Tuesday, October 8, 2019

Follow The Money

We’re getting closer to seeing Trump’s tax returns.

A federal judge on Monday dismissed President Trump’s lawsuit seeking to block the Manhattan district attorney from obtaining the president’s tax returns as part of an investigation into hush-money payments during the 2016 campaign.

That decision does not mean Trump’s tax returns will be handed over immediately. Trump appealed within minutes, and an appeals court put the case on hold until it can hear the president’s challenge.

But Monday’s ruling by U.S. Judge Victor Marrero was still a broad rejection of Trump’s precedent-shattering argument in this case.

The president argued that, as long as he is president, he cannot be investigated by any prosecutor, anywhere, for any reason.

Marrero said that was “repugnant” to an American ideal as old as the Constitution: that no man, even a president, is above the law.

So, you ask, why does it matter?  Who cares what’s buried in the morass of IRS mumbo-jumbo and legalistic terms?  Because buried in there is the truth about his dealings with foreign powers, including Russia, Saudi Arabia, and Turkey, all of whom have benefited from Trump’s handling of foreign policy to the detriment of other allies who have not been so willing to work out some kind of deal with Trump’s business ventures.

Paul Waldman:

For instance, Trump has just decided that the United States will be withdrawing troops from an area along Turkey’s border with Syria, which many are justifiably arguing is an abandonment of Kurdish forces there to be overrun and even slaughtered by the Turkish military, our lengthy alliance with the Kurds notwithstanding. Trump apparently made the decision after a phone conversation with Turkish President Recep Tayyip Erdogan.

So one might reasonably ask: How much income does Trump derive from Trump Towers Istanbul? Does that play into his thinking as he tries to balance the interests and desires of two U.S. allies that are in conflict? At the very least, we should know the extent of his financial interests in Turkey.

Imagine, if you will, what the response to the immigration issue on the southern border would be if in 2008 Trump worked out a deal with the president of Mexico to build a luxury hotel in Mexico City or one of the destinations of cruise ships such as Puerto Vallarta, and to get the deal he had to work some way of making the president of Mexico grease his palm and vice versa.  We wouldn’t be building a wall; we’d be building casinos and resorts in Juarez and Nogales and providing jobs for undocumented workers, just like he did in his own little test market, Mar-a-Lago in Florida.

In reality, I think the revelation of Trump’s taxes will show that he’s no different than any other corporation that has done everything they could within the tax code to protect their money from the IRS.  If he had truly broken the law the IRS wouldn’t be auditing him, they’d be ransacking his office; they don’t mess around.  So he’s got something to hide and is loath to reveal it.  Not that he has any sense of shame; he just thinks that it’s nobody’s business.

As to the long-term implications of Trump’s tax returns, they will likely offer the public one of the most vivid possible illustrations of how America’s wealthy avoid paying taxes. In effect, they will be nothing short of an advertisement for the campaign of the Democratic nominee for president in 2020, especially if that nominee is Elizabeth Warren or Bernie Sanders, both of whom want to impose wealth taxes and make it harder for people such as Trump to cheat, remaking the tax code so that the wealthy pay something resembling their fair share.

And right now, they don’t. As David Leonhardt details, in recent decades the combined rate of taxes paid by the ultra-wealthy (he uses the richest 400 families as an illustration) has fallen down and down: In 1950, their combined federal, state, and local taxes were 70 percent; today, the figure is only 23 percent. The result is that despite what you might think, we don’t actually have a progressive tax system but something more closely resembling a flat tax.

At their second debate in 2016, Hillary Clinton suggested that Trump was hiding his tax returns because he didn’t want the public to know that he doesn’t pay any taxes. Trump interrupted her, leaning into his microphone to say, “That makes me smart.”

That may fly in the boardroom, but when the public realizes that the guy making $7.50 an hour pays more in taxes dollar for dollar than Trump does and brags about it, it could blow up in his face.  And when it turns into how foreign policy is guided and people are literally dying for the sake of a hotel in Istanbul, it’s impeachable.

Speak!