Trump Family & Potential Tax Fraud
October 3, 2018
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.
Separate and Unequal
April 27, 2014
Westchester County in New York State seems to attract a great deal of attention in the media.
Not long ago, we learned from a posting on Zillow that property owners in Westchester County pay more in property taxes than the typical resident of any other major American county. The average property tax bill for a single family home in Westchester County comes to $14,829 a year (vs. the U.S. median of about $2,800).
There are a number of reasons why property taxes in Westchester County NY are the highest in the nation, but the primary reason is property taxes levied to support public schools.
In a county with a population of just under a million residents, Westchester County taxpayers are supporting some 47 completely autonomous public school districts!
Very recently, Westchester County Executive Rob Astorino made headlines because he continues to battle the US Department of Housing and Urban Development (HUD) over compliance with a consent decree approved in 2009 which requires Westchester County to take an active and affirmative role in desegregating local villages and towns in the county which have miniscule populations of African American and Hispanic residents.
Some commentators have applauded Astorino for defying the federal government under the guise that, “(Astorino) is doing his job by protecting the neighborhoods of those who worked very hard to live where they live!”
I’m fine with the notion that people ought to be able to live where they want to live.
However, because New York State allows and encourages public school districts to form around — and to exclusively serve residents of — villages, towns and cities, the impact of this ‘home rule’ approach to public education has created de facto segregation which has produced more egregious and dangerous consequences than the issues debated in the Brown vs. Board of Education case which was decided in 1954 – 60 years ago!
We can clearly witness that “Separate and Unequal” has become the standard in Westchester County.
It becomes very clear from reviewing NYS Education Department statistics that economic and racial segregation in housing translates directly to school inequality and results in disparate student outcomes.
The Village of Scarsdale is one of the communities identified in the Housing Agreement (consent decree) as racially segregated, and thus a priority area for new units of fair and affordable housing.
A report released in late April from US News and World Report reveals that Scarsdale High School was ranked among the very best high schools in Westchester County; in New York State; and across our nation.
In Scarsdale, no students at the High School receive subsidized meals, and just 9% of students are Black or Hispanic. About 8% of Scarsdale students have been classified with a disability, and 68% of those students spend 80% or more of their school time in regular classroom settings. Most recent total per-pupil spending across the Scarsdale schools was $27,219, with $17,450 focused on general education students.
Meanwhile, just 5 miles south of Scarsdale High School is Mount Vernon High School, where 70% of students receive subsidized meals, and where 95% of students are Black or Hispanic.
About 16% of Mount Vernon Students have been classified with a disability, and just 48% of those students spend 80% or more of their school time in regular classroom settings.
Most recent total per-pupil spending across the Mount Vernon public schools was $23,560, with just $11,641 centered on general education students.
The real test may be in graduation rates. For the class of 2012, 95% of Scarsdale seniors graduated with Regents diplomas; at Mount Vernon High School, just 52% of seniors graduated with a Regents diploma.
The attitudes and actions of public officials should set a positive example for all people, affirming that our elected leadership is fair, honest and forward thinking.
There really is no place in our current society for personal private agendas – working against the general public good – on the part of our elected officials.
Municipal and school district consolidation seems to be the only rational resolution — why is this solution so difficult to discuss and resolve?
In White Plains, the Great OZ has Spoken!
April 24, 2014
I learned today from an article published in The Journal News that Westchester County has again refused to come into compliance with federal anti-discrimination law and sign a statement to affirmatively further fair housing throughout the county.
The official statement looks something like this: “… (Westchester) county is not going to turn over control of the local zoning of its six cities, 19 towns and 20 villages to bureaucrats in Washington for $5 million in grants.”
This is pure incendiary nonsense, really not different than shouting Fire in a crowded movie theater.
Recalcitrance on the part of the executive branch of Westchester County government will cost villages and towns $5.2 million in community development grants, which had been awarded in 2012 but have been withheld along with all the other rounds of funding since 2011. More than $7 million in grants from 2011 were lost in a similar fashion in 2013.
We elect our public sector leaders to make balanced decisions which are in the best interests of all current and future residents. There really is no place in the American governance process for elected officials to pursue their own personal agenda(s) at the expense of the public good.
Through his continued defiance of the terms of a 2009 agreement between Westchester County and HUD, Mr. Astorino has proven beyond a shadow of doubt that he is unable and/or unwilling to pursue the actions which are in the best long-term interests of the people of Westchester County.
“Pay no attention to that man behind the curtain. The Great OZ Has Spoken!”
It’s time, Mr. Astorino. Time for you to resign from your current elected position to pursue your private agenda on your own time and on your own dime.
New York State: Land of Highest Property Taxes
April 10, 2014
I live in Westchester County, NY – the place they say has the highest property tax burden in the U.S.
Our Governor – Andrew Cuomo – also comes from Westchester County — and he has made it his mission to support effective ways to reduce and/or eliminate the government waste which necessitates the high property taxes we pay.
The incredible inefficiency of having 400+ independent government entities operating within Westchester County certainly is a primary culprit for the dubious honor of being named the highest taxed county in the U.S.
The largest portion of property taxes paid is attributable to funding public schools — 41 regular school districts in a county with less than 1 Million in total population.
Each of these districts is ‘self contained’ in that they have their own administration, buildings, and all of the fixed cost infrastructure which gets paid for whether there 275 students served (Pocantico Hills at an average per-pupil cost of $42,000) or 25,000 students (Yonkers at an average per-pupil cost of $19,600).
Contrast this to Montgomery County, Maryland — about the same physical size as Westchester, and with a very diverse population of just under 1 Million, demographically quite similar.
Montgomery County has just one school district which educates all of the 150,000 public school students in the county at an average per-pupil cost of $15,421.
Just about every year, Maryland Public Schools are ranked at the top in the nation. http://www.washingtonpost.com/blogs/maryland-schools-insider/post/maryland-schools-ranked-number-one–again/2012/01/11/gIQA7NEqrP_blog.html
While Montgomery County — perhaps due to its ethnic, racial and economic diversity — is not number one in the state, it seems to consistently score in the top 10, and compares very favorably against the composite Westchester score.
It’s really time for the taxpayers in NYS to put aside the political rhetoric and to find a way to reduce overall costs, whether through actual mergers and consolidations, or through consolidation of services which are not directly related to the classroom.
We can do better, and we must!
Really Bad Property Assessment Policy
March 1, 2014
The Walrus recently learned that former Town of Somers Supervisor Mary Beth Murphy was appointed as executive director of the Westchester County Tax Commission by County Executive Rob Astorino, a fellow Republican. The job, which enjoys a six-year term, pays $132,155 a year.
Ms. Murphy told a local media outlet that she was “…very grateful for the opportunity to serve the people of Westchester, I was supervisor for 16 years, and I certainly dealt with tax issues during my tenure there. It brought exposure to multiple levels of government. “
The Westchester County Tax Commission ostensibly serves as the repository for the assessment rolls from the county’s multiple taxing jurisdictions; is tasked to provide advisory services to municipalities concerning assessments and assessment procedures; and produces an annual report to the county Board of Legislators.
Off hand, I’m thinking this person is absolutely unqualified and not fit to serve in this position. But, that is the nature of a system where officials are often elected to office based on a ‘beauty contest’ enhanced by a campaign war chest of dubious origin; then those ‘elected officials’ are free to appoint political hacks into positions which can have dramatic impact on society.
This pretty much says it all, another quote attributed to Ms. Murphy from her tenure as Supervisor in the Town of Somers: “We have a good way of reporting our tax bills, and did not see a desire for it by the constituency. The town has a very good reputation for its tax rate.”
According to what source? And on what standing?
The old “Home Rule” defense rears it’s head again. And, it was a great idea in pre-revolutionary war days. Sometime after the Civil War, Home Rule became obsolete, yet we still follow that logic in 21st century New York State?
Wondering why Westchester County has won the prize to become the highest property tax location in the U.S.? It’s entirely due to Home Rule and the incredible waste and duplication of services which result.
Most egregious? The folks in the wealthy white suburbs who are willing to pay through the nose to fund their quasi-private public schools, town and village police, etc. but who balk at the idea of providing any support at all to County taxes which in turn support social safety net services for their less fortunate neighbors.
More on Dysfunction in NYS
February 5, 2014
An article about health insurance policies purchased through the New York State health exchange (an outcome of the Affordable Care Act) appeared on the front page of our regional newspaper (The Journal News) on Sunday, 2/2 – http://www.lohud.com/article/20140201/NEWS/302010057/Westchester-Medical-Center-won-t-accept-ACA-patients
The reporter had canvassed all of the acute-care hospitals in the Lower Hudson Valley and found that all would accept coverage offered through the exchange except one: Westchester Medical Center.
The reporter explained that the CEO of Westchester Medical Center had said the insurance exchange reimbursements were too low to cover the costs of the services it offers as a teaching hospital.
“We want to participate,” CEO Michael Israel said. “We have not been offered rates that we can live with.”
Westchester Medical Center (WMC) was originally a subsidiary of Westchester County Government, and it was reorganized in 1997 as a “Public Benefit Corporation”, one of about 1,000 of these ‘shadow government’ entities which exist across the state. (See a report issued by the NYS Comptroller in December 2013 — http://www.osc.state.ny.us/reports/pubauth/PA_employees_by_the_numbers_12_2013.pdf
Since this conversion, Westchester Medical Center (WMC) has been no stranger to controversy.
WMC is very similar to Erie County Medical Center (ECMC): Both are teaching hospitals; ECMC has 569 certified beds; WMC has 652 certified beds; both were formerly subsidiaries of County Government; and each has converted to a Public Benefit Corporation.
One marked difference between ECMC and WMC shows up in the category of personnel and payroll.
In the year ending 12/31/2012, ECMC reported 3,436 employees and a gross payroll of $154 Million. WMC reported 3,928 employees and a gross payroll of $280 Million.
ECMC paid a bonus to 61 employees, totaling $245,381. The highest individual bonus reported was $15,000. That seems reasonable and fair, assuming there was some criteria employed to gauge the performance above and beyond the salary paid. The CEO at ECMC total compensation was reported at $698,000.
WMC paid a bonus to just 13 employees, totaling $940,338. The CEO at WMC total compensation was reported at $1,375,000 including a bonus of $339,000. Even the next in command at WMC was paid more than the CEO of ECMC: total compensation $800,000, including a bonus of $150,000.
As CEO Michael Israel points out in a subsequent article published in The Journal News (2/4/2014) http://www.lohud.com/article/20140204/NEWS02/302040083/Rejecting-ACA-health-policies-Westchester-Medical-Center-under-state-scrutiny?odyssey=mod|newswell|text|News|s
““I don’t think it’s wrong or objectionable to want to be reimbursed an amount of money to cover the costs of treating our patients.”
Well said, Mr. Israel.
The remaining question is: What sort of accounting shenanigans took place to allocate all (or a portion of) Israel’s compensation – and the other 12 who received extraordinary bonuses – to the cost of treating patients?
The Ultimate in Irony?
February 3, 2014
A stated primary purpose of the Affordable Care Act is to ensure that all Americans have access to affordable health insurance.
Over the past 2 years, we’ve watched and heard elected officials at various levels of government fabricate stories to try and convince us that having a government-legislated mandate which gives us access to affordable health insurance is bad.
The Westchester Medical Center in Valhalla, NY is a “NYS Public Benefit Corporation.” As such, it serves as a regional healthcare referral center, mandated to provide high-quality advanced health services to the residents of the Hudson Valley and the surrounding area, regardless of their ability to pay. WMC also serves as an academic medical center involved in research and education that enables advanced care and prepares future generations of physicians.
According to a report published in April 2012 in The Journal News, the medical center spent $11.8 million in 2010 to compensate 44 executives, with Michael Israel, the CEO, at the top of the list at some $1.4 Million.
Now, in a Kafkaesque twist, this over-compensated CEO of a public benefit health care provider has proclaimed they will not accept any coverage plans offered through the NYS health care exchange! (The Journal News, February 2, 2014).
The Journal News has done an admirable job following and reporting on the perpetual shenanigans which seem to plague Westchester Medical Center. Yet, leadership at WMC seems to continue to ignore the reason they enjoy the benefits of public subsidies from the local, county, state and federal governments.
Here it is: the ultimate Catch-22:
1. You have insurance.
2. The Public Benefit Corporation which was created (and continues to exist) to, “manage a health care system which will provide health care services and health facilities for the benefit of the residents of the State and the County, including to persons in need of health care services who lack the ability to pay..” won’t accept your insurance.
Folks, you just can’t make this stuff up!
Zero Sum Game
January 12, 2014
Our elected officials love to make noise about ‘holding the line on taxes’ — whether at the federal, state, county or local level.
In the private sector, we know there are 2 ways to improve fiscal efficiency. One way is to increase revenues, either by selling more products or raising prices on existing products. Another is to reduce costs.
The public sector is much more complex, because of the layers of government which often overlap and have some redundancy.
One thing is clear: if the federal government cuts back on safety net services to reduce costs, the need for those services is still there. Provision of services (or some substitute) thus rolls down to the state, county or local level. In the jargon of economists, that’s known as the ‘Zero Sum Game’.
I live in the City of Mount Vernon in lower Westchester County NY.
Westchester has a very large share of residents who are among the wealthiest Americans. Some call their Westchester residence home, while others use their Westchester property as a secondary or tertiary residence. Because of these very wealthy families who own extraordinary properties, Westchester has one of the highest median property values in the United States, and is ranked 1st of the 3143 U.S. counties in order of median property taxes.
What they fail to mention is that most properties in Westchester County are taxed by 3 different entities: The County (18%); the municipality (22%); and the school district (60%).
For me and my Mount Vernon neighbors, the estates of the landed gentry might as well be on another planet.
Those of us who live in Mount Vernon are seeing the effects first hand of what happens when politics gets in the way of reality. We experienced a very contentious and hard-fought battle for the office of County Executive in the second half of 2013.
The incumbent, Rob Astorino, campaigned relentlessly on his Tea Party platform of No Tax Increases!
Despite the fact that county property taxes in Westchester typically represent less than 20% of the total property tax burden, the sound bite of No Tax Increases, combined with a consistent message that his opponent – in his role as Mayor of New Rochelle – had raised taxes on New Rochelle property owners, Mr. Astorino gained the support of a number of factions, including some elected officials, and he was re-elected.
Now, because the County has not increased taxes, it has cut funding for vital services, and guess where the vital services are most needed?
Cities like Mount Vernon, Yonkers, New Rochelle, Peekskill are left holding the bag. No funding from the County for services? City taxpayers pick up the tab in their City budget, instead of spreading the tax burden across the broader County tax base and allowing property owners in all areas to share the cost of services which tend to impact most on lower-income areas.
A recent report ranked 4 Westchester towns — including Briarcliff, Lewisboro, Irvington and Pleasantville — as some of the safest areas in New York State to live. Those folks can well afford to pay for great schools, plenty of police, etc. in part because they don’t get burdened with covering the costs of services in less affluent communities.
Here in Mount Vernon, we have an elected City Council member who was a vehement supporter of Rob Astorino in his re-election campaign, loving the promise of no tax increases. Now, the City taxpayers are facing an 8% City tax increase in order to maintain some semblance of vital services which the County will no longer provide due to budget cuts.
Our City Council member is visiting somewhere in the Twilight Zone, creating her own illusions of reality, and she has supporters who believe in her?
Let me warn you folks: Don’t drink any of her Kool Aid! And, be very careful of the messages you hear on the election trail!
Walrus Feeling Guilty
October 4, 2013
With all of the attention on the shenanigans in Washington and the in-depth moment by moment reporting, I thought the Walrus might sit this one out, but various forces have caused guilt.
Congress certainly has the authority to challenge the Affordable Care Act. Why don’t they just challenge the ACA in Court? Why are they messing with the greatest economy in the World?
Oh, wait. They did challenge it in court. In the Supreme Court. The highest court in the land. On June 28, 2012, the United States Supreme Court issued an opinion upholding the constitutionality of the “Patient Protection and Affordable Care Act” finding that the federal government can require people to purchase affordable health care insurance coverage or face an income tax penalty.
So, we have a law which was approved by the House of Representatives, approved by the U.S. Senate, approved by the President of the U.S. and affirmed by the Supreme Court.
But, wait! We also have a splinter group of dubiously elected officials (i.e. the Ayatollah John Boehner, Cruz Control, Private Ryan, Eric “T.P.” Cantor – and others who shall remain anonymous for now).
These creatures have determined (in September 2013) that the only appropriate way for the Congress to arrive at a Continuing Budget Resolution which would keep our federal government running is to open a debate on a law which was enacted in 2010?
Now, don’t get me wrong. There are many times I wish that I could just put all of the clocks and calendars around the world on pause. Just give me a few days to catch up on all of the loose ends, and then I would restart the clocks and calendars as though those few days I had to myself were invisible and inconsequential. Sort of like a short “working vacation” in the Twilight Zone.
Boehner and his Band of Merry Men apparently have gone beyond the Twilight Zone and have jumped all the way down the rabbit hole, desperately trying to drag the rest of the country with them.
I have to wonder – how does the Supreme Court feel about this behavior?
Bad Behavior at Campaign Central
September 22, 2013
Somehow, Rob Astorino was elected to the position of Westchester County Executive in 2009. Since then, Mr. Astorino has accomplished nothing worth noting, other than a consistent and flagrant disreguard for the laws of New York State and the United States of America.
Now, Mr. Astorino is showing his true colors, attacking his Democratic Party endorsed opponent in the upcoming election for Westchester County Executive, and manufacturing reasons why his silly lawsuits against the federal government are a good idea, despite the fact that none of them have been successful.
Manufacturing his own facts, and drawing on his highly polished skills perfected during his long career as a radio broadcast journalist, Mr. Astorino and his Band of Merry Men are closely following the national model employed by Boehner, Ryan, Cruz and their ‘brothers’ using highly-charged emotional messages backed up by imaginary ‘facts’.
For some unfortunate reason, there seems to be a cohort of gullible — or perhaps dishonest? — New Rochelle residents who are willing to put their own character and reputation on the line to spread false facts.
Meanwhile, Noam Bramson, who has a solid track record of doing the right things to support and benefit the long-term success of all people in the County, is having to deal with the spillover effects of a divisive and dirty attack campaign from Mr. Astorino.
Some days, I wonder if America has been dragged down the rabbit hole by Alice and Astorino, and it’s all just a weird dream which will end with a nice cup of tea?
walrus51 