Part One – We Must Learn About the Trump Family!

A bombshell report Tuesday pulled back the curtain on President Donald Trump’s mythos as a self-made billionaire, discovering a dubious trail of complex tax evasion by which Fred Trump funneled at least $413 million in today’s dollars to his son, “including instances of outright fraud,” the New York Times found. And that “small loan of a million dollars” that Trump claims his dad gave him to launch his business empire? It was closer to $61 million, the Times found, or at least $140 million in today’s dollars. That’s one of several jaw-dropping findings in the report, and now the New York Department of Taxation is “vigorously pursuing” a review of the Trumps’ activities. Trump sought to downplay the report’s findings through multiple channels, calling it a “very old, boring and often told” story on Twitter. White House spokeswoman Sarah Sanders described it as a matter settled “many decades ago.” Trump’s lawyer, Charles Harder, denied any fraud or evasion.

Here are a few of the biggest revelations the Times’ David Barstow, Susanne Craig and Russ Buettner found after reviewing 100,000-plus pages of records:

A millionaire by age 8: Trump’s money from dad came early and often

The funneling of money from Fred Trump to Donald Trump started early, the report found, with the younger Trump earning $200,000 a year in today’s dollars from his father’s business dealings by age 3 and becoming a millionaire by age 8. That was only the beginning: Fred Trump spent over 50 years funneling money to his son via 295 separate channels, the Times found, transferring today’s equivalent of $413 million to the current president.

Trump tried to change his father’s will, dodged half a billion in taxes

With his father aged and ailing, Trump tried to become sole executor of his estate in 1990. His father refused to sign a document from Trump to alter his will, pushing the family to employ tax strategies that experts described to the Times as “legally dubious” and apparently “fraudulent,” though the “maneuvers met with little resistance from the Internal Revenue Service,” reporters found. As a result, the Trump parents’ transfer of over $1 billion in wealth to their children came to $52.2 million in taxes — a fraction of the $550 million they would have paid under the tax rate on gifts and inherences.

The Trumps’ fraudulent company to funnel cash: ‘All County Building Supply’

The Trumps’ “most overt fraud” found by the Times came in the form of a company that existed “only on paper,” acting as a vehicle to move millions from Fred Trump’s empire. Called “All County Building Supply & Maintenance,” the company supposedly bought supplies for Fred Trump’s buildings. Instead, the Times found, the company siphoned millions via claims on already purchased items, which then went to All County’s owners: Donald Trump and others in his family.

The wealthy cheat, but the Trump family was off the charts!

Sure, the wealthy play games to avoid paying taxes, but the extent the Trump family did it went way beyond what was ethical or even legal.  This info can only get us thinking our prez probably belongs in the big house, not the White House!  These posts come from we-knew-trump-was-incredibly-corrupt-turns-out-he-may-also-be-an-epic-tax-cheat:  

“Only the little people pay taxes,” said a New York celebrity real estate figure in the 1980s. It was not Donald Trump but Leona Helmsley, who was eventually convicted of tax fraud and served time in prison. But they had a lot in common. Last night, the New York Times published a blockbuster story on President Trump’s finances based on documents never made public before, including tax returns from his father, Fred Trump. The revelations are staggering. They demonstrate that not only has Trump been lying for years about the enormous amount of money he was given by his father, but also Fred Trump, Donald Trump and Donald’s siblings were engaged in what amounted to a years-long conspiracy to commit tax fraud: He and his siblings set up a sham corporation to disguise millions of dollars in gifts from their parents, records and interviews show. Records indicate that Mr. Trump helped his father take improper tax deductions worth millions more. He also helped formulate a strategy to undervalue his parents’ real estate holdings by hundreds of millions of dollars on tax returns, sharply reducing the tax bill when those properties were transferred to him and his siblings. The Times’ story details a variety of schemes the Trumps used to avoid income taxes, gift taxes and, most critically, estate taxes. Together with his children — particularly Donald, his favored son — Fred Trump constructed a system that allowed him to pass a fortune of more than $1 billion on to his heirs while paying only a tiny fraction of the estate taxes that should have been paid. At the 55 percent rate at the time, Fred Trump’s estate should have owed at least $550 million but instead wound up paying only $52.2 million, or a mere 5 percent.

 

In addition, the newly revealed documents show that Trump’s claim that he built his company all on his own is a lie. “It has not been easy for me,” Trump said during the 2016 campaign. “My father gave me a small loan of a million dollars, I came into Manhattan, and I had to pay him back, I had to pay him back with interest.” While we’ve long known this claim was false, the Times shows that in fact, Fred Trump gave Donald vast sums over the years in gifts, “loans” that charged no interest and that he was never expected to pay back, and other vehicles that amounted to the equivalent of $413 million in today’s money. That is just one part of an extremely complex story, but it is important to note that the Times, in an article that was surely vetted carefully by their attorneys, describes what the Trumps did as “outright fraud.” In other words, it wasn’t enough for the Trumps to employ their tax lawyers to aggressively take advantage of all the loopholes that are available to the super rich (particularly those in real estate, which has its own set of intricate tax regulations). If the Times’ story is accurate, they decided to break the law as well — not here and there, not a time or two, but in a carefully planned scheme that had a complex web of components and took years to carry out. I spoke this morning to Daniel Shaviro, a professor at the New York University law school who is an expert in tax law, and asked him whether this kind of thing isn’t unusual among the super rich. If we were to investigate a bunch of billionaire families, would we find that they’re up to similar machinations? Shaviro said the answer is no and described the schemes in the Times article as “beyond the pale.” The estate tax in particular, he said, is rife with opportunities for planning to avoid tax liability. If you’re a billionaire, there are plenty of legal ways to minimize your tax bill. “Between the opportunities for tax planning and the risk of going to jail, why would you do this kind of thing if you’re Mark Zuckerberg or Jeff Bezos?” Shaviro said.

 

For some time, I have been arguing that Donald Trump is not merely someone who skirts the rules or skates close to the line, but in fact he may be the single most corrupt major business figure in the United States. Here is how I summarized it in April: He ran scams like Trump University to con struggling people out of their money. He lent his name to pyramid schemes. He bankrupted casinos and still somehow made millions while others were left holding the bag. He refused to pay vendors. He exploited foreign workers. He used illegal labor. He discriminated against African American renters. He violated Federal Trade Commission rules on stock purchases. He did business with the mob and with Eastern European kleptocrats. His properties became the go-to vehicle for Russian oligarchs and mobsters to launder their money. And that was before we even get to what Trump has done with his taxes. Which of course, we know only bits and pieces of, because unlike every president and presidential candidate in the past half-century, Trump has kept his tax returns secret. Just imagine for a moment if a story like this one — detailing years of tax fraud — came out about Hillary Clinton. The Republicans who mounted seven separate Congressional investigations of Benghazi would be making it rain subpoenas. What are they planning to do about evidence that Trump has committed tax fraud — and the very real possibility that he still is? Not a thing. But as Shaviro pointed out to me, for all the detailed information in the Times article, there are still places other kinds of fraud could have been committed. Much of the article concerns manipulation of gift taxes and estate taxes, but there is still more to learn about whether income taxes were evaded. The Times had Fred Trump’s tax returns in writing this story but not those of his children, so we don’t know whether Donald Trump paid all the taxes he owed as he was funneled all those millions from his father, often through shell companies. Something tells me there might be some interesting things yet to learn.

It turns out that I may have done Donald Trump an injustice. You see, I’ve always been skeptical of his claims to be a great dealmaker. But what we’ve just learned is that his negotiating prowess began early. Indeed, it was so amazing that he was already making $200,000 a year in today’s dollars at a very young age. Specifically, that’s what he was making when he was 3 years old. He was a millionaire by the age of 8. Of course, the money came from his father — who spent decades evading the taxes he was legally required to pay on money given to his children. The blockbuster New York Times report on the Trump family’s history of fraud is really about two distinct although linked kinds of fraudulence. On one side, the family engaged in tax fraud on a huge scale, using a variety of money-laundering techniques to avoid paying what it owed. On the other, the story Donald Trump tells about his life — his depiction of himself as a self-made businessman who made billions starting from humble roots — has always been a lie: Not only did he inherit his wealth, receiving the equivalent of more than $400 million from his father, but Fred Trump bailed his son out after deals went bad.

 

One implication of these revelations is that Trump supporters who imagine that they’ve found a straight-talking champion who will drain the swamp while using his business acumen to make America great again have been suckered, bigly. But the tale of the Trump money is part of a bigger story. Even among those unhappy at the extent to which we live in an era of soaring inequality and growing concentration of wealth at the top, there has been a tendency to believe that great wealth is, more often than not, earned more or less honestly. It’s only now that the amounts of sheer corruption and lawbreaking that underlie our march toward oligarchy have started to come into focus. Until recently, my guess is that most economists, even tax experts, would have agreed that tax avoidance by corporations and the wealthy — which is legal — was a big issue, but tax evasion — hiding money from the tax man — was a lesser one. It was obvious that some rich people were exploiting legal if morally dubious loopholes in the tax code, but the prevailing view was that simply defrauding the tax authorities and hence the public wasn’t that widespread in advanced countries. But this view always rested on shaky foundations. After all, tax evasion, almost by definition, doesn’t show up in official statistics, and the super-wealthy aren’t in the habit of mouthing off about what great tax cheats they are. To get a real picture of how much fraud is going on, you either have to do what The Times did — exhaustively investigate the finances of a particular family — or rely on lucky breaks that reveal what was previously hidden.

 

Two years ago, a huge lucky break came in the form of the Panama Papers, a trove of data leaked from a Panamanian law firm that specialized in helping people hide their wealth in offshore havens, and a smaller leak from HSBC. While the unsavory details revealed by these leaks made headlines right away, their true significance has only become clear with work done by Berkeley’s Gabriel Zucman and associates in cooperation with Scandinavian tax authorities. Matching information from the Panama Papers and other leaks with national tax data, these researchers found that outright tax evasion actually is a big deal at the top. The truly wealthy end up paying a much lower effective tax rate than the merely rich, not because of loopholes in tax law, but because they break the law. The wealthiest taxpayers, the researchers found, pay on average 25 percent less than they owe — and, of course, many individuals pay even less. This is a big number. If America’s wealthy evade taxes on the same scale (which they almost surely do), they’re probably costing the government around as much as the food stamp program does. And they’re also using tax evasion to entrench their privilege and pass it on to their heirs, which is the real Trump story. The obvious question is, what are our elected representatives doing about this epidemic of cheating? Well, Republicans in Congress have been on the case for years: They’ve been systematically defunding the Internal Revenue Service, crippling its ability to investigate tax fraud. We don’t just have government by tax cheats; we have government of tax cheats, for tax cheats.

It is too early to conclude that Donald Trump is the worst president ever. But it’s not too early to conclude that he is the worst person ever to be president. Two stories that broke within hours of each other on Tuesday make that clear. One is about how far he will go to achieve business success, the other about how far he will go to achieve political success. In neither case will he let morality, ethics or even the law itself stand in his way. First, the New York Times published a 14,000-word exposé that accused Trump of massive fraud against both the IRS and the American people. Trump’s business and political career has been built on his reputation as a self-made billionaire. It is the reason so many other developers paid him for the use of his name, why so many viewers tuned into his show “The Apprentice,” and why so many voters entrusted him with the presidency. It has long been known in general terms that Trump has vastly exaggerated his wealth and business acumen; in April, The Post ran an opinion article about how he inflated his net worth to land on the Forbes 400 list, and his six corporate bankruptcies testify that he is no business genius. But the Times provides hitherto unknown details that demolish whatever remains of his business reputation.

 

Trump has admitted to getting only a $1 million start-up loan from his father, Fred Trump — mere peanuts, he said. Turns out there were hundreds of millions of those peanuts. According to the Times, his father bankrolled him to the tune of more than $413 million and provided crucial loan guarantees to rescue him from his corporate bankruptcies. The Times article makes clear that there was only one business genius in the Trump family, and his name was Fred. The article also implicates the president in a plot to defraud the U.S. government of hundreds of millions of dollars of inheritance taxes: “The president’s parents, Fred and Mary Trump, transferred well over $1 billion in wealth to their children, which could have produced a tax bill of at least $550 million under the 55 percent tax rate then imposed on gifts and inheritances. The Trumps paid a total of $52.2 million, or about 5 percent, tax records show.” You can bet that the Times’s lawyers went over the article carefully before making such an explosive allegation against the president and felt confident enough to publish. Notwithstanding blustery denials from the White House, the weight of evidence suggests that there is good cause to think the president is a crook. This is, of course, far from the first credible allegation of illegality against the president. Just six weeks ago, Trump’s former personal attorney Michael Cohen pleaded guilty to eight felonies and implicated Trump in the commission of two of them — arranging payoffs in violation of federal campaign finance laws to a porn star and a Playboy model.

 

Beyond Trump’s reported violations of the law, there are his regular violations of the norms of human decency. How low can he go? That’s the question in the second story, which also broke yesterday. The man who has previously mocked a disabled reporter, Gold Star parents and POWs has now mocked a woman for saying she was the victim of a sexual assault. These Terrible Tuesday news items confirm what we already know about Trump: that he is a liar, a cheat and a bully without an ounce of dignity, empathy or decency. In place of his soul he has a black hole. The only way he can make himself feel better — to fill the emptiness inside — is to abuse those weaker than himself. He is a monster. Trump is far less effective a president than Bill Clinton, who banned assault weapons, reformed welfare and balanced the federal budget. Yet Republicans are willing to forgive him far more than Democrats ever forgave Clinton. For the GOP, loyalty to its odious leader trumps everything else, even the most basic dictates of humanity. Trump has forfeited our trust, and his Republican enablers have forfeited their right to rule.