The New York Times released the results of its special investigation into how Fred Trump's children (especially son, Donald) inherited their father's wealth. The piece is a well-researched and very detailed account of how the patriarch of the Trump clan transferred much of his wealth to his children before his death and avoided paying inheritance taxes on most of it. Much of this was accomplished through the manipulation of the value of the senior Trump's assets (assigning higher or lower values as it suited his and his children's interests relative to credit needs and tax liabilities). For those who are interested in the details, you can read the article here: https://www.nytimes.com/interactive/2018/10/02/us/politics/donald-trump-tax-schemes-fred-trump.html
The article by Barstow, Craig and Buettner was published yesterday and directly contradicts the carefully crafted myth that Donald Trump is a self-made millionaire. Indeed, the evidence presented in this article (Trump Engaged in Suspect Tax Schemes as He Reaped Riches From His Father) makes clear that the Donald received much more from his dear old dad than a one million dollar starter loan. In fact, the article details how Fred Trump Sr. supported his son throughout his lifetime and often rescued him from bad financial decisions.
Although most of the folks who read this article will naturally focus on its implications for the current occupant of the Oval Office, I was struck by what it says about the attitudes of many of our wealthiest citizens toward the maintenance and perpetuation of their wealth. Our government has instituted policies relative to taxes and the extension of credit that are designed to discourage the concentration of wealth in the hands of a few (e.g. graduated income tax, inheritance tax, rules about collateral and assessed value, etc.). Unfortunately, the wealthy are often expert at avoiding these checks on the concentration and perpetuation of their wealth. The burden of these regulations falls mostly on the average citizen who inherits a family farm or a home in the suburbs valued at $250,000 or less. Hence, the wealthy avoid the "death tax" and enlist the man in the street as their ally in opposing this "interference" by the government.
The Trumps are not unique in their schemes to avoid inheritances taxes and manipulate collateral and assessed value. In the United States, money continues to be concentrated in the hands of fewer and fewer folks. And the vast majority of us who are not wealthy continue to buy into the myth that we are playing by the same rules that govern our betters. We continue to admire the people who inflate invoices so that they can justify the rent increases that we will struggle to pay. We continue to believe that we have access to the same opportunity for credit that they do. After reading this article, the question that came to my mind is: When are we all going to wake up and smell the stuff that these folks are excreting?
The article by Barstow, Craig and Buettner was published yesterday and directly contradicts the carefully crafted myth that Donald Trump is a self-made millionaire. Indeed, the evidence presented in this article (Trump Engaged in Suspect Tax Schemes as He Reaped Riches From His Father) makes clear that the Donald received much more from his dear old dad than a one million dollar starter loan. In fact, the article details how Fred Trump Sr. supported his son throughout his lifetime and often rescued him from bad financial decisions.
Although most of the folks who read this article will naturally focus on its implications for the current occupant of the Oval Office, I was struck by what it says about the attitudes of many of our wealthiest citizens toward the maintenance and perpetuation of their wealth. Our government has instituted policies relative to taxes and the extension of credit that are designed to discourage the concentration of wealth in the hands of a few (e.g. graduated income tax, inheritance tax, rules about collateral and assessed value, etc.). Unfortunately, the wealthy are often expert at avoiding these checks on the concentration and perpetuation of their wealth. The burden of these regulations falls mostly on the average citizen who inherits a family farm or a home in the suburbs valued at $250,000 or less. Hence, the wealthy avoid the "death tax" and enlist the man in the street as their ally in opposing this "interference" by the government.
The Trumps are not unique in their schemes to avoid inheritances taxes and manipulate collateral and assessed value. In the United States, money continues to be concentrated in the hands of fewer and fewer folks. And the vast majority of us who are not wealthy continue to buy into the myth that we are playing by the same rules that govern our betters. We continue to admire the people who inflate invoices so that they can justify the rent increases that we will struggle to pay. We continue to believe that we have access to the same opportunity for credit that they do. After reading this article, the question that came to my mind is: When are we all going to wake up and smell the stuff that these folks are excreting?
Several years back, there was a move by some African American leaders to orchestrate a reparations program (similar to the one instituted for Japanese Americans who had been involuntarily and arbitrarily interned during World War II) but in the case of African Americans, to compensate for slavery.
ReplyDeleteThe contention was that white Americans had been able to accumulate wealth and to pass it on from generation to generation in ways that black Americans had not been able to do.
This call for reparations died a silent death. However, it does expose privilege, and as such, is a microcosm for sometimes invisible classism in American society. Obviously, this is the USA, and some, through hard work can and do rise above it all. However, less wealth means fewer opportunities, including quality of education, home ownership, availability of legal defense, and many other more subtle areas of which privileged classes are totally unaware.
Relativity is sometimes a blinding phenomenon. It boggles the mind that some would consider a million dollar loan to be a very minor hand up. Because of inflation, millionaires are much more common today. A million dollar "loan" or inheritance was a very big deal several decades ago. Back in the mid 1980s, when I was earning $35,000 per year, I would have expected $1 Million to last my entire lifetime if managed and invested properly. And, I never did quite manage to become a millionaire, so $1M is still a very big deal today!
BB
Marx called it the law of accumulation.
ReplyDeleteIt was a good idea to have the poor accumulate wealth through the housing market. Unfortunately the banks demanded regulation and control done away in return leading to the near collapse of the world economic system.
In some countries the original idea is working.
My bank was hit by a demand for "reparations" because one of their 200 predecessors had been involved in insuring "slave ships" in the late 1800. Totally ridiculous claims.
I fully supported they pulled out of the dakota pipeline project though since the originals didnt like it. No need to continue bad practice in this timeframe.
Yeah money is relative. One can become quite detached from reality when making deals involving discounts that amount to total turnover for other businesses.
What is a million bucks in new york real estate. Not something the Marcos family from the philipines would be concerned about in their former dealings in New York City.
In the roaring eighties Trump came across as a dealmaker. Someone who could make it rain after the horrible seventies. I was not so much concerned about where he got his initial downpayment. These were the times of the Carringtons, the Ewings, Falcon Crest, Thatcherism, Reagan claiming it was morning again in America.
Why did Trump just not gracefully retire?
Personally I boycot amazon a 100 percent because it stands against everything I value. Its a monopoly. Parasiting on tax payed infrastructure while not contributing to serving its employees, the common good. While destroying other business that cannot offer below cost price.
I second BB on honest enterprise and cooperation. Instead of arm twisting dealmaking and tax evasion schemes that disenfranchise swaths of fellow citizens.
The true minorities are the people who are able to become billionaires. It comes with huge responsibility toward those who provided that money through the exchange of labor or using the provided service. It is not a right to be entitled to take unfair share of the worlds available wealth. Not even when the transfer was voluntary. It bears is an obligation to serve all.
Nck
With the right opportunities, hard work CAN lift an individual's place in our society. The problem is that we all know people who work very hard and never get ahead. The prosperity gospel is about as worthless and bankrupt as Armstrongism.
ReplyDeleteThe question of reparations is a deep well - where do we draw the line? Should Native Americans be compensated for the lands and property that were stolen from their ancestors? Should Blacks be compensated for the wages that were stolen from their enslaved ancestors? Should the Irish be compensated for the horrendous discrimination that was visited on their ancestors?
There are lots of folks walking around this planet who don't deserve the circumstances in which they find themselves. Wouldn't it be better to just start where we are and try to level the playing field and give them a real opportunity to do better?
There are a lot of rich folks walking around who have done NOTHING to earn or deserve the ill-gotten wealth that their ancestors or others have given them. Why should we perpetuate that situation? I like the idea of folks earning and achieving their place in society.
A friend sent me a quote this morning:
ReplyDelete"The unrestricted competition so commonly advocated does not leave us the survival of the fittest. The unscrupulous succeed best in accumulating wealth."
-Rutherford B. Hayes, 19th US president (4 Oct 1822-1893)
People harp about the "bank bailout". The first and largest bail out in history was the compensation for slave owners after or perhaps to enable the systematic shift.
ReplyDeleteArmstrongism was right to point out that trur justice is systemic. No use for individual talented billionaires as if they own the earth they build on, exploit workers and not compensate them adequately, or created the iron, oil or vanadium that is stored in earth.
"Blessings" used to be defined as "oil". Soon everybody can access the wealth of wind or solar. God seems to be democratizing "wealth" and blessings lately over larger swaths of land.
The accumulation of wealth is not so much a moral function besides hard work, it is a law of economics. More money, better education, better network. (better as in money not morality perse)
I will not be the one to bring armstrongism to this blog. But since you mention it. One of the defining aspects of armstrongismm is the stress on the right education as a solution to most problems. Of course most philosophies claim that right education but the premiss is right.
If everyone was moral the stock market would be rising in steady pace forever and never decline.
People should start pating the true, real and full costs for the pollution they cause, the slaves that got them the chocolate in their snickers, and the labor for the ingredients in the cell of their phone that poor people dug up for their 60 percent margin phone.
Nck
It's a long established principle of Anglo law (the Westminster principle) that a taxpayer has the right to arrange his affairs so as to result in the lowest taxation. It's no different from you having a choice of crossing a toll-bridge or driving a bit further and using a free bridge. You have the right to arrange your drive to use the free one.
ReplyDeleteMy beef is the law of limited liability. People use corporations to protect themselves from natural consequences of their stupidity. The natural way is for a person to accrue assets, the second generation to add a bit more, and succeeding generations to piss it all away. The perpetual nature of the corporation mitigates that to a great extent. But when it does happen, it can be disaster. The Jubilee and seventh year debt release laws of Israel would have helped balance the effects.
Hard work helps, but it needs to be combined with intelligence. Plenty of empirical evidence to support that.