Tag: Taxes

Not Enough Bullets

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By agreeing to pay penalties without admitting wrongdoing, the pharmaceutical companies that flooded the United States with opioids will be able to deduct billions from their taxes as a result.

Needless to say, the laws involving this need to change, pronto:

Four companies that agreed to pay a combined $26 billion to settle claims about their roles in the opioid crisis plan to deduct some of those costs from their taxes and recoup around $1 billion apiece.

In recent months, as details of the blockbuster settlement were still being worked out, pharmaceutical giant Johnson & Johnson and the “big three” drug distributors — McKesson, AmerisourceBergen and Cardinal Health — all updated their financial projections to include large tax benefits stemming from the expected deal, a Washington Post analysis of regulatory filings found.

The Dublin, Ohio-based Cardinal Health said earlier this month it planned to collect a $974 million cash refund because it claimed its opioid-related legal costs as a “net operating loss carryback” — a tax provision Congress included in last year’s coronavirus bailout package as a way to help companies struggling during the pandemic.

The deductions may deepen public anger toward companies that prosecutors say played key roles in a destructive public health crisis that kills tens of thousands of Americans every year. In lawsuits filed by dozens of states and local jurisdictions, public officials have argued that the companies, among other corporate defendants, flooded the country with billions of highly addictive pills and ignored signs they were being steered to people who abused them. 

Gee, you think that allowing these companies to turn their malevolent activities into tax breaks might be a bit controversial? 

………

All four firms disavow any wrongdoing or legal responsibility. The companies have said they produced government-approved prescription pills, distributed them to registered pharmacies and took steps to try to prevent their misuse.

U.S. tax laws generally restrict companies from deducting the cost of legal settlements from their taxes, with one major exception: damages paid to victims as restitution for misdeeds. Still, Congress has placed stricter limits on such deductions in recent years, and some tax experts say the Internal Revenue Service could challenge the companies’ attempts to deduct opioid settlement costs.

Harry Cullen, a Brooklyn-based activist who has worked to hold drug companies accountable for the epidemic, said it is “incredibly insulting” that companies would try deduct the settlement payments. “As if they are donating it to these people who they harmed in the first place.”

I would also note that the entire “No admission of guilt” settlement regime needs to end.

When the end result is, “No harm, no foul, pay 15% of what you made thought your evil deeds,” these companies will continue to do harm to society.

A Free State First

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Maryland has become the first state in the nation to enact a tax on online advertisements.

They had to override a veto though, because Governor Larry “Rat-F%$#” Hogan vetoed the bill, because he promised no new taxes ever.

Revenue is to be dedicated to education:

Maryland today became the first state in the nation to impose a tax on digital advertising revenue, overriding an earlier veto from the governor and incurring the wrath of piles of Big Tech businesses that are all but guaranteed to sue.

The bill (PDF) levies a state tax of up to 10 percent on the annual gross revenues of all digital advertising aimed at users inside Maryland state. Proceeds from the new tax are explicitly earmarked to go into an education fund dedicated to improving Maryland public schools.

“Right now, they don’t contribute,” the bill’s primary sponsor, Sen. Bill Ferguson (D) said of the bill. “These platforms that have grown fast, and so enormously, should also have to contribute to the civic infrastructure that helped them become so successful.”

Both chambers in the state’s General Assembly, its Senate and its House of Delegates, approved the bill by wide majorities last year. Maryland Gov. Larry Hogan vetoed the bill in May, but it had sufficiently high support in both chambers of the legislature to pass a veto override, and both houses approved the veto override this week.

It will work on a sliding scale, with larger companies, like Google and Facebook, paying up to 10% of gross revenue from the portion of their ads from Maryland, which constitutes about 1.8% of the US population.

………

A coalition of small and medium businesses and trade groups launched a coalition last year to lobby against the tax. The group, which bills itself as Marylanders for Tax Fairness, argues that the tax will “place an unnecessary and undue burden on the state’s entrepreneurs and job creators.”

Yadda, yadda, yadda,

The internet economy wants not to pay taxes.

F%$# that.

………

Among the coalition members are not only several Maryland-based businesses and organizations, including several local Chambers of Commerce, but also most of the large tech-related trade groups. All of the usual suspects who represent advertising, Internet, tech, telecom, or media firms are on the list, including the Internet Association, the IAB, the NCTA, and TechNet. Those four groups represent every online firm from Amazon to Zillow and just about any brand you can name in between.

The stakes for all the firms involved may go well beyond Maryland. Other states, including high-population New York, are considering similar advertising revenue bills of their own.

I’m not sure what the right rate is, though I do support an aggressively progressive tax.

Again, a Good Start

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It appears that some philanthropists have come to realize that the structures of philanthropies in the United States don’t generate much in the way of charity for the level of tax deductions provided.

Given my background, I founded a small charity in the early 1990s,* this remains an area of interest for me.

There has been a massive growth in various charitable organizations, and a commensurate growth in the taxes not paid,  but not a growth of the actual charity provided:

A group of high-profile philanthropists and foundations, along with estate and gift tax experts, have come together to push for reforms to charitable giving laws that would increase the amount of money available for nonprofits.

Their goal is to unlock some of the US$1 trillion sitting in private foundations and donor-advised funds (DAFs) that is not obligated to be distributed to nonprofits under current law. The group, known as the Initiative to Accelerate Charitable Giving, also aims to make it easier for the 90% of taxpayers who don’t itemize to gain a tax benefit for giving to charity.

“The purpose is to get money to working charities so they can put money to work,” says Ray Madoff, a professor of estate and gift tax estate planning, at Boston College, and the main force behind the U.S. initiative along with Houston philanthropist John Arnold.

……… 

Under current regulations—established in 1969, according to Madoff—private foundations are obligated only to pay out 5% of their assets to public charities annually. The rest can be invested as the foundation chooses, and can be passed down through generations. 

DAFs, which have been an increasingly popular way to set aside money for charity, allow individuals to make donations into an investment fund managed by a public nonprofit, and get an immediate tax deduction. There is no requirement for funds to be distributed to a qualified public charity, since the DAF itself is managed by one.

The existence of these tax-advantaged vehicles, which today hold US$1 trillion in assets, raises a question that Madoff has studied for years. That is: What is society getting in return for not receiving those tax dollars? The answer, she realized, was “a lot less than we think.” 

………

And while individuals do actually make grants to charities from their DAFs, they aren’t required to do so. “It’s not that everybody is not spending anything, it’s that the vehicle facilitates large contributions of money—and there are definitely US$1 billion DAF accounts that are subject to no payout requirements,” Madoff says. 

Another problem is that private foundations can meet their annual 5% payout requirement by distributing funds to a DAF instead of directly to an operating charity. 

The U.S. provides “significant tax benefits,” Madoff says, “but we only get them halfway there, and the [law isn’t] doing much to get the money all the way to charities.”

………

This coalition is asking Congress and the incoming presidential administration of Joseph Biden, for “emergency charitable stimulus” legislation to require private foundations to boost their annual payout rate to 10%, and to require a mandatory payout rate of 10% for DAFs, for three years, specifically to facilitate more dollars reaching charities hit by the Covid-19 crisis. According to the Independent Sector, an organization that supports the nonprofit sector, 7% of nonprofits in the U.S. are expected to close because of the pandemic.

………

“When tax benefits only apply to 10% of the population, then we are amplifying the voices of the wealthiest,” Madoff says. “It’s really important that tax benefits be available for all taxpayers.” 

……… 

The group also believes Congress should ensure that private foundations can’t meet their payout obligations by transferring funds to a DAF, or by paying family member salaries (which is currently allowed by law).

For DAFs, the group is recommending that all funds in these vehicles are distributed within 15 years. They are also recommending an “aligned benefit rule,” that would allow a donor to get a break on capital gains taxes and estate and gift taxes upon funding their DAF, but would withhold the income-tax deduction until distributions are made to a public charity.

Modern charity increasingly serves as an employment guarantee to the Professional Managerial Class (PMC)†, which explains, for example, why college has become so expensive.

It all goes to special assistants to the senior VP in charge of filling out useless paperwork.

Endless number of people sending reports and creating data that never gets used for anything useful.

It’s all Dave Graeber’s Bullsh%$ Jobs.

*Even today, total turnover is probably less than $½ million a year, and it has no employees.
†Or, as I call them, the Democratic Party establishment’s (There is no Democratic Party establishment) base.

Pass the Popcorn

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States are in conflict over the collection of income taxes for remotely working employees.

States like New Hampshire and Connecticut, who have large numbers of people who work in other states, are attempting to claw back taxes that would have been collected if they still went into the office:

The rise of remote workers during the Covid-19 pandemic has led to a showdown in the U.S. Supreme Court over which state gets to tax their income.

More than a dozen states submitted legal briefs this week to weigh in on a petition that New Hampshire filed with the court in October to stop Massachusetts from taxing residents working remotely. The petition says Massachusetts doesn’t have the right to tax the income of New Hampshire residents who previously commuted to their jobs in Massachusetts but now work from home.

The case hasn’t yet been scheduled for a private conference among Supreme Court justices, who will decide whether they will grant it a hearing. A ruling would have significant budget implications for states that have lost billions of dollars in tax revenue during the pandemic and could set a precedent on taxing remote workers that endures past the coronavirus crisis.

The U.S. Congress has for years discussed setting clearer rules for interstate taxation disputes, but hasn’t passed any legislation. New Hampshire took its complaint directly to the U.S. Supreme Court, which has original jurisdiction over disputes between two or more states.

This does raise some interesting issues, and I would expect it to make it to the Supreme Court, as this is a classic sort of interstate conflict that they resolve, but I’m an engineer, not a doctor, dammit!*

*I love it when I get to go all Dr. McCoy!

Recognizing the Obvious After 50 Years

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Tax cuts for the rich do not boost the economy. 

That money goes into speculative and parasitic activities:

You don’t have to be a scholar to understand why it’s absurd to suggest that reducing the tax burden for rich people isn’t likely to be a particularly effective strategy when it comes to juicing economic activity.

………

Let’s be honest: Very few rational people believe in trickle-down economics. That’s not to say no rational people promote it. It’s just to say that the rational people who do, almost always have ulterior motives, usually involving the preservation of their own wealth.

………

There’s little utility in rehashing this further. I’m preaching to the choir. But I bring it up Friday because I’m running through the “checklist” of stories I keep on a yellow legal pad next to my second monitor. I try to get through that checklist each week. Sometimes, Friday is a “catch up” day. One of the stories I wanted to highlight this week, but didn’t get around to mentioning, is a new working paper by David Hope, of the London School of Economics, and Julian Limberg, of King’s College London, both PhDs.

The paper “utilizes data from 18 OECD countries over the last five decades to estimate the causal effect of major tax cuts for the rich on income inequality, economic growth, and unemployment.”

You’ll never guess what Hope and Limberg found.

I’m just kidding. Their findings are entirely predictable. Here are the main points:

  • The results suggest that tax reforms do not lead to higher economic growth. The effect size of major tax cuts for the rich on real GDP per capita is close to zero and statistically insignificant. The findings are very similar when matching upon pre-treatment covariate trajectories. Major tax cuts for the rich do not lead to higher growth in either the short or medium run.
  • Although the results show very slight indications of a flash in the pan effect of tax cuts for the rich on unemployment, these findings are neither statistically significant nor robust.
  • The results show that major tax cuts lead to a significant increase in inequality and that this effect becomes stronger with time. Three years after the reform, the top 1% income share increases by almost 0.6 percentage points in countries with a major tax cut. Over five years, tax reforms increase the top 1% share of pre-tax national income by more than 0.8 percentage points. This effect is highly statistically significant, with P<0.0001.

So not surprised. 

Trickle down has never been about improving the public welfare, it’s been about the powerful preserving their power.

At least, that’s what the Bolsheviks at the London School of Economics say.

Not enough bullets

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Wisconsin Senator Ron Johnson is doing his best to kill payouts to ordinary Americans in the next Covid relief bill, while in the past he has been pushing big tax breaks for himself. 

Republican values, neh?

Republican Sen. Ron Johnson on Friday moved to block emergency survival checks to millions of Americans, citing concerns about the federal deficit. Johnson’s move not only follows his vote for a massive $500 billion corporate slush fund — it also follows his successful effort to enrich himself with a giant tax cut that expanded the deficit.

Johnson, who is worth an estimated $39 million, led the fight in 2017 to create special tax breaks for so-called “pass-through” businesses, or real estate shell companies. Johnson was one of several Republican senators who backed the last-minute provisions inserted in the bill — and who listed income from those pass-through entities on their federal financial disclosure forms.

Based on those federal filings, Johnson stood to personally reap up to $205,000 from the tax cut provisions he championed.

………

On Friday, Johnson moved to block a bipartisan proposal, from Vermont Independent Sen. Bernie Sanders and Sen. Josh Hawley, R-Mo., to give Americans emergency $1,200 checks, amid a sudden increase in poverty and mass starvation across the country.

Johnson argued that the direct payment proposal would be “mortgaging our children’s future” — an argument that he did not make when he led the fight to personally enrich himself with a massive tax cut only three years ago.

Mr. Johnson, go Cheney yourself.

This

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Airbnb went to the Canadian government looking for Covid aid. The Canadian government made moves to end Airbnb’s tax evasion instead.

For the uninitiated, this is called, “Good government,” and we need to see more of this:

It’s about to get a lot more expensive to stay at short-term rentals in Canada as Ottawa announced a new tax on Airbnb and other short-term accommodation platforms.

“In order to ensure that the GST/HST applies consistently and effectively with respect to supplies of short-term accommodation in Canada facilitated by platforms, the Government proposes to apply the GST/HST on all supplies of short-term accommodation in Canada facilitated through a digital platform,” according to the federal government’s fiscal update released on Monday by Finance Minister Chrystia Freeland[1].

Platforms themselves will now be required to collect and remit those taxes in cases where property owners fail to do so.

“In these circumstances, the accommodation platform operator would be deemed to be the supplier of the short-term accommodation,” the update reads. “This approach recognizes their necessary and fundamental role in making these supplies, and limits administrative and compliance costs for the parties involved.”

One reason that short-term rentals have been cheaper than hotels is because hotels had to collect and pay sales tax while Airbnb didn’t.

Provinces or British Columbia, Quebec and Saskatchewan already apply a sales tax on Airbnb accommodation.

………

The tax will come as a major blow to Airbnb, who had asked for the government to bail out the platform’s hosts in April.

The Parliamentary Secretary for Housing Adam Vaughan dismissed that request with one word: “No”.

Good.

Throw the Book at Them

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The National Rifle Association has admitted to looting by senior executives in tax filings.

Given the level of corruption of this organization, the option of the dissolving it should be seriously considered by authorities:

After years of denying allegations of lax financial oversight, the National Rifle Association has made a stunning declaration in a new tax filing: Current and former executives used the nonprofit group’s money for personal benefit and enrichment.

The NRA said in the filing that it continues to review the alleged abuse of funds, as the tax-exempt organization curtails services and runs up multimillion-dollar legal bills. The assertion of impropriety comes four months after the attorney general of New York state filed a lawsuit accusing NRA chief executive Wayne LaPierre and other top executives of using NRA funds for decades to provide inflated salaries and expense accounts.

The tax return, which The Washington Post obtained from the organization, says the NRA “became aware during 2019 of a significant diversion of its assets.” The 2019 filing states that LaPierre and five former executives received “excess benefits,” a term the IRS uses to describe executives’ enriching themselves at the expense of a nonprofit entity.

The disclosures in the tax return suggest that the organization is standing by its 71-year-old chief executive while continuing to pursue former executives of the group. The filing says that LaPierre “corrected” his financial lapses with a repayment and contends that former executives “improperly” used NRA funds or charged the nonprofit for expenses that were “not appropriate.”

“Corrected”, my ass.  The organization is a complete scam, and it needs to be shut down.

Not Just the Worst Attorney General Ever, Also Corrupt

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It looks like Trump’s Attorney General William Barr may have intervened to quash the tax evasion case against Caterpillar, one of Barr’s former clients, when he became AG.

Certainly, the timing is HIGHLY suspect:

Before William Barr became President Donald Trump’s choice to lead the U.S. Department of Justice, he represented Caterpillar Inc, a Fortune 100 company, in a federal criminal investigation by the department.

Much was at stake for Caterpillar: Since 2018, the Internal Revenue Service has been demanding $2.3 billion in payments from the company in connection with the tax matters under criminal investigation. The company is contesting that finding.

A week after Barr was nominated for the job of attorney general, Justice officials in Washington told the investigative team in the active criminal probe of Caterpillar to take “no further action” in the case, according to an email written by one of the agents and reviewed by Reuters.

The decision, the email said, came from the Justice Department’s Tax Division and the office of the deputy attorney general, who was then Rod Rosenstein.

………

Since then, a source close to the case says, the investigation has “stalled.” The order to freeze the Caterpillar investigation has not been previously reported.

Reuters was unable to determine why Justice issued the “no further action” directive. It was not issued by Barr, as it came before he was confirmed. A Justice Department spokesperson said Barr recused himself from any Caterpillar discussions once he became attorney general, but declined further comment. Barr, in testimony during his confirmation hearings, said rules of legal privilege precluded him from discussing his work for the company.

………

Potential conflicts of interest, whether real or apparent, often arise when high-powered lawyers switch between private practice and government service. Bruce A. Green, a former federal prosecutor who teaches at Fordham Law School, said it is not unheard of for attorney generals to have clients who had business before the DOJ. He noted that in 2009, President Barack Obama’s attorney general, Eric Holder, recused himself from a case involving Swiss Bank UBS, a prior client.

But Green said he could not recall a case where agents were told to take no further action on a matter involving an incoming attorney general’s former client without some kind of explanation. “Why would you just stop?” he asked.

Because Barr made it clear that he would be Trump’s guy, but he just needed a “little favor”, that’s why.

………

The government’s questions about Caterpillar’s tax structure started with a whistleblower lawsuit in 2009 that laid out what it said was a complex “tax dodge” to route Caterpillar profits on parts sales through a company in Switzerland. Then, in 2014, the U.S. Senate Permanent Subcommittee on Investigations dug into the issue, and alleged the company adopted a sales strategy that “shifted billions of dollars in profits away from the United States and into Switzerland, where Caterpillar had negotiated an effective corporate tax rate of 4% to 6%.” The Senate investigators quoted company insiders who said the system was structured for “tax avoidance.”

………

The next year, a federal grand jury in Illinois launched a criminal investigation. In March 2017, federal agents raided three Caterpillar offices, wheeling out evidence in large black plastic boxes. In a report written for the government, a consultant for the investigators, Leslie Robinson, called the tax strategy “fraudulent rather than negligent.”

Two weeks after the raid, Caterpillar Chief Executive Jim Umpleby announced the hiring of Barr as company counsel. Barr would “take a fresh look at Caterpillar’s disputes with the government, get all the facts, and then help us bring these matters to proper resolution based on the merits.”

………

This October, Robinson communicated again with the investigators. In emails reviewed by Reuters, she asked what had happened to the case, explaining that a Reuters reporter had inquired. That’s when LeBeau explained, copying other agents and a prosecutor on the email, that they had been told to take no further action a week after Barr’s nomination 20 months ago.

“We were given no additional explanation,” he wrote.

I REALLY want to see Barr lose his law license, but if he loses his license to practice law, that would be good too.

This guy is openly, and aggressively corrupt.

Can We Please Give Texas Back to Mexico?

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In the episode of the continuing series, Of Course They Did, It’s Texas, a bill has been submitted in the state house that would tax solar and wind power, but not fossil fuels, because ……… I don’t know, maybe owning the libs?

There are fools, there are damn fools, and then there is the Texas legislature:

Power bills likely would rise next year for Texas consumers who get their electricity from wind, solar, coal and nuclear generation if the Legislature approves a bill filed this week.

The bill from state Rep. Ken King would add 1 cent to every kilowatt hour of energy generated. The tax likely would be passed on to consumers, adding about $12 a month to bills for households that use 1,200 kilowatt hours of renewable power sources each month. Power generated from natural gas would be exempt from the tax.

Wind produced about 20 percent of electricity last year in Texas, which is the nation’s leader in wind power generation, and 47 percent came from natural gas, according to the state’s grid manager, the Electric Reliability Council of Texas.

Luke Metzger, executive director of the Austin-based clean energy advocacy group Environment Texas, said the bill makes no sense.

It flies against the rhetoric of Texas’ market-based system of electricity, putting the thumb on the scale for natural gas and raising taxes on Texans by $2.3 billion every year,” he said in a prepared statement. “It would also discourage wind and solar power, which are reducing pollution, helping us tread more lightly on the planet, and boosting rural economies.

Seriously, this guy should have been drowned at birth.

Pass the Popcorn

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 A federal appeals court just called bullsh%$ on Trump’s attempt to use his being President* to prevent investigation of tax evasion and fraud.

The excerpts of the opinion indicate that the judges have no f%$#s left to give with either Trump’s lawyers or the DoJ obfuscations:

A federal appeals court ruled Wednesday that Manhattan’s district attorney can enforce his subpoena for President Trump’s tax returns, rejecting a bid by Trump’s lawyers to kill the request on grounds it’s a malicious political ploy and potentially setting up another high-stakes showdown at the Supreme Court.

………

The unanimous ruling was issued by a three-judge panel of the 2nd U.S. Circuit Court of Appeals, which concluded, “We have considered all of the President’s remaining contentions on appeal and have found in them no basis for reversal.”

(emphasis mine)

That’s law speak for, “Your eyes are brown because you are completely full of sh%$.”

District Attorney Cyrus R. Vance Jr. is seeking eight years of the president’s tax returns and related documents as part of his investigation into alleged hush-money payments made ahead of the 2016 election to two women who said they had affairs with Trump years prior. Trump denies the claims. Investigators want to determine whether efforts were made to conceal the payments on tax documents by labeling them legal expenses.

………

The panel that heard the president’s appeal shot down his claim that the district attorney’s investigation is limited only to the alleged payments made by Michael Cohen, Trump’s former lawyer, to adult-film actress Stormy Daniels and former Playboy model Karen McDougal — saying in their ruling that the “bare assertion . . . amounts to nothing more than implausible speculation.”

………

Vance’s bid for Trump’s tax records has been stalled since last year, when he issued the subpoena to Mazars.

Trump’s lawyers, who have signaled that they would ask the Supreme Court to look at the case again, have already lost at the high court, which in July rejected their initial argument that, as president, Trump is immune from prosecution. The justices said, however, that Trump could try again with a different approach.

I am amused.

From the Department of About F%$#ing Time

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 The State of Ohio has ordered GM to tax incentives for a factory that it has closed. 

A better idea is not to pay these bribes to the gods of capital in the first place:

The state of Ohio on Monday ordered General Motors to repay $28 million in public subsidies for reneging on its promise to keep its sprawling Lordstown plant open.

The automaker, which had pledged to keep operations going until 2040, closed its assembly plant last October, drawing criticism from elected officials in both political parties, including President Donald Trump. At the time, GM cited the collapsing market for small cars; Lordstown produced the compact Chevrolet Cruze.

But state officials said the closure violated the terms of two economic development agreements GM signed with Ohio more than a decade ago. Between 2009 and 2016, the company received more than $60 million in tax credits to maintain operations at the massive plant, which employed over 4,000 people.

On Monday, the Ohio Tax Credit Authority said GM must pay back roughly half of those tax benefits, as well as provide an additional $12 million in community support in the Mahoning Valley, the economically depressed region where the plant was located. The funds are targeted for education and job training at Youngstown State University and other colleges, community programs and infrastructure projects.

………

Although the clawback falls short of the total $60.3 million that GM received, the state’s action is significant, said Greg LeRoy, executive director of Good Jobs First, a nonprofit agency that tracks corporate subsidies and violations.

“The $28 million still stands as the biggest clawback we can point to” nationwide, he said. Yet he believes that the state should have pursued a total refund. “It’s kind of a two-thirds of a loaf for taxpayers.”

Unfortunately, it appears that authorities then doubled down on the same f%$#ing failed strategy:

………

At the same time, the tax authority awarded GM a new tax credit to support the battery plant. In return for a promise to create 1,000 jobs, the company will receive a 15-year tax break estimated to be worth $13.8 million over its term.

The numbers are clear on this:  These incentives never pay for themselves. 

It cost Scott Walker reelection in Wisconsin, but until a few more political “Flaming Datums” are out there, this insanity is likely to continue.

Of Course This Drops Just Before Kol Nidre

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The New York Times has gotten its hands on more than 20 years of Donald Trump’s income tax returns, and it appears that this is the real deal*, revealing a pattern of massive losses and next nothing in taxes paid.

I’m about to eat, and then fast, so I have barely had a chance to glance at the article.

The nickel tour appears to indicate that he’s a money loser who cheats on his taxes. 

This raises the question:  How has the Trump Org continued to be a going concern over all of these years?

My answer is that he’s been laundering money for the mob, whether it is US, or, as is more likely, foreign organized crime.

To quote Bette Davis, “Fasten your seat belts, it’s going to be a bumpy night.”

*As opposed to Rachel Maddow’s widely mocked expose of a handful of Trump’s tax documents in 2017.

Pass the Popcorn

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A New York judge has ordered Eric Trump to give a deposition on the Trump Organizations’s business practices by October 7. 

Trump wanted it deferred until after the election, but the judge was not buying that sh%$.

Assuming that the deposition is leaked, and that is not beyond the realm of possibility, we will either see him incriminate himself, because he is very stupid, or constantly taking the 5th, because he understands just how stupid he is.

In either case, it’s pretty obvious that the Trump Org is a criminal enterprise, even if you ignore the obvious, that they are mobbed up as f%$#:

A state judge on Wednesday ordered Eric Trump to be deposed no later than Oct. 7 in the New York attorney general’s examination of the Trump Organization’s financial practices, rejecting a protest by President Trump’s son, who has said he is too busy to meet with investigators until after November’s election.

The ruling was handed down by New York Supreme Court Justice Arthur Engoron after nearly two hours of arguments in a lawsuit brought by state investigators conducting the civil investigation.

The president’s company is managed now by his two sons, Eric Trump and Donald Trump Jr., both of whom have taken active roles in their father’s reelection efforts. An attorney for Eric Trump said during Wednesday’s hearing that the president’s son travels nearly seven days a week to make campaign-related appearances.

“This court finds that application unpersuasive,” Engoron said, referring to Eric Trump’s stated need to put off an interview until mid-November. He added that he felt Eric Trump’s attorney had cited no legal authority to support a bid to delay the deposition.

………

The probe is a civil matter, not a criminal one. James’s office has said the Trump Organization potentially misled lenders and duped tax authorities. The state attorney general’s office began investigating the company last year after the president’s former personal attorney Michael Cohen, a former executive with the company, gave Congress copies of financial statements from 2011 to 2013.

This should be fun.

Killing Social Security and Boosting His Reelection Chances

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He is hoping to force Congress to make this a permanent tax cut, because the bill comes due in January, millions of Americans may be owing thousands of dollars in back taxes.

It will have the effect of increasing take home pay in the short term, which might give the economy a temporary boost, particularly for a tax as regressive as the Social Security tax, which cuts off at $137,700.00.

It will also have the effect of emptying the Social Security Trust Fund in about 2 years.

On the bright side, I think that many, and possibly most, of employers are going to collect the taxes anyway, because the money is still owed, just deferred, particularly since there is a cost to rewrite their payroll withholding software:

The Treasury Department began implementing President Trump’s plan to allow a payroll tax deferral, an executive action he says will help households weather the pandemic-ravaged economy but which faces significant practical hurdles and skepticism from employers.

The government’s announcement came late Friday, just four days before it is scheduled to take effect. It postpones some payroll taxes that would normally be due between Sept. 1 and Dec. 31 and makes them due between Jan. 1 and April 30, 2021. Under this approach, employers who opt to stop some paycheck withholding now could withhold twice as much as usual early next year.

Mr. Trump on Aug. 8 ordered the Treasury Department to allow the tax deferrals under a law that lets the Treasury secretary postpone tax deadlines after a disaster. It still could take time for private payroll companies to reprogram their systems, and employers concerned about costs and legal exposure may not bother changing workers’ tax withholding.

………

The government’s action doesn’t actually change the underlying taxes, because only Congress can do that. Employees would still owe the taxes eventually. So someone making $75,000 annually could save as much as $1,550 in 2020 but would have to pay that same amount later.

Mr. Trump wants Congress to forgive that tax liability. The IRS document issued late Friday says employers must pay those taxes in the first four months of 2021 or “may make arrangements” to collect the taxes from employees.

“The guidance makes it clear the only purpose of this scheme is to give the illusion of a tax cut before the election,” said Seth Hanlon, senior fellow at the Center for American Progress, a group aligned with Democrats.

………

The U.S. Chamber of Commerce, the National Council of Chain Restaurants and other trade associations warned that it would be unfair to impose potential future costs on workers and said a system where employees could choose whether to participate would be unworkable.

………

One very large employer looks likely to participate—the federal government that Mr. Trump controls. The National Finance Center at the Department of Agriculture, which processes payrolls for more than 600,000 federal workers at multiple agencies, said last week it was preparing to implement the tax deferral in September.

Forcing hundreds of thousands of federal employees to take tax deferrals could put pressure on lawmakers to forgive the taxes later, as Mr. Trump wants them to do.

When a policy developed to help Republican electoral prospects runs afoul of the U.S Chamber of Commerce, you know that this policy is f%$#ed up and sh%$.

I So Wish that Sanders Were the Nominee

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Elon Musk, welfare queen and libertarian, decided to go after Bernie Sanders’ proposal for a wealth tax, Sanders notes that most of Musk’s wealth is from government subsidies. (Literally, Tesla would not have generated a penny of profit without the various subsidies that it has benefited from and resold)

Elon Musk believes that everyone should have the initiative that he had, and inherit an emerald mine:

Bernie Sanders showed Friday he isn’t afraid to call out hypocrisy – particularly when it comes from someone like Tesla CEO Elon Musk.

Musk on Friday tweeted out a meme critical of Sanders and his brand of socialism. The tweet was in response to an article about a bill Sanders introduced Thursday that would place a 60% tax on the wealth gained by billionaires such as Musk during the coronavirus pandemic. The meme, dubbed the “Official Bernie Sanders drinking game!” showed a picture of Sanders along with the text: “Every time the Bernster mentions a free government program, chug somebody else’s beer.”

Sanders, who’s no neophyte when it comes to defending his leftist views and programs, wasn’t about to back down from such criticism. In a tweeted response, he called out Musk for benefiting to the tune of billions of dollars from government subsidies and linked to an article from The Los Angeles Times that detailed the assistance Musk and his companies have received.

“Every time Elon Musk pokes fun at government assistance for the 99%, remember that he would be worth nothing without $US4.9 billion in corporate welfare,” Sanders wrote. “Oh, Elon just l-o-v-e-s corporate socialism for himself, rugged capitalism for everyone else.”

Elon Musk is one disfiguring accident away from being a super-villain.

I’ll Have What She’s Having

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In Case You Don’t Get the Reference

The New York State Attorney General has has filed a lawsuit to dissolve the NRA for pervasive corruption and self dealing.

When I heard that news, I reacted like Meg Ryan at the deli:

The chief executive of the National Rifle Association and several top lieutenants engaged in a decades-long pattern of fraud to raid the coffers of the powerful gun rights group for personal gain, according to a lawsuit filed Thursday by the New York attorney general, draining $64 million from the nonprofit in just three years.

 In her lawsuit, Attorney General Letitia James called for the dissolution of the NRA and the removal of CEO Wayne LaPierre from the leadership post he has held for the past 39 years, saying he and others used the group’s funds to finance a luxury lifestyle.

 She also asked a New York court to force LaPierre and three key deputies to repay NRA members for the ill-gotten money and inflated salaries that her investigation found they took.

 ………

The attorney general requested that the court bar the four men — LaPierre, general counsel John Frazer, former treasurer Woody Phillips and former chief of staff Joshua Powell — from ever serving in a leadership position for a New York charity in the future.

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Her investigation, which began in February 2019, found “a culture of self-dealing, mismanagement, and negligent oversight at the NRA that was illegal, oppressive, and fraudulent,” according to a statement by the attorney general’s office.

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Meanwhile, D.C. Attorney General Karl A. Racine announced Thursday that his office filed a separate lawsuit against the NRA Foundation, which is based in Washington. Racine accused the organization of being a puppet of the NRA, despite legal requirements that it independently pursue charitable purposes. Instead, Racine said his office found, the foundation repeatedly lent the NRA money to address its rising deficits.

James said at a news conference Thursday that she is seeking to dissolve the NRA because of the brazenness of the group’s violations of law.

“The corruption was so broad, and because they have basically destroyed all the assets of the NRA,” she said. “Enough was enough. . . . No one is above the law, not even the NRA.”

Her office cited as a precedent its previous action against the Trump Foundation, which led Trump to shut down the charity in 2018 amid allegations he used it for his personal benefit.

The irony here is delicious.

………

The lawsuit also claims LaPierre failed to report large sums of personal income to the IRS. James’s office said it found that the NRA chief funneled personal expenses through an outside public relations firm, allowing him to avoid reporting hundreds of thousands of dollars of personal income.

James said Thursday that she was referring those findings to the IRS. She also said that if her office uncovers criminal activity, it will be referred to the Manhattan District Attorney’s Office.

In response, the NRA said Thursday that it was filing its own federal lawsuit against James, alleging that the attorney general has violated the group’s free-speech rights and has been unfairly targeting the gun rights lobby since she began campaigning for the office.

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“Thoughts and prayers today to the NRA, which is losing money and political power so quickly that by the end of this case, there might not be anything left to dissolve,” said Shannon Watts, founder of Moms Demand Action.

(emphasis mine)

This irony is even more delicious.

Experts in tax law said the deep investigation into the NRA’s finances showed the potential for state officials to vigorously enforce nonprofit rules.

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The Washington Post and other news organizations subsequently revealed how the NRA directed funds to board members and how LaPierre racked up hundreds of thousands of dollars in charges at a Beverly Hills clothing boutique and on foreign travel.

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A central fraud embedded in NRA finances, James’s suit claims, was a secret agreement to pass questionable expenses through its Oklahoma-based advertising agency, Ackerman McQueen.

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A very large portion of those hidden expenses were for personal trips and expenses for LaPierre, the New York suit contends. In a deposition in a separate lawsuit last year, LaPierre acknowledged he did not report any of the NRA-paid expenses as personal income to the IRS and claimed they were business expenses.

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The partnership between the NRA and the public relations firm began to crack after James, then a candidate for New York attorney general, announced in summer 2018 that she planned to launch an investigation into the NRA if she won. LaPierre hired a new law firm, led by then-Ackerman McQueen chief executive Angus McQueen’s estranged son-in-law. That attorney, Bill Brewer, urged that the NRA to audit Ackerman McQueen’s bills in preparation for James’s probe.

I’m hoping that Wayne LaPierre ends up destitute and in prison.

Not Just Violent, Corrupt

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Accused murderer, and one time Minneapolis cop, Derek Chauvin has been charged with tax fraud, so in addition to being a brutal thug, he’s a rather more mundane criminal as well:

The fired Minneapolis police officer charged with killing George Floyd was charged along with his wife Wednesday with felony tax crimes dating back to 2014 that allege failure to claim more than $460,000 in income — at least $96,000 of that in his off-duty security work.

 Derek Chauvin and Kellie Chauvin, of Oakdale, were each charged by summons in Washington County District Court with nine felony counts of aiding and abetting false or fraudulent tax returns or failing to file returns.

 From 2014 to 2019, the Chauvins underreported $464,433 in joint income and owed a total of $21,853 in taxes, according to the charges. With interest and late filing and fraud penalties, they owe $37,868, the complaints said.

 Derek Chauvin, 46, remains jailed on second-degree murder and manslaughter charges in connection with the death of Floyd while in police custody on May 25. Three other ex-officers, Thomas Lane, J. Alexander Kueng and Tou Thao are charged with aiding and abetting Chauvin.

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The filing includes a litany of allegations. Among them, prosecutors say the Chauvins bought a new BMW X5 in January 2018 for $100,230 from a Minnetonka dealership and registered the SUV in Florida — they own a condo in Windermere, outside Orlando — and paid $4,664 in taxes in that state.

However, the vehicle was serviced 11 times in Minnetonka and never in Florida, investigators say they found. Kellie Chauvin told investigators they opted for Florida because it was less expensive. The taxes due on the SUV had it been registered in Minnesota were $5,053.

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The charges document various sources of income for the couple. The complaints said that between 2014 and 2019, Derek Chauvin made between $52,000 and $72,000 annually as a police officer. He also worked off-duty security nearly every weekend in that time at El Nuevo Rodeo dance club, Cub Foods, Midtown Global Market and EME Antro Bar on E. Lake Street.

During that span, Chauvin failed to pay taxes on nearly $96,000 he earned from El Nuevo Rodeo alone, investigators estimated.

Beginning in June 2019, he routinely worked off-duty at EME Antro Bar on weekends from 11 p.m. to 2:30 a.m. after his MPD shift and was paid $250 in cash each night, said investigators, who located no corresponding tax papers.

I would note that the entire “Cops being paid cash for security by a club” thing is probably pretty common in Minneapolis.

Tax authorities take note.

This is a Chicken Egg Thing

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It turns out that black home owners are assessed significantly higher property taxes than white home owners.

Obviously, racism figures prominently in this state of affairs, but the obvious question that is raised is whether this is an artifact of the communities in which they live, or does it effect people of color regardless of whether they live in largely segregated communities.

It turns out that it’s a bit of both:

We decompose this finding into two components. We show that slightly more than half of the assessment gap can be explained by between-neighborhood variation. Residential sorting by race in the U.S. means that the average black or Hispanic resident faces a different set of local attributes than a white resident does. Market prices appear to be substantially more sensitive to a wide range of observable neighborhood characteristics than assessed valuations. We use hedonic regressions to show that market prices and assessed values align well on home-level attributes, but diverge on tract-level characteristics. This mismatch, along with residential segregation patterns, generates 6–7 percentage points of the total tax burden inequality.

We show that the remaining 5–6 percentage points of inequality persists even within very small geography. We hypothesize that the main channel for this effect is racial differ- entials in property tax appeals. We use administrative data from Cook County, the second largest county in the US, to demonstrate that such racial differentials can exist: in Cook County, minority residents are 1% less likely to appeal; are 2% less likely to win an ap- peal; and conditional on success, receive a 2–3% smaller reduction. We then exploit racial changes in ownership around property transactions to test for racial differentials in assessment trajectories, and find patterns consistent with an appeals mechanism in the national data.

There are communities that target minorities in all sorts of nefarious ways, (Ferguson, MO) for revenue, AND individual black homeowners are simply charged more, and when they appeal property tax assessments they more likely to be denied.

Nah Gah Nah Happen

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When GM closed down its Lordstown, Ohio plant, it violated the incentive deal that it cut with the state, and so may have to repay $60,000,000.00 to state and local governments.

This won’t happen of course, because holding corporations to the terms of their contracts isn’t “Business Friendly,” so they will let General Motors skate:

The state of Ohio has put General Motors on notice that it may be forced to repay more than $60 million in public subsidies as a result of the automaker closing its massive assembly plant last year in Lordstown.

The state’s collection effort, initially outlined in a letter to GM in March, has not been previously reported, and the automaker itself has not disclosed the potential liability to shareholders in its corporate filings.

State officials say the Lordstown shuttering, which made national headlines and drew the ire of President Donald Trump, violated the terms of two state economic development agreements that GM signed more than a decade ago, according to documents obtained by The Business Journal and ProPublica through public records requests. In return for tens of millions of dollars in tax breaks, the company had pledged to maintain operations at the Lordstown site until at least 2027.

“If the state were to claw back $60 million, that would be one of the biggest clawback events in U.S. history,” said Greg LeRoy, executive director of Good Jobs First, a national nonprofit that advocates for accountability in economic development. “This is very significant, very interesting that it would come from a Rust Belt state from a very pro-business administration.”

Ohio is not going to claw back even a fraction of the money, because they want to maintain their reputation as a, “Very pro-business administration,” and in our race to the bottom political system, this will trump every other consideration.

I expect, at most, a couple of job developments centers, and perhaps the donation of some land for a city park.

GM will never be made to pay their debts.