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“The Art Of The Hustle”: Donald Trump’s ‘Charity’ Is A Money-Making Scam

No wonder Donald Trump calls himself an ardent philanthropist.

He has likely made millions off it.

He is not just some cheap miser who avoids digging into his pocket for charity, as The Smoking Gun and The Washington Post have described him.

He does not simply avoid giving.

He gets.

Maybe his book should have been called The Art of the Hustle.

His biggest score appears to have come in 2006, and if he ever releases his tax return for that year, we will learn if he is a felon or just a liar.

Either way, the self-proclaimed “ardent philanthropist” seems to give precious little money to charity while receiving millions in deductions by donating land he valued at somewhere between 13 and 50 times what he paid for it.

Back in the 1990s, Trump paid $2 million for two parcels of land totaling 436 acres north of New York City with the hope of building a pair of golf courses.

He initially sought to overcome various environmental obstacles and permitting hurdles by applying his self-described mastery of deal making. He placed a phone call to the then supervisor of the Westchester County village of Yorktown, Linda Cooper.

“Linda, just let me build the golf course—I’m rich, you’ll like it,’” Trump said, by her recollection.

Cooper would tell the press that Trump “just didn’t want to go through the rules.”

She offered the same description of Trump that others would later offer during his present presidential campaign.

“He’s like the bully on the playground,” Cooper told the Journal News. “Whether you are a big person or a little person, you have to follow the same rules. If he chooses to stop the process, so be it.”

The rules remained the rules, and Trump did indeed choose to stop the process in 2002.

“You have done a terrible disservice to your constituents who have sadly lost out on a tremendous opportunity,” Trump said in a letter to Cooper.

Trump suggested to reporters that he had been making a sacrifice to begin with.

“My problem is that I can make much more money with housing than I can with a golf course,” he said.

He announced, “I have put a ‘For Sale’ sign out,” and said it was sure to attract “every developer in Westchester.”

He had yet to sell the land four years later, when he donated it to New York State for a park.

“You know me,” he said. “I never throw up my hands. I fight back. I could have sold the property to a developer, because it’s zoned for houses. Instead, I’m giving it to the state, which is the best thing to do.”

The park would of course be named after himself. The gift came with a further condition.

“The name will be prominently displayed at least at each entrance to the park,” read a letter from his attorney to the state.

A press conference was held at the new Donald J. Trump State Park. Trump was joined by his wife, Melania, and two of his children, Donald Jr. and Ivanka.

“This is so beautiful, am I allowed to change my mind?” he joked to his wife.

He said his children had suggested donation as a way “to do something spectacular.”

“I have always loved the city and state of New York and this is my way of trying to give something back,” Trump said, as then-Gov. George Pataki stood beside him, beaming approvingly. “I hope that these 436 acres of property will turn into one of the most beautiful parks anywhere in the world.”

A reporter asked the value of the land in question.

“People have told me about $100 million,” Trump said.

The press took that to mean the donation was worth $100 million, an impression Trump made no effort to dispel.

A town planning official would later suggest that the land was more likely worth in the vicinity of $15 million.

The question now is whether Trump claimed the $100 million valuation as a charitable deduction in his income tax return for 2006. That would seem to constitute tax fraud, a felony.

But a list of Trump’s supposed charitable donations compiled by his campaign and given to the Associated Press is topped by this entry:

“LAND DONATED TO NYS OFFICE OF PARKS—YORKTOWN, NY—436 ACRES…$26,100,000”

That appraisal would be more in keeping with reality and on the honest side of outright fraud if he used it in his tax return. He would not be a felon after all, just a liar who exaggerated the value of the land by some $73,900,000.

He has said, “I fight like hell not to pay a lot of tax,” so he almost certainly sought a big-time tax break from the donation.

Even the much smaller deduction resulting from the $26.1 million valuation would likely still be worth millions more than the $2 million he paid for the land.

Talk about ardent philanthropy!

Trump also remains that rare soul who made money off the 9/11 attacks. He gave little if any of his own money in the aftermath when the whole world was offering to help, but he accepted $150,000 to offset supposed business losses at his building several blocks from Ground Zero.

By contrast, Rosie O’Donnell gave $1 million the day after the attacks. Trump has called her a fat pig.

On Saturday, Trump seemed to reduce his 9/11 net profit by presenting the September 11 Memorial with a check for $100,000 while making his first visit there.

But The Washington Post reported that the check was actually drawn on the Trump Foundation. And Trump does not seem to have given anything to the foundation that bears his name since 2008. The funds handed out in his name have actually come from such various sources as a World Wrestling Federation, a Queens carpet wholesaler, and a prominent ticket scalper known as The Ticket Man.

On Monday, a spokesman for the September 11 Memorial was unable to confirm that Trump’s check had indeed come from the foundation rather than The Donald himself. Should the money prove to have come out of his pocket, he will remain $50,000 ahead from 9/11.

Meanwhile, Donald J. Trump State Park was closed in 2010 as a result of budget cuts. Signs prominently bearing his name are still posted not only at the entrances, as required by the agreement, but on nearby parkway exits.

Only his 2006 tax return will show if Trump is a felon or a liar.

Only that return will document if he was not a big-time giver but a big-time getter.

Only all his tax returns—which the IRS says he has no reason not to release despite his talk about audits —will tell the full story of The Art of the Hustle.

 

By: Michael Daly, The Daily Beast, April 11, 2016

April 13, 2016 Posted by | Charitable Donations, Donald Trump, Tax Returns | , , , , , , | 1 Comment

“Dubious Legal Tactics”: How Mitt Romney’s Millions Went Tax-Free Overseas

On the same day that Mitt Romney cracked his birther “joke,” new evidence indicated that he and his partners at Bain Capital have used questionable methods to avoid federal taxes – including a scheme that transforms corporate stock into untaxed offshore “derivatives,” and a practice that converts management fees into capital gains, which are taxed at a far lower rate.

While nobody has asked to see the Republican candidate’s birth certificate, as he said at a Michigan rally on Friday, everybody has a renewed interest in examining the tax returns he continues to withhold.

The complex and tricky tax shelters used by Bain Capital continued to emerge from as lawyers and other experts examined the hundreds of pages of previously confidential company documents uncovered by the Gawker website in an exclusive series this week. The authenticity of the documents was confirmed by a Bain spokesperson, who said that the company deplores the public posting of its proprietary materials.

In a sense, the latest revelations about how Bain protected its vast income from taxation are scarcely surprising to anyone familiar with the world of private equity where Romney made his fortune, estimated at $250 million or more. Avoiding taxes is among the most important attractions of that industry for the wealthy clients it aims to attract.

But several experts who have looked over the new Bain documents have warned that dubious legal tactics may have been employed by some of the company’s investment vehicles, including several that are listed on the partial returns that Romney has already released. Those experts, such as Victor Fleischer, a law professor at the University of Colorado, and Daniel Shaviro, who teaches tax law at New York University’s law school, have raised questions about both the equity “swap” and fee conversion maneuvers.

Companies like Bain make money both from investment income, which is taxed at the lower capital gains rate, and from management fees, which are taxed as ordinary income like wages. If the firm can somehow transform its management fees into capital investments, then it can avoid the 35 percent top federal income tax rate, and pay the 15 percent capital gains rate instead. That is what Bain evidently does to keep its partners’ taxes low – around the 13 percent rate that Romney admits to paying. But critics like Fleischer say this is an abusive tactic that cannot be justified by law, even though the IRS has never attempted to stop companies that use it.

“Unlike carried interest, which is unseemly but perfectly legal, Bain’s management fee conversions are not legal,” the Colorado professor wrote on his blog. “If challenged in court, Bain would lose. The Bain partners, in my opinion, misreported their income if they reported these converted fees as capital gain instead of ordinary income.”

Equally troubling is the use of offshore accounts to avoid taxation on stock holdings. This tactic is called a “total return equity swap,” because it involves swapping real equities for derivative paper investments that provide all the same dividends as the stock itself – but aren’t subject to federal taxes. According to Shaviro, this practice was sufficiently blatant to elicit a warning from the IRS two years ago. He wrote recently that those who used it over the past decade “were coming perilously close to committing tax fraud, in cases where the economic equivalence to direct [stock] ownership was too great.”

In the complex territory of tax law, precise boundaries aren’t always clear. What makes the “total return equity swap” potentially perilous for Romney, however, is the use of foreign accounts to avoid taxes, which is what many Americans suspect him of doing. Despite the accounts that he has maintained in Switzerland, the Cayman Islands, Luxembourg, Bermuda and other tax havens, Romney’s campaign has repeatedly denied, with little credibility, that his wealth was invested abroad to evade taxes.

The proof may well lie within the tax returns that he is so determined to conceal. Wisecracks about the president’s alleged foreign birthplace may not distract concerned voters from the overseas accounts where Romney’s money has been hidden.

By: Joe Conason, The National Memo, August 25, 2012

August 26, 2012 Posted by | Election 2012 | , , , , , , , , | 1 Comment

“Something Smells”: About That Fishy Romney Individual Retirement Account

 haven’t been much of a fan of the personalized Romney-bashing this campaign season. I avoid the rudely juvenile moniker “Willard.” I thought the whole “Corporations are people” supposed-gaffe was a stupid nothing. I find thinly-veiled attacks on Romney’s LDS heritage to be idiotic and reprehensible. I don’t know enough about Romney’s conduct at Bain to intelligently praise or criticize his managerial performance there.

If you are going to mount a direct personal criticism of a candidate, you should know what you’re talking about. You should say it straight without smarminess or insinuation. And you should put your name to it.

I’ll put my name to one issue. Governor Romney has–in practical, though quite possibly not legal terms–evaded paying his proper taxes. Of course, as a matter of broad policy, he’s taken advantage of loopholes to pay way too little. He and his Bain colleagues are exhibits A, B, and C in the case to tighten the carried interest thing and related provisions. His roughly-14 percent tax rate is galling. Yet the particulars of this suff go further, too.

I’ve presumed all along that whatever he did was legal and standard fare for the uber-wealthy. Now I’m rwondering. He’s been weirdly and unacceptably secretive about these matters. He hasn’t released the full history of his returns. His stance is doubly weird when one considers how strange it is for a major presidential contender to hold complicated offshore bank accounts in Switzerland or the Caymen Islands at all.

Then there’s that fishy IRA, which has a reported rough valuation of between 20 million and 100 million dollars. Given the $30,000 (or lower) annual contribution limits for an IRA, It strains credulity to believe that properly-valued securities of the legally-permitted value would swell by a factor of 1,000, as such securities apparently did.

It seems patently obvious that whatever securities Romney and his Bain colleagues initially contributed were under-valued for strategic tax purposes. The convoluted details of Bain’s divided classes of IRA securities hardly assuage my concerns. That wasn’t ethical or right. I’m not so sure it was legal, either.

 

By: Harold Pollack, Ten Mile Square, The Washington Monthly, July 9, 2012

July 11, 2012 Posted by | Election 2012 | , , , , , , , , | Leave a comment

“An American Hero?”: Right-Wing Lauds Facebook Co-Founder’s Decision To Renounce US Citizenship

Eduardo Saverin, the co-founder of Facebook whose falling out with the company and its CEO Mark Zuckerberg was the subject of the 2010 blockbuster The Social Network, renounced his US citizenship last week, and the right has wasted no time labeling him a hero.

Saverin, who owns a roughly four percent stake of Facebook, announced that he was expatriating last week, just in time to avoid paying a federal capital gains tax on the fortune heading his way when the social site files its IPO.

Forbes Magazine, the conservative-leaning and business friendly magazine, ran an article with the headline “For De-Friending The U.S., Facebook’s Eduardo Saverin Is An American Hero.” John Tamny writes:

Saverin’s departure is also a reminder to politicians that while they can obnoxiously decree what percentage of our income we’ll hand them in taxes, what they vote for won’t necessarily reflect reality. Indeed, as evidenced by Saverin’s renunciation, tax rates and collection of monies on those rates are two different things. Assuming nosebleed rates of taxation were a driver of Saverin’s decision, politicians will hopefully see that if too greedy about collecting the money of others, they’ll eventually collect nothing.

Tamny seems to be convinced that Saverin’s departure will open the floodgates for dozens of US executives, investors and other wealthy businessmen who have made fortunes off of stocks and bonds to dramatically renounce their citizenship, break through the shackles of big government and book a one-way ticket to wherever in an attempt to hold on to every last penny they’ve earned. What Forbes and The Heritage Foundation ignore is that the capital gains tax is at a historically low rate, and even proposals to increase it slightly would still fall well short of approaching the rate during the 1970s.

Saverin’s decision to flee the United States is also remarkably shortsighted. As Farhad Manjoo notes on PandoDaily today, Saverin’s life story in particular is one that is quintessentially American.

 

By: Adam Peck, Think Progress, May 14, 2012

May 15, 2012 Posted by | Taxes | , , , , , , , , | 1 Comment

   

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