Today’s episode is a Tommentary on… Trump. Look I can’t help it, he’s the news right now. I’ve got a few thoughts on Trump’s taxes and his comments on PTSD that may run counter to what you’ve been hearing. Also I speculate on what a liberal version of Trump might look like.
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There are the issues with his tax return:
1. He hasn’t officially released his taxes as everyone else does.
2. He lost almost 1B at a time when the economy was doing well.
3. He claims that his business exp would allow him to fix govt. Losing 1B doesn’t give me a lot of confidence.
4. What do his other tax returns show about his business savvy?
To me the issues aren’t with the write off but with how they contrast with his claims of being the best at … everything.
I totally agree.
I don’t think we know exactly how Trump lost $900+ million. I originally assumed that he was just writing off real estate value loses, which seems like a reasonable possibility for a multi-billion dollar property mogul.
This is the only reputable explanation I could find (and it’s pretty short and speculative): http://www.npr.org/2016/10/04/496596466/how-donald-trump-lost-916-million
In the end, I don;t think you can use his personal tax records to judge his business savvy.You have to look at the corporate records.
As for capital gains tax rates, the issue for Romney, in my mind, was that he was benefiting from a special tax rate for a type of income that only the rich can take full advantage of, one that was instituted by rich politicians lobbied by much richer donors. All while complaining behind closed doors about the freeloading lower 47%.
In Canada, we only have to claim 50% of our capital gains as income, which I think is ridiculous (in the sense that I don’t understand what makes capital gains so wonderful that they need to be extra encouraged by having such a lower effective rate). This makes are approach similar to US (where the capital gains rate is about 1/2 the regular rate.
I think to whatever extent Romney’s tax-rate hurt him, it had to do with the 47 percent narrative that his campaign espoused, if not the actual quote, then at least the general theme of scapegoating “certain people” who take more than they contribute.
With Trump, I think they’re trying to both drive a wedge between him and his supporters who struggle to keep themselves afloat financially, and based on what Clinton said in the first debate, to undercut his attacks on the Obama administration’s ineffective domestic policy (i.e., “we could fix our schools if wealthy people paid more in taxes”). Also, given Trump’s impressive reluctance to release his tax records, his documented history of illegal political contributions funneled through charities, use of other’s charitable donations to buy himself gifts, his company’s six bankruptcies, false claims about charitable donations that were never made, collecting a $150,000 9-11 business recovery grant meant for small businesses, his alleged financial ties to organized crime, his violation of the Cuban embargo, his obscene insistence that he doesn’t have to pay contractors contractually agreed upon wages if he doesn’t feel like it, et al., it’s not unreasonable to imagine that people will question the legitimacy of his deductions.
I agree that it’s a tough criticism to make though. Trump can pretty easily deflect criticism that in taking these deductions, he opted to not financially support our troops and police officers by claiming that he didn’t trust the government’s ability to manage those funds effectively. I think the Clinton campaign is banking on that hurting him more than it helps.
On PTSD, I agree that the outrage was probably excessive, or at the very least, off-target. It was important that he be called out for using the term “strong,” not just to police his words, but to note that this taps into a damaging cultural norm that keeps people from seeking help and costs lives. I also think it’s important to discuss how the terms public figures use fit into larger narratives and contain implications, but it definitely felt sensationalized to see “Trump Implies Veterans With PTSD are Weak” in headlines.
That said, while I know you referred to the rest of his statement as generally on the right side of things, if presented as the “usual Trump bullshit,” it’s important not to overlook the fact that talking about mental health and suicide in Trump’s tired, self-aggrandizing tone full of vaguery and empty-promises is, in itself, outrageous. When it comes to mental health treatment, you have to back up your claims to be considered ethical, and while it seems like Trump’s assertion is that he’ll fix the administration of the VA, which seems more managerial than treatment-related, he is claiming that his administration will improve outcomes for people in need of treatment. That is an effectiveness claim, and without anymore than his promise of good intentions and business acumen, it’s an irresponsible claim.
I definitely relate to your struggling with candidates who have glaring, obscene behaviors but represent the best option for our nation’s interests. I think we make these decisions every election cycle. I proudly voted for Obama in 2012 despite the fact that he’d expanded the drone program (which has resulted in the deaths of innocent men, women, and children) and failed to close Guantanamo Bay (which is an indefensible collection of human rights abuses). There’s probably some distinction to be made (i.e., necessities of national security vs. a history of sexual assault), but I guess I want to push back against the idea that Trump is something totally new and unique.
Finally, I don’t want to pile on, but I agree with your response to the listener’s comment from last week.
I buy an apple, I sell the apple, I pay a tax rate on the profit. I buy a business (stock), I sell the business, I pay a lower tax rate? I don’t think the tax rate on capital gains needs to be crazy high, but I don’t understand why it is arbitrarily low, either.
I’d like to offer the reason that I personally find low tax rates among the rich so appalling, particularly considering the lack of charitable donations from Trump.
There’s a significant difference between the poor, middle class, the wealthy, and the 1%. When you’re living paycheck-to-paycheck, the actual amount of money you pay in taxes can be a *significant* drain on your income, with a concrete impact on your family’s wellbeing. The more wealthy you get, the smaller the effect of losing a certain percentage gets, until you get to people with Trump’s (alleged) wealth. At that point, your taxes are just the difference between a fleet of 25 or 26 golden ivory yachts. Those taxes are ostensibly used to help people, so while it is understandable for working families to try and minimize their tax payments because it could make the difference for a good school for their kids, or some other essential need, when someone like Trump skimps on their taxes it demonstrates their greed. It shows that they value that one extra bit of incredibly extraneous luxury above helping people, above (ironically) being a patriot and helping pay cops, build roads, etc.
In short, Trump doesn’t need that billionth dollar. The poor do.
You’re absolutely right in your stance on Tracy Moody’s on-line harassment. From what I heard, that guy was a creep and there is no way to tell a dangerous creep from a benign one. In fact, from Tracy’s viewpoint, there really cannot be a benign creep. Anyone who will not leave you alone when asked to do so over and over again, is a creep and a potentially dangerous person. They are someone who has blatantly demonstrated callous disregard for the feelings and sensibilities of this person they are supposedly in “love” with. In a perfect world, unsolicited behavior of that type toward a stranger should be enough to get them arrested.
Hi Tomas,
I’m admittedly a bit naive regarding many financial matters, so feel free to correct me as needed; also, not coming from the US, the laws might not exactly match up. So, grains of salt!
I’ve heard you say several times that stock market investment is important to provide cash flow to businesses and support entrepreneurship and so on. I completely agree with those ideas, but as I understand only the initial offering of a company on the market provides cash to the company – everything after that is just investors passing money between each other, and the company sees none of that. So, why couldn’t we come up with a system that rewards investment in those initial offerings, whilst taxing those other, less productive transactions (like the proposed micro tax on every trade).
Regarding capital gains tax, first I’d ask why you think your capital gain should be taxed any differently to any other income? Just because you made the investment with post-tax income, doesn’t mean your profits should be treated with any special favour by the tax system!
Where I am, basically you pay X% on a capital gain if you cash it out within 1 year of the original expenditure; after 1 year you only pay (X/2)%. I think “X” is your regular income tax rate. What I don’t understand is, why the discount at all? Why should one type of income be favoured over others (or, from a different angle, why should wage income be penalised compared to arguably less productive capital gains)?
There are probably good uses for a capital gain discount – perhaps it really helps small businesses, or small investors, for example. But at that point, you could implement a system where your largest source of income gets taxed according to the marginal rate, and the smaller stream receives the discount.
I largely agree with the rest of your Tommentary, though – there are plenty of reasons to criticise Trump without blowing a misused word out of proportion, or maligning his use of tax law to best minimise his tax burden; and your analysis of the situation with Tracey seemed entirely reasonable to me (it seems like a bad idea to automatically assume that someone who has displayed aberrant behaviours will behave rationally in the future, particularly when people who know them can’t even offer reassurance!).
Good call on critcising the commenter who said Tracey was overreacting to her stalker. So the commenter’s advice is that she should not be cautious and should give someone she doesn’t know the benefit of the doubt because he’s probably not a murderer?? Idiot
Trump’s non-payment of taxes is an issue because it shows he is selfish, a taker, not invested in the country he claims to love. The subject would be COMPLETELY shut down if he had, number1, contributed 30% of his income or wealth to a charity or cause that he thinks will “make America great again”, and then, number 2, publicized the heck out of the fact that the tax codes are so messed up that this is the way that said cause has to be funded.
But we know that he gives almost nothing to charity, far less than he claims to give, and uses his charitable foundation to pay his bills and bribe politicians to not investigate him. So his motivations are exposed as completely selfish, uncaring, even cruel… and deeply, deeply unpatriotic.
Funding the common good according to ability is his patriotic duty, and he has failed in a shocking manner.
If there were a democratic candidate who was found to be this self serving and cruel, with zero positive characteristics (and remember, there was no mystery on this regarding Trump from day 1), he (and especially she) would not have made it past the primary for the position of dogcatcher.
Thomas – you may have already tried this but if you want other good representation for the mythicist theory both Richard Carrier and David Fitzgerald should be easily accessible.