Monday, December 10, 2018

Trump, Taxes and the Times: Putting it All in Context

Back in October the New York Times grabbed a great deal of attention with a report on the finances of Donald Trump and his family, focusing in particular on the extent to which he owed his fortune to inheritance and tax evasion on that inheritance--belying his image as a nearly "self-made man." According to the report, over five decades Trump received some $413 million in cash and other assets by way of 295 "revenue streams."

At the outset Trump received "three trust funds," salaries as an "employee," and shares in his father's properties (part of an apartment building at the age of seventeen), while paying for what can fairly be called his lavish lifestyle. Where Trump's business-building was concerned, his father also provided loans far vaster than Trump initially reported, on terms (interest free, without repayment schedules, and ultimately unrepaid) that rate their being really considered gifts; his subsequent assistance in particular business ventures, like his acting as Trump's "wingman" in "greenmailing" schemes; and his timely and not always legal bail-out maneuvers when as was frequently the case Trump ran into trouble (like a $3.5 million purchase of casino chips); so that the full value of his father's assistance would seem to exceed even the vast dollar figure of such cash as he provided initially.

Finally the elder Trump passed his personal fortune itself down to his children, using three sham corporations to funnel cash from father to children through various subterfuges (like the padded bills paid to the All County Building Supply and Maintenance firm), and the undervaluation of properties to minimize the taxes on them to a degree considered extreme. (Rated at $41 million in the mid-'90s, the properties were valued at over twenty times that a few years later.) Indeed, where Fred Trump wanted the empire kept within the family, Trump was eager to liquidate his share in it, and did so at a price hundreds of millions of dollars belows its market value, in what has been interpreted as a desperate bid to get himself out of trouble yet again.

At the end of its report the New York Times article acknowledges that Trump's "keeping the truth of his money . . . hidden or obscured" was for "decades, aided and abetted by less-than-aggressive journalism." Reading that the article's wording seemed euphemistic--and as is so often the case with euphemisms regarding the prominent and powerful, dishonest. That it would be more truthful to say that the lies Trump told, lies which he parlayed into that self-made man image that was itself another, powerful revenue stream (his books, his TV show, his "Trump University"), perhaps the closest thing to a revenue stream for which he could actually take credit, were aided and abetted by fawning, sycophantic coverage reflecting the ultra-conformist deference the media and society in general shows toward wealth and status.1

Reading about all this I recalled, too, one of Thomas Piketty's more striking observations in Capital in the Twenty-First Century--the likelihood that the statistics on inequality understated the problem because of the numerous tax dodges available to and exploited by the super-rich (such as tax havens), and the simple reality that the authorities compiling such statistics are less than aggressive about painting the most dire picture. Consequently, one can regard the report as interesting not merely as a snapshot of the fortunes of one prominent figure and his family, but also methods that are in more general use among the super-rich, individually and collectively; as well as the reality that the tax haven problem to which Piketty, Zucman and others have drawn so attention is only one dimension of the evasion of taxes by the wealthiest individual. One might see in this story the lie to something else--the myth of the "self-made man," a far rarer and more complicated story than a culture that seems as addicted as ever to Horatio Alger tales can possibly acknowledge.

1. In his book Seeing is Believing Peter Biskind quipped that self-made millionaires are as common in right-wing films as are the masses in left-wing films. We are bombarded endlessly by images of self-made millionaires, and now billionaires, but when was the last time you saw the masses in a Hollywood movie?

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