Tax Returns & The Base

March 4, 2019

It truly is fascinating to watch the Hard Core Trump Base rise up on their haunches and respond to Trump tweets, pronouncements and positions.

I thought the Trump Base was loud but modest:  maybe 20% of American adults?  Wrong.

There seems to be a solid base of around 40% of American adults who idolize the words and actions of Donald Trump.  Though the number might occasionally rise or fall by a few points, Trump’s 40 percent approval rating seems to be mostly bulletproof.

Trump’s base is loud and determined.  One of his followers summed it up succinctly:  “People who voted for Trump will NEVER stop believing in his strength, intelligence and goodness. Trump 2020!”

Those of us who didn’t vote for Trump may never understand the deeply held values of the people who see America and the rest of the world so drastically different from us.

Do the hard-core Trump folks really believe that Trump is an economic and social policy expert who alone can make America great?

Or are they just lost souls clinging to the past in a desperate hope that the inevitability of change and uncertainty can be conquered through anger, bad manners and avoidance?

Trump defied an established custom developed over the last 40 years by refusing to release his tax returns during the 2016 presidential campaign, although he did say – on multiple occasions during the campaign – that his tax returns had been under a routine Internal Revenue Service audit since 2009 and that he could not release them until the audit was finished.  (N.B.  The IRS has repeatedly stated that there is no prohibition or restriction on releasing tax returns while they are under audit.)

After a while, Trump promised that he would release his tax returns once the audit was completed.

I’m no expert on IRS audits, having only been audited once myself.  My audit was completed within 90 days.

Generally, the statute of limitations for the IRS to close out tax audits on a taxpayer expires three (3) years from the due date of the return or the date on which it was filed, whichever is later.

Public evidence shows that in most cases, an IRS tax audit lasts less than one year.  In a few rare cases where substantial tax fraud or misreporting (generally, unreported income) is involved, the statute of limitations can be extended to six years.

That said – and assuming worst case situations —  the audit on Trump’s 2009 tax return would have been completed not later than October 15, 2016; 2010 by October 15, 2017; 2011 by October 15, 2018

Various public polls reflect the sentiment of a majority of Americans (70+ %) that Trump should release his tax returns.  Yes, even some of the Trump acolytes agree that releasing the tax returns is the right thing to do!

It’s the job of congressional committees to conduct oversight of the executive branch, and the Ways and Means committee is empowered to obtain anyone’s tax returns – even a sitting President – under a provision of the tax code which has existed since the 1920s.

Let’s get those Trump tax returns released ASAP, and eliminate at least one of the broken campaign promises.  As has been said, ‘sunlight is the best of disinfectants’.

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I was looking forward to hearing the testimony of Michael Cohen before the House Oversight Committee, particularly interested to learn more about some of the ‘behind the scenes’ actions and activities which took place during Cohen’s ten year stint as a lawyer for Donald Trump, and as an executive of The Trump Organization.

It is clear that Michael Cohen is guilty of multiple frauds and felonies.

Cohen pleaded guilty to eight charges in August 2018, including several counts of tax fraud and campaign finance violations. He also pleaded guilty in November 2018 to a charge of lying to Congress from Special Counsel Mueller’s office.

Said Cohen, “I take full responsibility for each act that I pled guilty to:  The personal ones to me and those involving the President of the United States of America.”

In December 2018, Cohen was sentenced to a term in federal prison for the eight criminal counts he pleaded guilty to in August. The judge gave him an additional two months for the special counsel charge.

Despite pending imprisonment for his acknowledged bad behavior, Cohen agreed to provide public testimony to the House Oversight Committee on February 27, 2019.

It was my expectation that – during this public hearing – committee members would politely hear testimony from Mr. Cohen, followed by a question and answer session which might provide us with a broader understanding of the issues.

Upon completion of the public hearing, I anticipated that members of the committee would meet sometime in the near future to study, discuss and debate the findings of the hearing.

At a future date, I expected that I would learn from traditional media sources about next steps:  Further investigation?  Criminal referral(s)?  Case closed?

I appreciate and covet freedom of speech, and I am cognizant of special protections afforded to Members of Congress to ensure they are not censured for statements made in their official capacity.

That said, today I witnessed two members of the House Oversight Committee go off course early in the proceedings, and they continued to cloud and obfuscate the intended purpose of the hearing almost to the very end.

The behavior and demeanor of Rep. Jim Jordan (R, OH) and Rep. Mark Meadows (R, NC) on 2/27/19 (as displayed on national television) was unprofessional; inappropriate; and absolutely unacceptable coming from elected Members of Congress.

I am a citizen and registered voter in the United States.

As such, I am entitled to all of the protections afforded by the Constitution of the United States, including the expectation that elected Members of the House will (1) behave at all times in a manner that shall reflect creditably on the House; (2) adhere to the spirit and the letter of the Rules of the House and to the rules of duly constituted committees thereof; and (3) not receive or accept compensation, favors or other benefits from any source which would occur by virtue of influence improperly exerted from their elected position in Congress.

It is my belief that both Rep. Jordan and Rep. Meadows repeatedly violated their basic duties of comportment and professionalism during their activities today as members of the House Oversight Committee.

I do hope the House Ethics Committee will hold each of these individuals fully accountable for their unprofessional, inappropriate, and unacceptable public behavior, and I encourage others to demand accountability from Congress.

Border Security

February 15, 2019

I’ve been looking into the border situation.  My goal is to reach an understanding of what’s really going on, because the political rhetoric has my head spinning.  Here is what I found:

Depending on which source(s) you are comfortable with, you may agree that the 1,900+-mile border between the United States and Mexico is the most heavily crossed – both legally and illegally – international boundary in the world.

Today – mid-February 2019 — barriers which block people and vehicles along 650 miles of the U.S.-Mexico border are in place and operational.  These barriers include stretches of steel and barbed wire, fortified with infrared cameras, imposing watchtowers, and blinding floodlights, and it is patrolled by thousands of guards. These 650 miles represent a four-fold increase over 2005, when there were 120 miles.

About 1,300 miles of the U.S.-Mexico border lacks fencing because the Rio Grande forms a natural border along most of those miles. Remaining sections are in rugged, inhospitable terrain, where building a barrier would not only be impractical, but fail the most rudimentary cost-benefit analysis.

The legislation President Donald Trump needs to build his promised wall along the U.S. southern border with Mexico was passed in 2006 and remains on the books.

The Secure Fence Act was introduced in Sept. 2006 by Rep Peter King (R-NY) and was quickly passed by Congress on a bi-partisan basis.  The House passed the Fence Act 283 to 138 on September 14, 2006; the Senate passed the Fence Act 80 to 19 on September 29, 2006; and the Act was signed into law by Pres. George W. Bush on October 26, 2006.

The goals of The Secure Fence Act of 2006 envisioned helping to secure America’s border with Mexico to decrease illegal entry, drug trafficking, and security threats by building about 700 miles of physical barriers along the Mexico-United States border. Additionally, the law authorized more vehicle barriers, checkpoints, and lighting as well as authorizing the Department of Homeland Security to increase the use of advanced technology such as cameras, satellites, and unmanned aerial vehicles to reinforce infrastructure at the border.

The initial concept imagined in the King-sponsored law anticipated a continuous barrier of double-layered fencing with a sufficient gap that a vehicle could be driven between the layers.

Once it became clear that the geographic and topographic diversity along the border could not accommodate a simple double-layered fence, Senator Kay Bailey Hutchison (R, TX) worked with the Department of Homeland Security to propose an amendment to give DHS discretion to decide what type of fence was appropriate in different areas.

The law was subsequently amended to read,

“Nothing in this paragraph shall require the Secretary of Homeland Security to install fencing, physical barriers, roads, lighting, cameras, and sensors in a particular location along an international border of the United States, if the Secretary determines that the use or placement of such resources is not the most appropriate means to achieve and maintain operational control over the international border at such location.”

By mid-2011, the Department of Homeland Security reported that fencing for 649 miles of border had been completed.  As described in the 2007 Hutchinson amendment, much of the total fence reported by DHS consists of vehicle barriers and single-layer pedestrian fence, deemed most appropriate at those locations by DHS.

Purists looked back to the original King-sponsored bill and decried the type of fencing DHS was counting as “completed”.  They said that vehicle barriers and single-layer pedestrian fences can’t meet the amended letter of the law.

Yet, according to Customs and Border Patrol reports at that time,  the border barriers they included in their report include: ‘Post on Rail’ steel set in concrete;  Steel Picket-style fence set in concrete;  Vehicle Bollards similar to those found around federal buildings; ‘Normandy-style’ steel beam vehicle barriers; and concrete ‘Jersey Walls’ reinforced with steel mesh.

I don’t know much about barriers, but these sound pretty substantial and imposing to me.

Many people will take exception to something President Obama said in 2011 when addressing the issue of border security.  I include this here because it is emblematic of the political discourse we seem to have devolved toward in the past decade or two:

“We have gone above and beyond what was requested by the Republicans who said they supported broader reform as long as we got serious about enforcement.  All the stuff they asked for, we’ve done. But even though we’ve answered these concerns, I’ve got to say I suspect there are still going to be some who are trying to move the goal posts on us one more time.”

“They’ll want a higher fence,” Obama said. “Maybe they’ll need a moat. Maybe they want alligators in the moat. They’ll never be satisfied. And I understand that. That’s politics.”

Political rhetoric is to be expected, and most of us prefer it to be witty, sharp and to the point.

There really is no place in a civilized society for the sort of caustic and unforgiving political hate speech and outright lies we all too frequently seem to encounter in 2019.

Monday, January 21, 2019The International Monetary Fund pared back its world economic growth forecasts for 2019 and 2020 due to sustained economic weakness in Europe and some emerging markets. They also said looming trade tensions and the longer-term ramifications of the U.S. government shutdown could further destabilize a slowing global economy.

“After two years of solid expansion, the world economy is growing more slowly than expected and risks are rising,” IMF Managing Director Christine Lagarde said.

In addition to other forces, IMF economists pointed to: (a) challenges to German auto manufacturers due to new fuel emission standards; (b) uncertainty in Italy where a newly elected coalition government has clashed with EU leadership over a budget proposal which would dangerously increase the Italian sovereign deficit, combined with limp domestic demand; and (c) the uncertainty of fallout from a less-than-smooth exit from the European Union by the U.K. a.k.a. ‘a no-deal Brexit’.

Fears of a global slowdown began to jinx financial markets in early November 2018 as investors began to worry about increasingly weak signs in China.

The ripple effect of Sino-U.S. trade frictions over the past year apparently has exacerbated the slowing of China’s official growth rate to its weakest level since 1990, attributed to a combination of diminishing domestic demand and damaging U.S. tariffs.

Each of these issues is important, and they generally share a common theme:  bad policy decisions made by incompetent and/or uninformed people, some of whom are voters; some private-sector executives; and some unconstrained elected officials.

On Day 30 of the 2018-19 U.S Shutdown:  It is becoming increasingly evident that this partial federal government shutdown is taking an increasingly negative short-term toll on consumer and business confidence, and by extension, the overall US economy.  The White House’s Council of Economic Advisors recently updated their estimate that the shutdown will reduce current economic growth by 0.13% for every week that it lasts.  Doesn’t sound like much, you say?

We can look back to the “Ted Cruz Green Eggs & Ham” shutdown of 2013 – a mere 16 days – to see estimates of negative economic impact:

  • $24 billion in lost domestic economic output;
  • $2.1 billion in non-productive government costs (primarily the cost of paying furloughed workers for hours they didn’t actually work);
  • $2.4 billion in lost travel spending (based on a combination of estimated reductions in business travel for federal contractors and federal employees, plus cancellations of discretionary travel by tourists);
  • $7.2 Million in lost revenue at National Parks (based on an average collection of $450,000 per day);
  • Most alarming? While we can estimate current economic effects, there really is no valid means to estimate long-term economic – and societal – effects of an extended shutdown.

The message?  Political decisions made by unqualified and/or inexperienced individuals can and do have long term negative consequences. A comprehensive system of checks and balances is a critical ingredient in the long-term viability of any institution. In the public sector, a key ingredient seems to be the involved and active participation by a well-educated and well-informed body of citizens who are able and willing to vote.

What is there about the simple concept of separating day-to-day operations from long-term planning that our elected federal officials seem unwilling or unable to comprehend?

Our current federal budgetary process was set into law by the 1974 Budget Control Act, based on a federal fiscal year which runs from October 1st to September 30th.  Thus our current Federal Fiscal Year — known as FY 2019 — runs from October 1, 2018 until September 30, 2019.

In February 2018, President Trump – through the Office of Management and Budget – submitted a proposed budget to Congress for FY 2019. The operating budget for FY 2019 was discussed, deliberated and adopted, and it needs to be funded.

There just isn’t any room in the process for the President – or any other elected official — to demand modifications to the current FY budget prior to approving ongoing funding for current government operations.

While it is unfortunately true that Congress doesn’t always follow the schedule as proscribed in the 1974 Budget Control Act, the proper time for the President to present new spending initiatives to Congress is during the annual federal budget deliberations process which typically begins in January when the OMB presents a proposed FY budget to the President.

President Trump’s current demands are only legitimately appropriate as a component of a proposed FY 2020 federal budget proposal.

PLEASE:  Let’s get the federal government back into its day-to-day operation by providing necessary current funding, and bring the debate over additional border funding where it belongs – in the discussions and deliberation toward a FY 2020 federal budget.

Where’s Mitch McConnell?

January 17, 2019

Where’s Mitch is a question many people are asking.

There are 800,000 federal workers and their families who are going without pay right now – including thousands of Kentuckians.

Here in Florida, we have about 5,000 Coast Guard members doing their jobs to protect our 1,350 miles of Gulf and Atlantic coastline, and they are not currently being paid.

The new Democratic House, on its first day in office, passed two bills funding and reopening the government.

McConnell has refused to allow a vote on any of those bills in the Senate. He’s even twice blocked a bill reopening the government from coming to the floor that he himself voted for back in December.

Despite the fact that Majority Leader McConnell has the ability to end this shutdown right now, Mitch is seemingly nowhere to be found.

I’m angry that this one man who has the power to stop this absurd drama has refused to do his job.

If you are nearly as angry as I am, perhaps you will consider donating $15 – or what you can afford – to the Ditch Mitch movement.  Let’s shine a bright light on McConnell’s irresponsible behavior.

http://ditchmit.ch/

 

Remember Benghazi?

January 16, 2019

I refer to a deplorable attack by members of the Islamic militant group Ansar al-Sharia on the U.S. embassy in Benghazi, Libya during which four U.S. citizens were killed. That atrocity occurred in September 2012, just over 6 years ago.

Today (January 16, 2019) — just a month after President Donald Trump declared that the Islamic State had been defeated and that he was pulling U.S. troops out of Syria — a suicide bombing in northern Syria attributed to the Islamic State killed at least 16 people, including two U.S. service members and two American civilians.

About four hours after this vicious attack by Islamic Militants – and after having been briefed on the bombing — Vice President Mike Pence told the world, “Thanks to the leadership of this commander in chief and the courage and sacrifice of our armed forces, we are now actually able to begin to hand off the fight against ISIS in Syria to our coalition partners. And we are bringing our troops home. The caliphate has crumbled, and ISIS has been defeated.”

Cold? Callous? Confused? Disconnected?

Even some senior Republican elected officials have pushed back on this mess, warning President Trump that his statements have served to encourage and inspire ‘the enemy we’re fighting.’

Back to Benghazi: At two years and four months, Trey Gowdy’s Benghazi investigation was longer than previous Congressional probes into 9/11; Watergate; the JFK assassination; and Pearl Harbor. Add to that time wasted: the $22 Million of public money spent in a clearly partisan attempt to “get” former Secretary Clinton, it must have been deeply disappointing to those who backed Gowdy when they read the final report which found no evidence of wrongdoing by Hillary Clinton.

Lessons Learned: Despite the temptation, let us be sure to tell our elected officials in Washington:  Please don’t waste any scarce government resources investigating the direct impact of President Trump’s actions on the January 16, 2019 Islamic State fatal attack on innocent people in northern Syria.

Trump does what he is told, and there is no reason to investigate what we already know.

The Winning December Tale

December 21, 2018

Not to be outdone by venerable sources such as Franz Kafka, Edgar Allan Poe and Rod Serling (The Twilight Zone), President Donald Trump and his loyal sycophants — Sarah Huckabee Sanders and Kellyanne Conway — have created a number of fabulous and fantastic episodes for December 2018.  We have endeavored to select the very best for your enjoyment tonight:

The Tale of A Shutdown

December 11, 2018:  Nationally televised from The Oval Office:

“I am proud to shut down the government…I will take the mantle. I will be the one to shut it down. I’m not gonna blame you for it.”

  • Donald J. Trump (speaking to Sen. Chuck Schumer)

December 17, 2018:  Bloomberg News:

Among those who have opposed Trump’s wall proposal is Texas Republican Rep. Will Hurd, whose district is along the U.S.-Mexico border.  Among other observations, Hurd said that the response time from the border patrol on issues of illegal immigration is hours to days, making a border wall a waste of money because a wall is no obstacle if the response time is that slow.

  • Will Hurd, (R) TX

December 19, 2018:  Nationally broadcast on CBS News:

Senate Majority Leader Mitch McConnell announced on the Senate floor Wednesday that he’ll introduce a short-term spending bill to fund the government into early February, and one of the president’s top aides suggested earlier in the day Mr. Trump may be amenable to that.

“We need the government to remain open for the American people,” McConnell said on the Senate floor.

Senate Majority Leader Chuck Schumer and presumptive incoming Speaker of the House Nancy Pelosi announced their support for the legislation as well, paving a path to avert a shutdown.

Pelosi said in a statement, “Democratic and Republican appropriators have been ready to pass these bills in a bipartisan way, and we are grateful for their leadership to meet the needs of the American people. This is a missed opportunity to pass full-year funding bills now. However, Democrats will be ready to fully, responsibly fund our government in January, and we will support this continuing resolution.”

  • McConnell, Schumer, Pelosi

December 20, 2018:  Nationally televised on “The Ingraham Angle” (Fox News):

“I think that not funding the wall is going to go down as one of the worst, worst things to have happened to this administration. Forget Mueller. The wall, the wall, the wall. Has to be built. And it’s a scandal that it hasn’t been built.”

  • Laura Ingraham

December 21, 2018:  Broadcast via Twitter from @realDonaldTrump:

“The Democrats, whose votes we need in the Senate, will probably vote against Border Security and the Wall even though they know it is DESPERATELY NEEDED. If the Dems vote no, there will be a shutdown that will last for a very long time. People don’t want Open Borders and Crime!”

  • Donald J. Trump

December 21, 2018: 

It seems clear that Donald J. Trump and his loyal sycophants have created another alternative reality in their attempt to destroy the foundation of American democracy, and Vladimir Putin is very, very happy!

Since Donald J. Trump announced his candidacy for president in June 2015, there have been many commentaries on his financial history — particularly because he has refused to release his tax returns.

In 2016, David Barstow, Susanne Craig and Russ Buettner of The New York Times obtained Trump’s 1995 tax returns, and for their article published on the front page of The New York Times on October 3, 2018, they worked together for over a year to investigate the wealth that the president inherited from his father.

The narrative in the NY Times investigative piece is compelling.

Like most rules and regulations, U.S. tax law assumes that people will voluntarily comply in the interest of equity and fairness across the board.  If the laws are not fair, they should be amended, not circumvented.

Having worked in the real estate and financial services industry for many years, I am familiar with many of the strategies exposed in the article, particularly the rather arbitrary and capricious use of independent appraisals to determine market value at a point in time.

Where many — if not most — wealthy families and individuals pay their fair share of taxes (perhaps grudgingly), the Trump family has notoriously and conspicuously fought against taxing authorities, continually challenging assessments and levies as a part of their overall family business plan.

Note a recent kerfuffle in Westchester County, NY where a Trump National Golf Club is located.

With a 65,000 square foot club house, private gourmet restaurant, swimming pool, tennis pavilion and courts, the 18-hole, 7,261 yard Jim Fazio designed course is situated on 140+ acres of prime real estate in the Town of Ossining, NY.

This ultra-exclusive private club demands a hefty 5-figure initiation fee from new members, with minimum annual dues of $19,400.

In his 2017 Executive Branch Personal Financial Disclosure Report (filed 6/14/2017), Donald Trump revealed the value of his ownership interest in Trump National Golf Club – Westchester at ‘over $50,000,000.’ with annual personal income attributable to the Club of $9,771,428.

Yet, in 2015, the Trump Organization sued the town of Ossining to lower its assessment from the 2014 value of $13.5 Million to $1.4 Million in order to reduce property and school taxes.

After the feud with Ossining became public, Trump’s lawyers raised the dollar value of the golf course, but it was still nowhere near the official 2015 assessment of $14.3 million and 2016 assessed value of $15.1 million.

The moves are consistent with repeated efforts by the Trump Organization to challenge property valuations in an effort to win massive local property tax reductions, not to mention the potentially illicit impacts on federal, state and local income tax obligations which in many cases are directly linked to these local assessments (valuations).

Over the past several years, Trump has lauded himself as “one of the most successful businessmen in the world,” who paid “no more tax than legally required.”

“I have brilliantly used [the U.S. tax] laws,” Trump said at a campaign event in October 2016. “I was able to use the tax laws of this country, and my business acumen, to dig out of the real estate mess — you would call it a depression — when few others were able to do what I did.”

It was a reported $916 Million net operating loss in 1995 which gave Trump the ability to avoid paying taxes on more than $50 Million in annual taxable income over the following 18 years.

Make America Great Again? Only if others are willing to cough up the tax revenues needed to pay the freight.

I have reviewed some of Judge Brett Kavanaugh’s judicial decisions; I’ve read some of his legal opinions; and I listened to some of the testimony he gave to the Senate Judiciary Committee in early September.

My limited research led me to conclude that Judge Kavanaugh supports highly subjective views on the 2nd Amendment; on women’s reproductive rights; and on the executive power of the presidency.

Judge Kavanaugh’s testimony to the Senate Judiciary Committee shed new light on his published positions, as well on his devotion to President Trump and Trump’s political agenda.

Judge Kavanaugh is quite personable and well-spoken, yet I believe his positions are not in keeping with the mores of American society.  His responses to many of the difficult but seemingly fair questions from members of the Senate Judiciary Committee were evasive and ambiguous.

Kavanaugh was nominated by President Donald Trump in July 2018, drawn from a carefully vetted list of conservative jurists compiled by the Federalist Society, following Trump’s campaign promise that his judicial nominees would all be picked by the Federalist Society, an ultra-conservative legal organization.

Our nation is currently at a crossroads, possibly at or near a similar state which preceded the Civil War.

It is not slavery that divides us today.  What divides us today is petty political divisiveness, exacerbated by special interest groups which operate behind the curtain, seeking to gain economic and political power over their opponents.

Our next Supreme Court Justice ought not to be an ultra-liberal or ultra-conservative individual.  People who lean heavily left or right might attempt to institute abrupt changes to our legal order.

Abrupt change is both dangerous and disruptive, and has the potential to create political paralysis, or worse.

We recently began to hear talk of the ‘Deep State’ – an invisible but powerful alliance of career bureaucrats; officials who sit in powerful positions; and who serve through multiple presidential administrations.

Candidates for elected positions in the U.S. seem to often campaign on the abrupt and transformational changes they will institute on “Day One.”

Conspiracy theorists whisper innuendo accusing career public servants of creating obstacles to enact abrupt change, turning career public servants into natural enemies of those officials who are elected on their “Day One” promises.

Conspiracy theorists whisper innuendo accusing these career public servants of creating obstacles to enact abrupt change.

Career public servants often advocate for research and planning; for using historic data and experience to predict future outcomes; for upgrades to systems and infrastructure to improve data security and data integrity.

In the end, Presidents come and go, every 4 years, or so.  Supreme Court justices serve a lifetime appointment.

Supreme Court justices should be politically neutral, above the fray of partisan politics.  The future of our nation is at stake.

Change is both necessary and inevitable.  Abrupt and unplanned change could result in a good outcome; history tells us that it is much more likely to result in catastrophic result.