a nonpartisan but right-leaning watchdog group, noted “the biggest winners — in raw dollars and on a percentage basis — would be those in the top 10 percent of filers, particularly those in the top 1 percent.”
The top marginal rate for individuals would drop from 39.6 percent to 25 percent. The corporate rate would drop from 35 percent to 15 percent. He would do away with the estate tax. That adds up a lot of lost revenue — about $10 trillion over a decade, according to the Tax Foundation
Trump claims that the tax cuts would be made up for by closing some loopholes for the wealthy and corporations. But the Tax Foundation crunched the numbers and has deemed this to be wishful thinking. Severe cuts to spending would be necessary to avoid crushing growth in the national debt.
Wishful thinking is Trump’s stock in trade. Indeed, some speculate that another reason why he does not want the public to see his tax return is that his boasted wealth is squishier than he’d like to admit. Trump is notorious for overstating his attributes, and when it comes to his wealth he is especially touchy.
He sued former New York Times reporter Timothy O’Brien over the latter’s book, “TrumpNation: The Art of Being the Donald,” which questioned Trump’s net worth. The book also explored if Trump convinced his siblings to borrow on his behalf from their trust funds to save him from financial ruin in the early 1990s. Trump’s lawsuit against O’Brien was dismissed.
Still, Trump is clearly rich to an extent most Americans cannot imagine. Oddly — and sadly — many tout this as an alluring quality. He’s so rich he can’t be bought, they say. This attitude reveals a pathetic inability to understand plutocracy, and its growing threat to our democracy. Americans continue to be suckered into unrealistic beliefs about their ability to upgrade their social class. Meanwhile, the policies and programs that are necessary to promote middle-class security are toppling one after another.
Donald Trump is not going to share his wealth with you, dear voter, or help you get rich on your own. He can’t. What worked for Trump will not work for you. His trick was the oldest one in the book: Have a rich daddy. And keep it in the family.
By: Mary Sanchez, Opinion-Page Columnist for The Kansas City Star; The National Memo, May 14, 2016
“A Gift For America’s Future”: To Get America Moving, Tax Financial Transactions
The financial transaction tax is not an idea whose time has just now come; it simply has returned. From 1914 to 1966, our country taxed all sales and transfers of stock. The tax was doubled in the last year of Herbert Hoover’s presidency to help us recover from the Great Depression. Today, 40 countries have FTTs, including the seven with the fastest-growing stock exchanges in the world. Eleven members of the European Union (including Germany and France) voted for a financial transaction tax to curtail poverty, restore services and put people back to work.
This is no soak-the-rich-idea. Rather than asking the Wall Street crowd to join us in paying a 6 to 12 percent sales tax, the major FTT proposal gaining support in the U.S. calls for a 0.5 percent assessment on stock transactions. That’s 50 cents on a $100 stock buy versus the $8.25 I would pay for a $100 bicycle.
Even at this minuscule rate, the huge volume of high-speed trades (nearly 400 billion a year) means an FTT would net about $300 billion to $350 billion a year for our public treasury. Plus, it’s a very progressive tax. Half of our country’s stock is owned by the 1 percenters, and only a small number of them are in the high-frequency trade game. Ordinary folks who have small stakes in the markets, including those in mutual and pension funds, are called “buy and hold” investors: They only do trades every few months or years, not daily or hourly or even by the second, and they’ll not be harmed. Rather it’s the computerized churners of frothy speculation who will pony up the bulk of revenue from such a transaction tax.
An FTT is a straightforward, uncomplicated way for us to get a substantial chunk of our money back from high-finance thieves, and we should make a concerted effort to put the idea on the front burner in 2016 and turn up the heat. Not only do its benefits merit the fight; the fight itself would be politically popular. One clue to its political potential is that the mere mention of FTT to a Wall Street banker will evoke a shriek so shrill that the Mars rover hears it. That’s because they know that this proposal would make them defend the indefensible: themselves.
First, the sheer scope of Wall Street’s self-serving casino business model would be exposed for all to see. Second, they would have to admit that they’re increasingly dependent on (and, therefore, making our economy dependent on) the stark-raving insanity of robotic, high-frequency speculation. Third, it’ll be completely ridiculous for them to argue that protecting the multi-trillion-dollar bets of rich market gamblers from this tax is more important than meeting our people’s growing backlog of real needs.
Unsurprisingly, then, Koch-funded operatives and other defenders of privilege are rushing out articles that amount to Wall Street gibberish: “FTT would hurt poor pensioners, farmers, long-term investors, job creation, liquidity … and blah, blah, blah.” There’s nary a mention of who will really be pinged: Wall Street’s gamblers and thieves. After all, to concede that they’ll be hurt, even a little, would elicit a coast-to-coast shout of, “Yes!”
A major push is being made under the banner of the “Robin Hood Tax.” This campaign offers a remarkable democratic opening. It widens America’s public policy debate from the plutocrats’ tired, narrow-minded mantra of defeat: “We’re broke. Big undertakings are beyond us. Shrink all expectations for yourselves, your children and your country’s future.” Instead, a new conversation can begin: “Look under that rock. There’s the money we need to invest in people. Let’s get America moving again!”
A sales tax on speculators can deliver tangibles that people need but Wall Street says we can’t afford — infrastructure, Social Security, education, good jobs, health care for all, etc. Just as important, it can deliver intangibles that our nation needs but Wall Street tries to ignore — fairness, social cohesion, equal opportunity, etc. It’s a gift for America’s future that literally would keep on giving. For more information and to join the fight, go to http://www.robinhoodtax.org.
By: Jim Hightower, The National Memo, March 2, 2016
“Plutocrats And Prejudice”: The Base Isn’t Taking Guidance The Way It Used To
Every time you think that our political discourse can’t get any worse, it does. The Republican primary fight has devolved into a race to the bottom, achieving something you might have thought impossible: making George W. Bush look like a beacon of tolerance and statesmanship. But where is all the nastiness coming from?
Well, there’s debate about that — and it’s a debate that is at the heart of the Democratic contest.
Like many people, I’ve described the competition between Hillary Clinton and Bernie Sanders as an argument between competing theories of change, which it is. But underlying that argument is a deeper dispute about what’s wrong with America, what brought us to the state we’re in.
To oversimplify a bit — but only, I think, a bit — the Sanders view is that money is the root of all evil. Or more specifically, the corrupting influence of big money, of the 1 percent and the corporate elite, is the overarching source of the political ugliness we see all around us.
The Clinton view, on the other hand, seems to be that money is the root of some evil, maybe a lot of evil, but it isn’t the whole story. Instead, racism, sexism and other forms of prejudice are powerful forces in their own right. This may not seem like a very big difference — both candidates oppose prejudice, both want to reduce economic inequality. But it matters for political strategy.
As you might guess, I’m on the many-evils side of this debate. Oligarchy is a very real issue, and I was writing about the damaging rise of the 1 percent back when many of today’s Sanders supporters were in elementary school. But it’s important to understand how America’s oligarchs got so powerful.
For they didn’t get there just by buying influence (which is not to deny that there’s a lot of influence-buying out there). Crucially, the rise of the American hard right was the rise of a coalition, an alliance between an elite seeking low taxes and deregulation and a base of voters motivated by fears of social change and, above all, by hostility toward you-know-who.
Yes, there was a concerted, successful effort by billionaires to push America to the right. That’s not conspiracy theorizing; it’s just history, documented at length in Jane Mayer’s eye-opening new book “Dark Money.” But that effort wouldn’t have gotten nearly as far as it has without the political aftermath of the Civil Rights Act, and the resulting flip of Southern white voters to the G.O.P.
Until recently you could argue that whatever the motivations of conservative voters, the oligarchs remained firmly in control. Racial dog whistles, demagogy on abortion and so on would be rolled out during election years, then put back into storage while the Republican Party focused on its real business of enabling shadow banking and cutting top tax rates.
But in this age of Trump, not so much. The 1 percent has no problems with immigration that brings in cheap labor; it doesn’t want a confrontation over Planned Parenthood; but the base isn’t taking guidance the way it used to.
In any case, however, the question for progressives is what all of this says about political strategy.
If the ugliness in American politics is all, or almost all, about the influence of big money, then working-class voters who support the right are victims of false consciousness. And it might — might — be possible for a candidate preaching economic populism to break through this false consciousness, thereby achieving a revolutionary restructuring of the political landscape, by making a sufficiently strong case that he’s on their side. Some activists go further and call on Democrats to stop talking about social issues other than income inequality, although Mr. Sanders hasn’t gone there.
On the other hand, if the divisions in American politics aren’t just about money, if they reflect deep-seated prejudices that progressives simply can’t appease, such visions of radical change are naïve. And I believe that they are.
That doesn’t say that movement toward progressive goals is impossible — America is becoming both more diverse and more tolerant over time. Look, for example, at how quickly opposition to gay marriage has gone from a reliable vote-getter for the right to a Republican liability.
But there’s still a lot of real prejudice out there, and probably enough so that political revolution from the left is off the table. Instead, it’s going to be a hard slog at best.
Is this an unacceptably downbeat vision? Not to my eyes. After all, one reason the right has gone so berserk is that the Obama years have in fact been marked by significant if incomplete progressive victories, on health policy, taxes, financial reform and the environment. And isn’t there something noble, even inspiring, about fighting the good fight, year after year, and gradually making things better?
By: Paul Krugman, Op-Ed Columnist, The New York Times, January 29, 2016
“The Sheldon Adelson Primary”: The GOP Presidential Primary; A Brawl Of Billionaires?
There are few spectacles more absurd or horrifying (depending on your perspective) than a group of political leaders who want to be president of the United States trooping to the lair of a billionaire to genuflect before him in hopes of winning his favor — and, of course, his money.
If you’re looking for a symbol of what presidential politics has become, particularly in the Republican Party, look no further than the festival of grovelling that will occur this weekend in Las Vegas. Alex Isenstadt reports:
Before Iowa and New Hampshire, GOP candidates are competing in the Sheldon Adelson primary, and some will travel to his posh Venetian hotel in Las Vegas this weekend in hopes of winning it. But one candidate — Marco Rubio — has emerged as the clear front-runner, according to nearly a half-dozen sources close to the multibillionaire casino mogul.
In recent weeks, Adelson, who spent $100 million on the 2012 campaign and could easily match that figure in 2016, has told friends that he views the Florida senator, whose hawkish defense views and unwavering support for Israel align with his own, as a fresh face who is “the future of the Republican Party.” He has also said that Rubio’s Cuban heritage and youth would give the party a strong opportunity to expand its brand and win the White House.
Adelson came to many people’s attention when he dropped $20 million in a vain attempt to get Newt Gingrich the GOP nomination in 2012, an effort doomed by the identity of his chosen candidate. It’s a good reminder that money is a necessary but not sufficient requirement for winning the primary. I suppose there might be some level of funding that could propel even someone as ridiculous as Gingrich to victory, but whatever it is — $200 million? $500 million? — it’s more than even someone like Adelson is going to spend in a primary, particularly when there are other billionaires out there doing the same thing.
We may be about to see an unprecedented arms race among Republican plutocrats. The Koch brothers are supposedly leaning toward Scott Walker, though they haven’t made a final decision; they’ll be holding their own audition for candidates this summer. Ted Cruz is backed by a hedge fund magnate named Robert Mercer; investment manager Foster Friess will once again keep Rick Santorum funded, as he did in 2012.
But the real question isn’t whether a candidate can find the one donor that will bring him to victory, it’s what happens when the next president takes office.
All this money — not just the volume but the way it’s being moved around — is making a mockery of our already porous campaign finance laws. One of the last restrictions on funding that the Supreme Court has left standing is the limit on direct contributions to candidates. This year, if you’re a billionaire, you can only give Jeb Bush’s presidential campaign $2,700 for the primary and $2,700 for the general election, because everyone agrees it would be inherently corrupting if you could just write him a check for $1 million or $10 million or $100 million.
But that won’t stop you. Here’s what you can do. You can go over to the Right to Rise PAC, which exists in order to make Jeb Bush president, and write it a check for that $1 million. And since Jeb is not officially a candidate, he can raise money for the PAC, and plan and shape its strategy for the election. After he declares himself a candidate he will no longer be allowed to coordinate with it, but by then the preparatory work will be done.
Which is why, in an unprecedented move, Bush has decided to outsource entire sectors of his campaign to the PAC, like advertising and ground organizing, while the official campaign will do far less. It could well be the future of presidential campaign organization. Election law expert Rick Hasen explains why this is so troubling:
In the old days (think the days of the fundraising of Bush’s brother, George W. Bush), the main way of gaining influence was by becoming a campaign bundler. Bundlers not only give the maximum few thousand dollars to the candidate’s campaign; they also get friends, relatives, and acquaintances to do the same. Now, one doesn’t have to become a bundler for the campaign to curry favor: One can simply write a check for $1 million or more to Right to Rise.
By signaling that Right to Rise is his campaign arm, Jeb Bush has broken down the wall between his super PAC and his campaign committee in the eyes of donors. Preventing coordination and preserving independence was one of the last walls that were left.
The next step will be simply handing $1 million checks to candidates. Right now that’s still illegal, but campaign finance opponents will challenge those candidate contribution limits as ineffective since (the Bush campaign will show) super PACs can serve almost the same purpose. Indeed, campaign lawyer Jim Bopp (the brains behind the Citizens United lawsuit) signaled as much this week, arguing that the way to take unaccountable money out of politics is to let individuals give whatever they want directly to candidates.
I suspect Hasen is right about this: Democrats are going to say that 2016 shows we need stronger campaign finance laws, while Republicans will say 2016 shows that the laws are toothless and irrelevant, so we might as well just remove the restrictions altogether.
The candidates themselves probably aren’t too worried about getting attacked as bought and paid for. They see the benefit they’ll get from being backed by a donor like the Kochs or Adelson on the one hand, and the bad press they’ll get from seeming like they’re in the pocket of a billionaire on the other hand, and say it’s a deal worth taking. What’s a few reporters’ questions that can easily be batted away (“I’m grateful for the support of any American who shares my vision for the future”) against all that cash?
“Dark money” — cash which is channeled through shadowy groups, obscuring where it originally came from — is extremely worrisome. But this new development is something else entirely. Sure, we’ll maintain the fiction that these PACs are “independent” and therefore there’s no corrupting influence associated with that money. But if you actually believe that at the end of a campaign in which he was showered with eight or nine figures worth of casino money, President Rubio wouldn’t be particularly open to hearing what Sheldon Adelson has to say about, say, internet gambling (which the magnate has worked hard to stamp out), I’d have to wonder whether you get to drink rainbows and ride unicorns on the fantasy planet you live on.
By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Plum Line Blog, The Washington Post, April 23, 2015
“A Contest Of Anti-Tax Purity”: The Fight For The Soul Of The Republican Party Is Over: The Rich Won Again
It was just eight months ago that a New York Times Magazine profile giddily described the rise of “a small band of reform conservatives, sometimes called reformicons, who believe the health of the G.O.P. hinges on jettisoning its age-old doctrine — orgiastic tax-cutting, the slashing of government programs, the championing of Wall Street — and using an altogether different vocabulary, backed by specific proposals, that will reconnect the party to middle-class and low-income voters.”
After the Republican Party had turned itself into a machine committed relentlessly to the singular goal of cutting taxes for the rich, the reformicons seemed to be poised to take control of the party’s intellectual apparatus.
The reformicons always assumed they could bypass Congress and focus all their attention on developing an innovative platform for a presidential candidate. (This was a shaky plan to begin with, as a prospective Republican president would need to sign something passed by Congress.) But as the Republican candidates have formulated their early platforms, the party’s center of gravity, rather than jettisoning its hoary policy of orgiastic tax-cutting, has instead continued and even deepened its fervor.
The Republican Party’s determination to cut taxes for the rich was never rooted in electoral calculation. (Indeed, this has always been a handicap for the party to overcome.) It arose from the fact that extremely powerful forces within the party, including but not limited to its funders, believed in it as a matter of ideology as well as self-interest. The plutocrats initially held back in the face of the reformicon movement, perhaps unaccustomed to facing any challenge within the party, which for decades has treated their doctrine as holy writ revealed to the world by Reagan himself.
They were never going to yield control of the party without a fight. The disintegration of campaign-finance restrictions has given the funding class greater leverage over the nomination, and as the presidential field has formed its domestic-policy platforms, its influence has been evident. Jeb Bush is wooing the fanatically anti-tax Club for Growth. Scott Walker has firmly allied himself with the party’s most unreconstructed supply-siders. Rand Paul is promising “the largest tax cut in American history.” Ted Cruz is, well, Ted Cruz. The Republican primary has turned into a contest of anti-tax purity. “We’ve got maybe an embarrassment of riches here in that we’ve never been able to support somebody before, and now we may get overwhelmed with people we think are worthy of support,” gloats recently departed Club for Growth president Chris Chocola.
Nowhere is the triumph of the supply-siders more evident than in the progress of Marco Rubio and Mike Lee. Rubio and Lee are the paradigmatic spokesmen for the reformicon platform — Lee as an ideas pitchman, Rubio as a candidate.
Last year, Rubio and Lee unveiled a tax-reform plan that their allies touted as a manifesto of reform conservatism, positioning the Republican Party on the side of hard-press working families rather than the rich. Lee’s plan “actually help[s] middle-class families rather than mostly cut taxes on the investor class,” gushed Ross Douthat, one of the most fervent and optimistic advocates of the reform-conservative faction.
Eventually, the Tax Policy Center crunched the numbers on Lee’s plan and found that it did nothing of the sort. Its provisions to benefit hard-pressed low-income workers turned out to be wildly oversold. Brookings economist Isabel Sawhill concluded, “very few if any low income families with children would benefit from the plan.” And, far from being the “tax reform” it claimed to be, Rubio and Lee had merely constructed a gigantic tax-cut plan that would reduce federal revenue by $2.4 trillion over a decade, a larger tax cut than George W. Bush passed in 2001. What’s more, the Lee-Rubio plan lavished far more benefits on the rich. The average earner in the lowest income quintile would save on average $79 a year, or 0.5 percent of her income, from the plan. An earner in the second-lowest quintile, the heart of the working class, would save $338 a year, or one percent of her income. The top one percent earner would see its income boosted by 2.8 percent on average, or more than $40,000 a year. The plan was simply a reprise of Bush-era debt-financed regressive tax cuts.
Reform conservatives took the setback in stride. Perhaps this was just an oversight or a mild computational error. Douthat hopefully suggested that Rubio and Lee would take a second pass at the issue and rectify the problem:
The liberal response to the Lee plan’s disappointing score, from Chait and others, has been to suggest that it illustrates the continuing unrealism of G.O.P. proposals. But notably, Lee himself didn’t respond by, say, denouncing TPC and insisting that some version of dynamic scoring would make the deficit numbers come out right; he responded by announcing that he was partnering with Marco Rubio (cough, 2016, cough) to develop a revised family-friendly proposal.
And, indeed, Rubio and Lee have come out with a revised version of their plan. But it didn’t get better. It got much, much, much worse. The new Rubio-Lee plan keeps most of its old structure, with its stingy treatment of low-income workers. It layers on top of that two changes: a far more generous treatment of business income, and a complete elimination of all taxes on capital gains and dividends. [Update: The plan would also, unbelievably, completely eliminate the tax on inherited estates, which for a married couple only begins to apply to inheritances above $10 million.] Both of these new features would lavish massive additional tax cuts on the rich, in addition to those already in the original version. The new Rubio-Lee plan would surpass anything George W. Bush or Mitt Romney ever proposed to do in its ambitions to relieve the richest Americans of their tax burdens.
Perhaps the fullest measure of the supply-siders’ triumph can be seen in the acquiescence of many of the reformicons themselves. Ramesh Ponnuru and Yuval Levin, both reform conservatives featured prominently in the Times story, responded to the new Lee-Rubio plan with fawning praise. James Pethokoukis, a reformist conservative, calls the plan “a big step toward persuading middle-income America that Republicans care about more than just the richest 1 percent.” (If this is a big step toward persuading America that Republicans care about more than the rich, what would the next step be? Legalizing servant-flogging?)
Perhaps the reform conservatives have capitulated completely in the name of party unity. Or maybe they were misunderstood from the beginning and never proposed to deviate in any substantive way from the traditional platform of massively regressive, debt-financed tax-cutting. Either way, the movement has, for now, accomplished less than nothing.
By: Jonathan Chait, Daily Intelligencer, New York Magazine, March 5, 2015
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