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“He Pays Less, We Pay More”: Donald Trump’s Worthless Real Estate Math

Donald Trump’s presidential campaign disclosure reports declare that his buildings are worth a lot of money, in his view demonstrating phenomenal business acumen and how the Trump name adds luster. But in property tax filings Trump describes the same properties as almost worthless, asserting one of his biggest properties is in such an awful location that its retail space is unrentable—what he’d probably define as a loser.

There are multiple lessons in the different faces Trump presents to voters and tax officials that shine a light on Trump’s character and conduct. There are also lessons for you if you own a home or other real property—or plan to someday—because when big property owners pay less, more of the burden falls on you.

Consider first the Trump National Golf Club Westchester, located roughly 33 miles north of Trump Tower in Manhattan. It features a 50,000 square foot, $20 million clubhouse that Trump built after he acquired the 140 acres in the late 1990s. There are 18 holes and a majestic waterfall that Trump says is 101 feet high. Trump boasts that “no expense was spared” in creating a “world class” golf course.

It is located in Briarcliff Manor village, a tony Manhattan suburb where half the homes are valued at more than $700,000, according to town assessor Fernando Gonzalez. Houses listed for sale at that price typically are between 2,200 and 3,700 square feet and sit on a fraction of an acre.

In his presidential disclosure Trump valued the golf course and its massive clubhouse at more than $50 million. In tax documents Trump valued the same property at just $1.35 million.

That is a 97% variance, an irreconcilable difference that raises yet again questions about Trump’s integrity, not to mention the size of his fortune, which he has testified he values differently as his emotional state shifts, regardless of objective facts.

Trump’s presidential disclosure indicates he made $10.3 million off the golf course last year and early this year. That alone should sound alarms since businesses normally sell for multiples of their profits, not a tiny fraction of profits.

A Tale of Two Numbers

This was no one-time error. Throughout his career Trump has filed official government documents that place wildly different values on properties, presenting high values to bankers, investors and the public and small numbers to tax authorities and others, such as contractors and vendors seeking payment for work they performed. He has been accused of dishonest conduct and using mismatching financial data again and again by government auditors, bankers and investors, though he negotiated civil settlements in every case, many on terms kept secret because judges sealed the files.

In mid-May, when Brian Ross, chief investigative correspondent for ABC News, was about to air two reports about the vast difference in valuations—reports in which I was featured as a tax expert—Trump upped the golf course value for tax purposes to $9 million.

While that‘s more than six times Trump’s original figure, it is also at least 82% less than what he declared was “true, complete and correct” in his campaign disclosure filing, which declared the golf course is worth north of $50 million.

Understanding Property Valuation

Modest differences in property values are routine. It’s best to think of real estate as falling within a range of values, but not a range with a top that is more than 37 times the bottom.

As someone who writes about taxes, I decided a few years ago to challenge the re-assessment on my home a few blocks outside Rochester, N.Y. I thought the assessment was higher than the market value of my home. I also wanted to experience the appeals process to understand it. The town and I differed by $30,000, or 9%. The town lowered my assessment by $20,000 or 6% after looking at comparable sales in my neighborhood. That’s the kind of range assessors from New York to California tell me is common in appeals: single digits, not 97.3% or even 82%.

Keep in mind as you read this that the original federal levy, more than two centuries ago, was a property tax. Every farm and workshop in the original 13 states was assessed based on its size and the crops or products it could produce. The property tax is levied at the local and state level.

You might think that after 220 years of experience, taxing real estate would be based on objective measures using hard data. You might think that, but as Trump knows well, the system is easily manipulated to shift the tax burden off grand properties and onto those whose estates are not so well endowed.

You Gotta Have Friends

For those who want deep discounts, there is nothing like having friends in high places.

When Trump wanted to reduce the property taxes on the Trump International Hotel & Tower in Chicago, the presumptive Republican nominee turned to a well-connected local Democrat named Edward M. Burke.

Since 1969 Burke has served on the Chicago City Council, whose members are called aldermen. Burke also runs a business helping property owners get discounts on their property taxes. That strikes me as a conflict of interest of the first order, but Illinois law allows it.

The tower, the second tallest building in the Windy City, gets more than 1,500 separate property tax bills because many floors consist of individually owned apartments, according to the Chicago Sun-Times. The Trump Organization has said the tower, which soars more than 1,300 feet above the Chicago River, cost $847 million.

Two intrepid Chicago Sun-Times reporters added up all those property tax bills, separated out those that went to Trump and his partners and found that, thanks to Alderman Burke, team Trump got Trumpian size discounts.

Burke also sued the public schools, the city, the county and other taxing authorities for refunds of “erroneous, excessive, illegal” taxes that were so egregiously high the tax bills should be voided. This suggests that if elected, Trump will not become known as a president who fought for better education for America’s children, but to pay no property taxes.

So far Burke’s tactics have saved Trump and his partners $11.7 million, a 39% reduction in their total property tax bills over seven years, the Sun-Times reporters calculated. The savings may grow if Burke can squeeze refunds from the schools and other agencies.

Most intriguing is the value applied to retail space at the Trump International. It was valued at $75 million after the tower opened in 2009.

Kelly Keeling Hahn, a Burke firm lawyer, wrote that “the hotel is NOT located in the prime Michigan Avenue hotel area,” adding that “the entire retail space of the building is unleasable.”

Assuming that Hahn’s letter is an accurate statement of the facts, how could Trump have become involved with such a total loser of an investment, especially given his endlessly repeated claims of exceptional prowess as a businessman and real estate investor? How could he have failed to notice that the tower bearing his name in huge letters was not on the Magnificent Mile where high-end retailers flourish?

The assessor slashed the retail space property tax valuation by almost $49 million, a 65% reduction.

Whether it was Hahn’s letter that proved persuasive—or the nearly $100,000 in campaign contributions Trump spread around to Mayor Rahm Emanuel, Cook County Democrats and other local pols—is unclear. What is clear is that everyone else in Chicago will pay the price for Trump’s tax savings in terms of higher taxes, less government or the city taking on more debt. That’s a hot issue in Chicago right now because the Emanuel administration sharply raised property tax rates to stanch red ink flowing freely across city ledgers.

When your property tax bill comes, ask yourself how much you are shouldering the burden of those who tell one government agency they are fabulously rich, but tell the tax man their properties are nothing but losers.

 

By: David Cay Johnston, The Daily Beast, May 24, 2016

May 29, 2016 Posted by | Donald Trump, Property Taxes, Real Estate | , , , , | Leave a comment

A ‘Kill-And-Cover-Up’ Police Culture?: Systemic And Institutional Problems That Extend Far Beyond One Allegedly Trigger-Happy Cop

When public officials refuse to release a video that shows alleged misconduct by a police officer, you should only expect the worst.

That’s particularly true in Chicago, where one “bad apple” too often has signaled a bushel of cover-ups and other problems underneath.

Such are the suspicions that haunt the city’s stalling for more than a year the release of a dashcam video that shows white police officer Jason Van Dyke firing 16 shots into the body of black 17-year-old Laquan McDonald.

Mayor Rahm Emanuel denounced the behavior as a case of one allegedly bad apple. Yet the video and various actions taken before and after the shooting point to systemic and institutional problems that extend far beyond one allegedly trigger-happy cop.

Why, for example, did the city sit on the dash-cam video for more than a year before a judge ordered its release on open-records grounds?

Emanuel and Cook County State’s Attorney Anita Alvarez have said the time was needed to conduct proper investigations. But compare that to the Cincinnati case last summer in which black driver Samuel DuBose was fatally shot on camera by University of Cincinnati police officer Ray Tensing during a routine traffic stop.

The video, which contradicted Tensing’s account of being dragged by DuBose’s vehicle, was released and Tensing was charged with murder and fired from the department in less than two weeks.

The Chicago video similarly refutes a police union spokesman’s allegation of McDonald lunging at police with a knife on the night of Oct. 20, 2014.

Instead it shows the teen, reportedly with PCP in his system, holding a small knife but moving away from police when Van Dyke opens fire — and inexplicably keeps firing at McDonald’s flinching body on the ground. Only Van Dyke fires his weapon and none of the estimated seven police officers on the scene moves to help McDonald. Van Dyke has been charged with first degree murder.

Then there’s the question of what happened to video from a security camera at a nearby Burger King. A district manager for the restaurant chain has said police visited shortly after the shooting and were given access to the surveillance equipment. The next day, he has said, a portion of the video was missing.

Witnesses to the shooting told Jamie Kalven, an independent journalist and human rights activist whose nonprofit called the Invisible Institute filed a FOIA request to have the dashcam video released, that police tried to shoo witnesses away from the scene after the shooting instead of collecting names and other information.

And why, many wonder, did the mayor persuade the City Council to authorize a $5 million settlement for McDonald’s family, which had not filed a lawsuit. Emanuel claimed a desire to avoid jeopardizing the case. But Chicagoans with long memories — like me — wonder whether the cash is reparations or a form of hush money.

The city fought to conceal the video, even after the Wall Street Journal, the Chicago Tribune, and a freelance journalist all filed FOIA requests for its release.

To Kalven, the most important issue here is not just the shooting but how governmental institutions — from the police to the mayor’s office — responded to it, he says.

“And at every level,” he told me in a telephone interview, “we can see they responded by circling the wagons and creating a narrative that they knew was completely false.”

Kalven’s institute worked seven years to open up police files and establish an online database of misconduct complaints against police officers — 97 percent of which resulted in absolutely no disciplinary action.

Among other issues, Chicago and other cities will have to determine, like the rest of us, how to adjust to the new video age, an age that exposes so much to public view that used to be swept under various rugs.

The McDonald video reveals the flipside of the so-called “Ferguson effect,” a widely alleged tendency by some police to hesitate before responding to crime scenes for fear of getting caught in a career-ending cellphone video. If fear of video can prevent atrocities like that revealed in the McDonald case, that’s not a bad thing.

 

By: Clarence Page, Tribune Content Agency; The National Memo, November 30, 3015

December 1, 2015 Posted by | Police Abuse, Police Unions, Public Officials | , , , , , , , | Leave a comment

“A Notorious Union Buster And Exploiter Of Working Families”: Why Build A National Monument To A Union-Busting Robber Baron?

Occasionally, I see something that is so bizarre, so out of place, so wrong that I have to assume I’m hallucinating. For example, I could have sworn I was delusional when I heard about the National Park Service’s Pullman National Monument in Chicago.

George Pullman? My mind boggled! Our tax dollars are being spent to build a national park in tribute to a narcissistic, paternalistic, brutalistic 19th-century robber baron? Incredibly, yes. Pullman, a notorious union buster and exploiter of working families, is having his history mythologized by today’s Powers That Be, portraying him as a model of the corporate order’s historic virtue. At the Feb. 19 official consecration of Pullman’s park, Chicago’s thoroughly corporatized mayor, Rahm Emanuel, even gushed: “This will be a monument … to Pullman’s role in building the American dream.”

“History,” as the old adage goes, “is written by the winners,” even when they’re losers as human beings. Pullman was most certainly a loser as a human being for this “dream,” as Rahm refers to it, was a nightmare to Pullman’s workers. They toiled in his factories making rail cars, including the luxury “Palace” sleeper for elite train travel. Pullman considered himself a beneficent employer, having built a 600-acre town for the workforce and vaingloriously naming the new home-place for himself. PullmanTown included houses he rented to his workers, churches, schools, a bank, library, and parks — all owned by his company. Indeed, when officials announced this year that Pullman’s town was becoming an honored part of America’s park system, officials attested to his generosity by hailing the town as a place he created “to provide his employees a good life.”

The workers in the town of Pullman, however, were less charmed, for he ruled the burg as autocratically as he did his factories. No saloons or “agitators” were allowed, nor did he allow any public speeches, town meetings, independent newspapers or even open discussions. In a letter residents wrote to the American Railway Union, they offered an example of Pullman’s greed and exploitation of his workers: “Water which Pullman buys from the city at 8 cents a thousand gallons he retails to us at 500 percent advance … Gas which sells at 75 cents per thousand feet in Hyde Park, just north of us, he sells for $2.25.”

The resentful residents created a little ditty that summed up the surreal feel of the place: “We are born in a Pullman house, fed from the Pullman shops, taught in the Pullman schools, catechized in the Pullman Church, and when we die, we shall go to Pullman hell.”

In 1894, the workers got Pullman’s hell on Earth. Not only did he drastically cut his workers’ (he referred to his workers condescendingly as his “children”) wages five times, he also refused to lower their rent. He had guaranteed a 6 percent return to the wealthy investors who financed the town, he explained — and the investors’ needs came first. What a dysfunctional father! The suffering imposed by this feudal lord on his workers led to the historic Pullman Strike that quickly spread nationwide, led by union icon Eugene Debs.

This uprising was not a problem for Lord George, though. He and other railroad royals rushed to the White House and got President Grover Cleveland to dispatch the U.S. Army to join police and militia forces to crush the labor rebellion. Thirty workers were killed, Debs was arrested on a trumped-up conspiracy charge and all laborers who’d joined the strike were fired and blacklisted.

Now, 120 years later, we taxpayers are financing a monument to this loser’s greed. The only way that Pullman National Monument can have any legitimacy is for the grounds to be strewn with sculptures of the 30 dead workers he killed.

 

By: Jim Hightower, The National Memo, September 2, 2015

September 4, 2015 Posted by | George Pullman, National Monuments, Union Busting | , , , , , , | Leave a comment

“The Distracting Game Of Mirrors”: How To Survive The Hillary Hype; Liberal Dreams And The Media’s Big Elizabeth Warren Trap

Hillary Clinton is reportedly set to end the biggest non-mystery in American politics today by announcing her presidential candidacy. But even as we learn that she’s running, along with when and how she’ll make the announcement (via social media and video, we’re told, on Sunday afternoon), it seems the only actual mystery about the race will remain unsolved: How does Clinton propose to restart the engines of American opportunity that built a broad middle class after World War II, which began to sputter and fail over the last 30 years?

With neither a grand thematic backdrop for an announcement – Seneca Falls? Ferguson? McAllen, Tex.? Outside a small-city McDonald’s during a fast food workers’ strike? – nor a big address to outline the themes of her campaign, Clinton will leave defining what she stands for to the media for a little while, at least, and that’s risky. So far, journalists only seem able to define Clinton in contrast to a past or future opponent, asking whether she’ll attack President Obama (it’s a dumb media given that she has to), distance herself from her husband, the popular former president, or push back against the economic populism of Sen. Elizabeth Warren, even without Warren in the race.

If that limbo is risky for Clinton, it’s even more dangerous for progressives. As we wait to find out how Clinton will respond to the increasingly populist pulse of her party’s base, we’re beset by substitute, over-personalized storylines, heavy on drama but light on issues: Will Clinton co-opt the Warren wing of the party, or will she stand up to it? Is she going to rebuke Wall Street, a la Warren, or offer succor?

We’ve even got a surrogate battle of Ivy League economists: Is she closer to Harvard’s Raj Chetty, whose studies of upward mobility focus on how to restore it (which is said to be a more optimistic, plutocrat-friendly analysis), or Columbia’s Joseph Stiglitz, who recently wrote, in an essay shared with the Clinton team, that an effective economic policy must go beyond incremental policies like raising the minimum wage and improving education, to include “redistribution” of income – a once-routine assumption of public policy that now sounds like communism to a lot of business-oriented Democrats. (For the record, Clinton has met with both men.)

Without a Clinton challenger – and specifically, without Warren – most of the media struggle to explain what will matter to Democrats in the race. Witness this bizarre exchange between CBS’s Charlie Rose and Warren herself last week. Exasperated at Warren’s failure either to declare her own candidacy or critique Clinton’s, the respected interviewer – the “Charlie Rose” brand has long stood for substance, at least – began to badger the senator for more “specifics” about her agenda – after she’d already talked about reducing student loan interest rates and hiking the minimum wage.

ROSE: It’s hard to get to you be more specific. You talk about the Democratic Party’s a fluid thing and is going here and there and it’s always changing. But we want you to really-

WARREN: I’m sorry, what was nonspecific about let’s reduce the interest rate on student loans to 3.89%?

ROSE: You’ve been saying that in a lot of different–

WARREN: I’m there.

ROSE: I know. You’ve been saying that in a lot of different places and that’s a very specific position.

WARREN: And I have supported our efforts to try to get the minimum wage—

ROSE: And you say, well—

WARREN: I’ve supported it at $10.10. I would support it at a higher number. And I’m willing to sit down and negotiate with those who are willing to raise the minimum wage.

ROSE: What we’re trying to understand is that you represent — you really have become the voice of a wing of the Democratic Party, and maybe all of the party. What we want to know is where does Elizabeth Warren want to see this party go?

WARREN: Oh golly, how could you not know?

ROSE: In terms of minimum wage. In terms of income inequality. In terms of a whole range of things.

WARREN: I’m ready.

ROSE: You’re ready to tell them where you are and where you think the country…And where you differ from former Secretary of State Clinton. Why can’t you tell us that? Why isn’t that interest in the interest of a full debate about the future of the country, the future of the Democratic Party and who the nominee ought to be?

WARREN: Charlie, I’ll tell you where I stand on all of the key issues. It’s up to others to say whether they stand there as well or they stand in some different place. I’ll tell you where I stand on minimum wage. I’ll tell you where I stand on equal pay for equal work. I’ll tell you where I stand on expanding—

ROSE: Name me one thing you would like to see — name me one thing that you would like to see Hillary Clinton do and say and commit to that she has not committed to?

In fact, Warren has laid out her agenda in an eight-point plan to restore the middle class, which includes a minimum wage hike, protecting and expanding Social Security, strengthening labor laws, restoring a more progressive tax code, and building infrastructure. Similar ideas are in the “Ready for Boldness” statement the Progressive Change Campaign Committee is organizing around (Senators Harry Reid and Al Franken are among 5,000 Democrats who’ve signed their names to the statement), trying to “incentivize” Clinton to move to the left. PCCC leaders recently met with members of Clinton’s campaign team.

But if journalists can’t frame these ideas in terms of someone “attacking” Hillary Clinton, they’re not interested, and they’ll insist there’s no progressive agenda.

Meanwhile, frustrated in their efforts to gin up a fight between two popular Democratic women, some will find surrogates elsewhere that let them frame the narrative in terms of “centrist” Clinton facing down and “taming” progressive critics –  or being tamed by them. Politico gave us an example this week with “Rahm shows Hillary how to tame the left.”

As Elias Isquith explained, however, the piece took itself apart, as it argued that Emanuel won because he co-opted progressive ideas, not because he ran away from them. Still, it was framed as a “lesson” for Clinton to thumb her nose at the party’s base. Let’s hope she’s not listening.

There are real divisions among Democrats – and maybe even within the Clinton camp – over both tone and substance when it comes to economic policy. Personally, I’m with Joseph Stiglitz, who wrote in an essay shared with the Clinton campaign:

The increase in inequality and the decrease in equality of opportunity have reached the point where minor fixes — such as modest increases in the minimum wage and continuing to strive to improve education and educational opportunity — will not suffice. A far more comprehensive approach to the problem is required, entailing redistribution and doing what one can to improve the market distribution of income and to prevent the unfair transmission of advantage across generations.

But we have no evidence that Clinton herself disagrees, and progressives should ignore the distracting game of mirrors the media will continue to play with the Democratic frontrunner and her base. Personally, I’m not seeing Sunday as the kick-off to Clinton’s campaign (though there are reports that her announcement tweets will deal with issues). That will come when she begins to outline her own substantive agenda for closing the widening income and opportunity divide.

 

By: Joan Walsh, Editor at Large, Salon, April 12, 2015

April 14, 2015 Posted by | Elizabeth Warren, Hillary Clinton, Progressives | , , , , , , | Leave a comment

“Growing Numb To Mass Violence”: We Need To End The Sound Of Silence In Congress

What if we had a mass shooting and nobody noticed?

That gloomy thought came to mind as I listened to the unsettling sound of silence that followed the September 16 Navy Yard shooting in the nation’s capital that killed 12 people, plus the shooter.

Three days later it came to mind again as a shooting spree in Chicago’s Back of the Yards neighborhood made national news. Thirteen were injured, including a 3-year-old boy who was shot in the face. Four people have been charged in the reportedly gang-related incident.

President Obama eloquently expressed the grief, outrage and frustration that every decent American should feel about “yet another mass shooting” at the Navy Yard.

But overall reaction to the workplace slaughter by a reportedly deranged gunman was sadly and noticeably subdued compared to the national outrage that reignited the national gun debate following the massacre of 20 children and six educators in Newtown, Connecticut.

That’s because after all the anguish, debate and proposed legislation that emerged from the Newtown tragedy, the legislation was voted down in the Senate and everyone returned to other matters — like House Republicans voting uselessly to repeal Obamacare more than 40 times. Opposition to even modest measures was too strong, especially from rural centers of pro-gun culture.

If even the massacre of children and the shooting of then-Rep. Gabrielle Giffords, an Arizona Democrat, could not move Congress to pass new gun safety measures, it’s no wonder that the energy for gun safety seems to have drained out of Capitol Hill.

But that doesn’t mean that we Americans can’t do anything but wring our hands over the continuing carnage. As even mass shootings lose their ability to shock us, both sides of the gun debate need to face a bracing reality: The gun violence problem is not only local and it’s not only about guns.

Those points were urgently expressed by New Orleans mayor Mitch Landrieu and Philadelphia mayor Michael Nutter in a joint speech in Washington last Thursday. They called for a new “surge” in attention and national action to the “virus” of gun-related violence.

Calls for national action are hardly new, but I was encouraged by the mayors’ refusal to be, as Landrieu put it, bogged down by the “seemingly mind-numbing debate about gun control.”

Instead they emphasized remedies everyone should be able to agree on. They included more cops on the street, as in a stronger COPS program — Community Oriented Policing Services — passed by Congress under President Bill Clinton; stronger cooperation with the federal government to target criminals with illegal guns and stronger measures against straw purchases and interstate gun traffickers.

Yet the two mayors also called for more personal responsibility and engagement by parents, pastors, coaches and neighbors. “Babies having babies just doesn’t work,” Landrieu said.

I’ve heard Chicago’s Mayor Rahm Emanuel, who reportedly left some scheduled meetings with members of Obama’s cabinet in Washington early after hearing of the mass shooting back home, express a similar agenda in his slogan: “Policing, prevention, penalties and parenting.”

Bottom line: A problem as complex as urban violence must be pushed back the same way it emerged: in every sector of community and political life.

But first we have to care. Citing the number of black men killed by homicide in his city in 2012, Nutter observed: “If the Ku Klux Klan came to Philadelphia and killed 236 black men, the city would be on lockdown.”

The same would be true if “international terrorists killed 236 Philadelphians of any race,” he said. “And, yet, 236 African-American men murdered in one city — not one word. No hearings on the Hill, no investigations … nothing but silence.”

We need to end the sound of silence. It was easier to take national political action in the ’90s. The economy was doing well and Congress was not as fiercely divided as it is today. But, as the two mayors said in Washington, we should not be more willing to pay for safe streets in Afghanistan than to make our streets safer at home.

 

By: Clarence Page, The National Memo, Featured Post, October 2, 2013

October 3, 2013 Posted by | Gun Control, Gun Violence | , , , , , , , | Leave a comment

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