The Good News

(Update: Thanks again to Infidel753 for including this article in Crooks&Liars' Mike's Blog Round Up. I should mention this article is the twin article to a Bad News article that you might want to read to get a sense of balance on what's happening right now, thank you. Here's hoping things improve after January 20!)

After what needed saying earlier, here are the Good News: 

Despite all of trump's bluster, bullying, and open intent to disrupt the Electoral College count... and despite the Congressional Republicans' attempt to object to the results... The 2020 elections are finally done and Joe Biden will be the next President of the United States on January 20, 2021.

No matter what donald trump will attempt next to avoid what's coming for him - another coup attempt, another riot in Washington DC or elsewhere so he could declare martial law and suspend the whole government, declare war on Iran and impose emergency powers through that (even if that could work) - on January 20 he is officially out of office and can get dragged out of the White House by his diapers if need be. Anything trump could try to do to retain power - or embezzle, or straight-up steal from the federal coffers - will end the second Biden puts hand to Bible and swears the Oath of Office.

Granted, this means that between here and now trump can and will do anything like that to make sure he squeezes out the last penny he can get, but the odds already are that most of the Executive agencies are putting holds on any actions until the incoming Biden administration can sort things out.

In other news, the confirmation means Kamala Harris is the next Vice President. She will be the first woman elected on the Presidential ticket, albeit as the Veep. Harris will be the first woman President of the Senate, which has great significance which I'll get into later. She is the first bi-racial Veep, making her both the first Black American Veep (and second Black American winning the ticket since Obama) and the first Indian (Asian, not Native) American at that high an office.

The incoming Biden administration means we will be getting in 10 days a President who will take the COVID-19 Pandemic serious, and with luck control our nation's response in a more effective, swift manner than the incompetent trump.

In other political news, the seditious riot in Washington overwhelmed the news that Democrats in Georgia won both Senate race runoffs. Not only are two potentially corrupt Republican Senators out of office, but this means the Democrats hold a 50-50 split with Republicans for Senate control... which Kamala Harris makes a 51-vote "majority" as Senate President (the official title/duties of the VP).

This means that a more liberal agenda can get considered and even passed through Congress that otherwise would have been shut down by obstructionist Mitch McConnell had he retained a one-seat majority. It does depend on how the most conservative Dem left in the Senate - Manchin from West Virginia - will set the rules for the rest of his party to accept, but a lot of reforms to the existing health care system, voting rights, wages and employment help, student debt relief, energy and environmental policies, police reforms and social justice, and financial systems can get passed through the House and squeaked through that Senate.

It does depend on what happens to the filibuster and cloture rules - something that Manchin views as tools he still needs to hold influence above his fellow Senators - but the urgency in getting those bills passed during this pandemic crisis would make it likely a lot of it will get done.

Before I get any further, what happened in Georgia was historic and epic in their own ways. Raphael Warnock will be the first Black man elected to the Senate from that Deep South state (the first Black Democrat as well, although not the first Black Senator from the former Confederacy because Mississippi sent two during Reconstruction, and South Carolina has elected Republican Tim Scott in 2014 in a special election). Fellow Democrat Jon Ossoff is the first Jewish Senator elected from the Deep South since 1879.

Their victories matter a lot because they represent a significant shift in the voting demographics in Georgia. Ever since the party shifts of the Republicans going full Conservative since the 1990s, when they became dominant in the state and federal elections, this is the first crack in the Republican political control of the Southeastern U.S. region (AKA the Southern Strategy). Granted, Florida has fluctuated as a battleground state to where Dems have a chance to win, and the Republicans have lost Virginia since 2006. But Florida hasn't been considered a Deep South state since the population boom of the 1980s brought too many Northern liberals and Midwest moderates into the state. Virginia is now so much a part of the DC metro area - heavily liberal suburbs dependent on Federal largesse expanding into the northern counties - that the Conservative power base in that state can't compete. Getting a seriously Deep South state (from Louisiana through Mississippi and Alabama and Georgia and South Carolina) to flip Blue in major elections after 25-30 years of Red Conservative dominance is a sign the Far Right control of a heavily-populated region is about to collapse. That it's Georgia - the next-largest Electoral state behind Texas (which is divergent enough to be its own political ecosystem) and Florida - means the Republicans can plan on losing future Presidential bids for the 2020s decade and beyond.

The Georgia results is also major vindication for Stacey Abrams. Denied a win of the Governor's seat in 2018 due to ethically-questionable behavior from the Republican winner Kemp, Abrams took her national profile from that campaign and turned it into a voter-registration drive to break the GOP's voter suppression efforts and return more favorable results for her fellow Democrats. In the process, she demonstrated to the national Democratic leadership - which at times refuses to organize and recruit in states they felt were lost to them already - that YES it does matter to fight for every vote in every state, and has likely established to other state party leaders how to organize their own efforts to win in other hard Red states.

There are thousands of others in Georgia who worked hard to get the voters registered and motivated, and to her credit Abrams congratulates them as much as everyone else is congratulating her. Her celebrity stock among Democrats is sky high right now, she's proven herself a major player, and with luck she's converting her credibility among the leadership to expand the voter effort and seat challenges everywhere she can. If anyone can work to get more states to turn Blue, it's her.

Speaking of the DC Metro, one of the Democratic party agendas can well get passed within the first month of Biden's tenure: Statehood for DC and Puerto Rico. While these aren't popular issues with the nation at large - and heavily despised and dreaded by Republicans - these are key issues with Democrats looking at the big picture of Senate control. Right now, too many small population states - mostly in the Midwest - are heavily conservative and unlikely to consider Democratic choices for election. These small Red states have few residents, but will have outsized representation in a Senate that constitutionally grants every state Two Senators no matter what. This means roughly 30 percent of the nation's population gets 60-70 percent control of the Senate (another element of Minority Party Rule at the federal level). the demographic and geographic advantage of such skewed representation can hinder the American majority's needs to get things done (at all, given the GOP's obstructionist ways).

The recent trumpian assault on the nation's Capitol is another reason to expect Democrats to push for DC statehood right away: That lack of state-level control prevented the local authorities from aiding in either crowd control during the rally as well as stopping them from protecting the Capitol when the Capitol police got overwhelmed. DC's National Guard doesn't answer to the city, they answered to the DoD (which meant trump and his people benefited from them standing down: Congress had to get National Guard aid from Virginia and Maryland, and even then trump's Pentagon delayed Maryland's response). You can expect the Dems to proceed on granting DC statehood - that the local citizenry need to establish their own law enforcement and protect their own rights - on those grounds alone.

But what will happen with DC - and Puerto Rico - statehood is the expansion of the American charter to more diverse populations. DC is well-known as a Black-majority metropolis (although in truth the ethnicity is more even between Blacks and White in the last ten years of gentrification). Puerto Rico would become the first true Latino-majority state (98 percent!) in the U.S. (New Mexico would be closest at 42 percent). Entering both into the ranks of statehood would be major historical achievements for any Presidential administration (and we haven't done so since 1959).

Ironically, these moves for statehood might not resolve the Senate control in the Democrats' favor: Latinos in 2020 voted in surprisingly high numbers for Republicans, even in spite of the Republicans' harsh anti-immigration stances towards their very ethnic group. That's because the Latinos do not vote on any one singular issue, and are socially conservative on enough matters that Republicans still appeal to them. This would be interesting to witness down the line, but still this coming event should be considered good news for the betterment of the United States' soul.

We're also looking at the good news of Democrats pushing for voting rights laws to fill the void created by bad Supreme Court rulings and by decades' worth of Republican suppression. One thing I'm personally hoping for is a dedicated effort to kill off the Gerrymanders - used by battleground Red states to skew results and corruptly maintain Minority Party rule - and make more states competitive in elections. The Democrats need to, otherwise they run the risk of losing control of the House again like what happened in 2010.

Other good news to consider is that the United States can get back on good terms with our allied nations in Europe and Asia after four years of chaotic and harsh trumpian meddling. We can see the United States resume normal relations with Mexico - and see about undoing the ecological damage that trump's wall obsession had caused. We'll be rejoining the Paris Climate Agreements. We should see more efforts to spread high-speed Internet into rural areas (this would be a big deal where I live). 

We should see a lot of work done to investigate the horrors committed on immigrant and refugee families under trump's draconian rule. We can pray that many of the families pulled apart - and as many children wounded by trump's policies can be recovered - can be mended as best as possible under a more humane immigration system. Depending on if trump and his lackey Stephen Miller haven't blown it all up before Biden takes office.

A lot of this is still speculative. We have to see how things turn out on January 20 and from then on.

But we're facing a better future now than the chaotic uncertainty and violence of the trump regime.

Hope still matters.

Digging Into trump's Tax Dirt

There's a debate tonight but I don't give a rat's ass because unless trump goes batshit crazy and vomits on everybody this will not change a lot of voters' minds.

In the meanwhile, following up on trump's tax troubles, I spotted a Tweet from John Rogers about reading a tax expert's - Daniel Shaviro a professor on tax law out of NYU - evaluation of the Times' revelations to get a better idea how much trouble trump is in:

2) Trump appears to be an absolutely terrible businessman. This is a man who netted $606 million over nineteen years (from 2000 to 2018) through The Apprentice, licensing and endorsements, and investments and businesses run by others, and yet has created enormous financial peril for himself by buying prestige business properties for high prices, and then pouring cash into them without thereby generating positive net returns. Even with the cash infusions, his personally run businesses have continued to lose a great deal of money (even leaving aside depreciation deductions that might or might not be accompanied by actual declines in economic value). One therefore suspects that he is simply funding the negative cash flow, not creating new value that might pay off in the future...

3) As a matter of net worth, Trump appears not to be rich (despite his having inherited a large fortune). The impending financial liabilities, and selling off of assets (plus taking out of loans) to keep the cash flowing is only one reason for concluding that, as a matter of net worth (as distinct, from say, lifestyle), Trump does not appear to be rich. Consider that, from 2000 to 2018, his net profit from assets – his own businesses, plus investments in businesses run by others – is only $4.2 million (the excess of his investment gains over his business losses).

This is about $220,000 per year. Just as a very general ballpark comparison, if you were earning $220,000 per year from assets that offered, say, a regular 4 percent annual return, that would imply that you were worth only $5.5 million...

While 5.5 million isn't something to sneeze at for middle-class folk, trump has been selling himself as a BILLIONAIRE, of which 5.5 million is metaphorically pocket change (think about the $2000 you got in your checking account compared to the three quarters, two dimes, and five nickels in your change dish).

What trump is doing, from what I can tell, is create the illusion of wealth in order to convince others of it: Spending lavishly and indulgently on luxury items as though that's all there is to it. Thing is, that kind of wasteful spending helps explain why trump also appears to be massively in debt. Back to Shaviro:

4) There is nothing wrong in principle with using true economic losses to offset the tax that would otherwise be due on gains – but it also isn’t clever tax planning. The late, great Martin Ginsburg – a famous tax lawyer and the spouse of the recently deceased Supreme Court Justice Ruth Bader Ginsburg – once jokingly described what he called the “Herman tax shelter.” The idea was that, if you need, say, a $1 million tax deduction, your fictional accountant Herman could say: “Give me $1 million, I’ll steal it from you and go to a country where you can’t reach me, and voila, you have a $1 million theft loss.”

The gist is: Planning to get a deduction is useless if the plan involves you losing too much money in the first place. If that's all that trump is doing here with reporting losses to the IRS every year, it would still be reckless behavior because it's all focused on the now (short-term) and doesn't allow to invest or plan long-term, which cuts into profits down the road. In short: trump's an idiot.

We therefore should distinguish between (a) Trump’s losing so much money over the years – be it from bad luck, bad judgment, or incompetence – and (b) his also taking a number of tax positions that, as I discuss next, appear to be questionable or even fraudulent. The real losses rightfully offset tax on the gains, insofar as using them in the way he did was legally permissible, and the adverse inferences to be drawn from them lie outside the tax system (although again, as per the fallacy in the “Herman tax shelter,” they do not reflect clever tax planning).

The fifth point on Shaviro's list answers a long-standing argument about trump's refusal to go public with his tax returns. A lot of his critics believed his excuse of getting "audited" by the IRS was asinine, but it turns out the IRS *is* investigating him for a questionable refund filing from 2007-09. So Shaviro looks at that and I want to quote him in full:

5) The ongoing IRS audit dispute regarding a $72.5 million loss deduction looks very bad for Trump. The Times article suggests that the key issue, for most or all of this claimed loss, is a “worthless stock deduction” from abandoning his interest in the disastrous Atlantic City casino venture. Many years ago, when I was in tax practice, I actually worked on this precise legal issue (for a corporate client of my law firm), so I am quite familiar with it. When you own equity (such as Trump’s partnership interests in the Atlantic City activity) that has lost enormous value, typically the equity constitutes a “capital asset.” If you sell it for an enormous loss, that is only a capital loss, and deduction of the loss is limited to the sum of (a) net capital gains for the year, and (b) $3,000. Disallowed losses are carried forward, but at $3,000 per year they may be worth very little, unless your income in future years includes large capital gains. But if the investment is utterly worthless and you abandon it for zero consideration, it becomes an “ordinary” loss (i.e., one that is not subject to the limits on deducting capital losses).

Trump apparently did this with his Atlantic City partnership interests, and claimed an ordinary loss that seems to have made up much or all of the $72.5 million. But he received back a 5 percent interest in the stock of the new entity. As the Times article rightly notes, this could establish that the entire abandonment loss claim was legally invalid. He would merely have sold his once-valuable asset for a large capital loss, the use of which would be sharply restricted as described above. The Times notes that losing on this issue – as it appears he should, if the stated facts are accurate and relevantly complete – would cause him to owe the IRS about $100 million, given interest on the prior refund. This leaves aside the possibility of civil or criminal tax penalties for claiming an abandonment loss despite receiving consideration back.

We're now getting into the criminal stuff in trump's tax returns, and also why trump is so desperate to cheat his way into a second term to avoid prosecution. Rather than take the capital loss which was limited, trump filed for the ordinary loss to get unlimited return... even though the stocks he received from the transaction did not make the loss worthless. This is tax fraud, and unless his lawyers beat the IRS into submission (or he bullies them directly, which would be an abuse of office) trump is going to pay one way or another.

It gets more serious from here:

6) The consulting fees that Trump’s various foreign businesses paid to Ivanka Trump and others look potentially fraudulent. The Times article cites 20 percent consulting fees that foreign Trump businesses regularly deducted by reason of paying them to unnamed consultants. Some of these fees pertained to activities in which Trump’s role as an investor was ostensibly entirely passive, meaning that he wasn’t engaged in making any of the business decisions. Consulting fees also appear to have been paid to family members such as Ivanka Trump. She got consulting fees with respect to businesses for which she simultaneously worked as an executive, and thus as an employee.

Based on what the article says, several different types of fraud may have been involved here. Fees paid to family members who did not provide services in return would be improper deductions. Fees paid to “consultants” who were employees might be properly deductible by the business – as salary – but would potentially trigger 3.8 percent payroll tax liability by the recipient under the so-called Medicare payroll tax. Fees that were actually gifts to family members were not properly deductible, and also may have generated gift tax liability on Trump’s part that the mislabeling helped to conceal.

From what I can tell, the trump family was double-dipping, getting paid twice for the same job (with the second "job" a no-show consulting excuse). Violations of payroll tax and Medicare tax codes. This is where it's not just trump on the line, it's the whole fcking family.

7) Other improper deductions that may have been claimed fraudulently. The Times article notes several different types of improper deductions for business expenses that appear to have been personal, and hence not allowable under the federal income tax...

In short: This is where the jokes about $70,000 haircuts come in. Seriously though:

Similarly, the Times article raises serious questions about deductions for a residential property, described by Eric Trump as the family “compound,” on the ground that it was an investment property being held for profit. The very year after the investment designation was made, Trump claimed a deduction for a charitable easement that precluded development of much of the property. Happening just a year later (and possibly foreseen), this would only add to the difficulty of establishing the requisite profit motive.

A further instance of potential fraud relates to deducting legal fees that may have related to Trump’s 2016 presidential campaign, rather than to his business activities. This may even include the hush money payment to Stormy Daniels, if it was improperly amalgamated with actual legal fees...

And this is where the state attorney's investigations into trump kick in. Where the IRS is one level of trouble, the state of New York is a level trump can't bully or hinder (thank you, Separation of Powers between State and Federal). This has been where the tax returns fight had been at its harshest, with trump fighting tooth and nail to prevent the local DA from getting into his financials. Well, it looks like that's a little too late...

Much like the debate happening about... oh RIGHT NOW... these revelations won't change a single mind among the 40 percent that makes up trump's rabid fanbase.

But these revelations expose just how weak trump's position truly is: facing likely criminal charges and civil lawsuits (he can delay the former but facing too many of the latter), trump is relying far too much on foreign creditors and foreign dirty money to survive even day-to-day.

This unfortunately makes him dangerous in an election cycle: trump has every reason to cheat to stay one step ahead of the law he's supposed to uphold.

This thankfully also makes it easier for the rest of us to understand what's at stake and vote the thieving con artist out of office.

We need to do this, America. We cannot survive with a tax fraud and financial disaster running the White House.

Things I Want To Hear From Obama During This Afternoon's Speech

I originally posted this at Ta-Nehisi's house.  Hope he doesn't mind.

"If we want to be serious about reducing the deficits and reducing our debt, we NEED to look at how our government gets its revenues."

"We need to raise the taxes on those who can afford it: the millionaires and billionaires who still profited during these last three years of hardship while the middle class struggled to stay out of poverty. Not to raise such taxes as a putative measure, but to ensure that every American is paying their fair share into fixing our financial problems."

"We need to begin closing tax loopholes for corporations. Especially any tax loophole that benefits too few companies at the expense of the nation. And especially any loophole that does not hamper or prevent corporations from generating honest profit."

"Also, you all should really buy a copy of Paul Wartenberg's ebook. He needs the moneys. And some of the stories in that collection are pretty funny. Word."

"Also, I strongly suggest that every American hugs a puppy or kitten today. If you're allergic, perhaps a Pokemon action figure."

"One last thing. I wasn't born in Hawaii. I was born on the planet Krypton, sent here by my true father Marlon Brando to... wait, I already did this joke, didn't I?"

To dream the impossible dream...

Florida state amendments off the ballots

In a massive rebuke, a unanimous (do you know how rare that is these days?) Florida Supreme Court rejected three of the possible state amendment referendums yesterday. Jeb Bush reportedly seen clutching a security blanket and sucking his thumb afterward.

The three amendment proposals were:

• Amendment 5 - which cut property taxes to fund schools, in exchange for a vaguely defined tax swap that could shift the tax burden to higher sales taxes. The amendment was noted for being poorly worded, failing to highlight how the shift could take place, that the revenues generated by the sales tax would still fail to compensate for the lost revenues from the property tax, and that the tax shift wasn't even guaranteed (any law including the word 'might' means it will never happen). It was also noted for being full-out batsh-t EVIL!
• Amendments 7 and 9 - sideways attempts at re-introducing vouchers (which has become a pet project of social conservatives to get more public money into religious private schools): Amendment 7 was removing the "no aid" language that bars state money from going to religious institutions, number 9 requiring school districts to spend at least 65 percent of their money in classrooms but also eliminating the need for a 'uniform' public school system (meaning private schools could take over). In both amendments' cases, the court ruled that the group who submitted them - Jeb Bush's Taxation and Budget Reform Commission - did not have the authority to shove those two onto the ballot.

All in all, this means two things:

1. The social cons are going to try even nastier tricks next time, and
2. Our tax system still won't get the real reform it needs to ensure better school funding

Peace out! I'm off to ride the MIGHTY MOONWORM!

Aftermath of Florida Amendment 1: We're not even seeing the worst of it yet

So far, the only response I've gotten on this blog has been my post about the Florida Amendment One proposal at the beginning of this year. Mainly, I was against it, as it 1) it wasn't going to be the answer to people's problems with their homes not selling and their mortgages getting tighter; and 2) it wasn't going to solve the revenue problems the state was facing, simply because by cutting back on the taxes that generate the revenue Florida statewide services (schools, libraries, police, fire emergency, child care, road care, health care, all care) needed it was going to cut services at the worst possible time.

The amendment happened because politicians fell in love with tax-cutting. Tax cutting made them look like they were being fiscally responsible. Tax cutting made them popular with people who kept thinking "Oh, I don't wanna pay taxes, why worry about road repairs and law enforcement and fire/emergency response times?" And because if they didn't keep pursuing tax cuts bullies like the Club For Growth Greed were going to hound them out of office.

But the problem is, tax cuts can only go so far: we're at the point now where the state can't generate any more revenue. And Florida, which relies on tourist sales taxation, millage taxation, and very little else for state revenue, is still facing a year of fewer homes owned and fewer tourists traveling (notice the cost of gas recently?). And the Florida state budget is starting to reflect the last few years of decreasing revenue.

We now have in the news that school districts are facing severe cuts to where they are laying off teachers and closing schools. Teachers that are remaining are facing a 2 percent salary cut in some districts: they are already one of the lowest-paid employees in the public sector anywhere, in a state that's routinely at the bottom of the list when it comes to education spending. Counties are looking at 15 percent cuts across the board at various service offices, with the sheriff's looking at 10 percent cuts. And do you want to know the worst part about all this?

We're not seeing the worst of it yet.

The whole nation is, let's admit it, in a recession: jobs are down, the dollar is weak and shrinking on the global market, oil and food (!!!) prices are going up on a global scale, you name it. What will happen is that more and more people are going to demand more and more help from one of the cornerstones of society, the one stable force in an unstable world. The government. BUT THERE WILL BE NO GOVERNMENT TO HELP THEM. The money's drying up, gone, we're losing it just as people are going to be needing government services to get food on their tables, to deal with health care, for city and suburban infrastructure, help to find jobs, help to keep their kids in schools and off the streets, pretty much help that they expect from an institution that's supposed to promote the general welfare of the people.

This is what constant tax cutting gets you: a government unable to help when it's needed most. We didn't need tax cuts: WE NEEDED FAIR TAXES. And we're still waiting for that.

Amendment we DON'T need: Florida Amendment 1

This Tuesday, Florida will host a primary for Republicans (and Democrats, even though the DNC has barred delegates from the state because we're voting out of turn). There will also be a ballot for a state amendment, meant to reform our state's property tax laws and supposedly making things easier for homeowners.

The amendment, in short, sucks.

To quote from Jeff Webb's article I linked to:

For sure, Florida's tax system is a mess and it needs reform desperately. But the deceitful deal that is Amendment 1 doesn't do the job; it only perpetuates the inequities and gives people an undeserved sense of confidence in their lawmakers.

And make no mistake about it: That's exactly what the politicians who back Amendment 1 are seeking. They want to go on the campaign trail this year and crow about how they saved you money by cutting your taxes.

(Remember, these are the same people who still claim - amazingly, with straight faces - that they solved the homeowners insurance crisis.)

So what exactly would fix Florida's tax system?

For one thing, recognition by both voters and politicians that, dammit, things cost money. We look to government to fix our roads, hire the police, clean the water, rebuild our schools, aid us during and after disasters, and take care of a hundred other things. That means governments have to establish taxes in order to pay for all those things. That means taxes are, honestly, a necessary evil. The question becomes, "How do we keep taxes fair?"

The answer isn't "Cut taxes," which seems to be the only answer politicians are willing to provide. Nobody wants to be on record as saying we need to raise them, or keep them at certain levels, because then the anti-tax nuts will go on the warpath and everything sensible gets tossed overboard. As a result, the incoming revenue stream gets narrowed with those cuts, just as government services have to expand in order to meet more needs of a state that has outgrown its limits (overpopulation, which is stressing our schools, transportation, water supply, health care service, and everything else).

There was already a major budget cut hit this past year in 2007, a lot to do with the fact that Florida can no longer rely on sales taxes and property taxes to pay for everything the state needs to do. Home sales and new constructions are down due to a massive market downturn (which is another disaster story altogether). Home values are dropping, screwing up the math of property assessment and taxation. Instead of expanding services, the state government had to cut back, and also cut back funding to the counties and cities, hurting those groups' abilities to fund their services. (Disclosure: I work as a public librarian whose library system exists on state and county funding)

Instead of trying to wow the voters with a Super Homestead Exemption, which looks so pretty on paper but which can come back to bite us on the ass, the state of Florida needs to switch to a State Income Tax system. Yes, there's about 900 million people screaming about how Florida never needed a state-level income tax system to mess things up further. But here's the deal: relying on property and sales taxes ain't helping. Florida is one of the few states left that HASN'T gone to an income tax system, and maybe that's saying something that the other states know what they're doing.