For years, people said that Donald Trump's business practices would never survive first contact with law enforcement. Pro Publica just published a big reason why:
Documents obtained by ProPublica show stark differences in how Donald Trump’s businesses reported some expenses, profits and occupancy figures for two Manhattan buildings, giving a lender different figures than they provided to New York City tax authorities. The discrepancies made the buildings appear more profitable to the lender — and less profitable to the officials who set the buildings’ property tax.
For instance, Trump told the lender that he took in twice as much rent from one building as he reported to tax authorities during the same year, 2017. He also gave conflicting occupancy figures for one of his signature skyscrapers, located at 40 Wall Street.
Trump’s team told Ladder that occupancy was rebounding after registering a lackluster 58.9% on Dec. 31, 2012. Since then, Trump representatives reported, the building had signed new tenants. Income from them hadn’t fully been realized yet, largely because of free-rent deals, they said. But after 2015, they predicted, revenues would surge.
Documents submitted to city property tax officials show no such run-up. Trump representatives reported to the tax authorities that the building was already 81% leased in 2012.
New York prosecutors will, eventually, get Trump's tax returns. And wow, will that be fun.
Let's see, where to begin?
Finally, RawStory has a collection of responses to the President's Sharpie-altered weather map. (This is not, however, the first time the Administration has tried to make one of its Dear Leader's errors be true.) Enjoy.
Starting today, my state has some new laws:
- The gasoline tax doubled to the still-too-low 10¢ per litre. Oh my stars. How could they. Ruination. (You will detect more ironic tone if you read my post from yesterday about how much gasoline I use.) For comparison with other OECD countries, the UK adds 57.95p (73.3¢) per litre, Australia gets 41.2¢ (28.6¢ US), and even Canada levies 45¢ (34¢ US). But hey, we doubled the tax, so now we can pay for our state pension deficit fixing our infrastructure.
- Cigarette taxes went up to $2.98 a pack, and e-cigarettes now have a 15% excise. Also, we raised the legal age to buy tobacco to 21, though you can still have sex and get a drivers license at 17 and sign a contract at 18, so kids still have lots of ways to ruin their lives. (Former governor Bruce Rauner vetoed these measures last year.)
- Schools now have to provide 5 clock-hours of instruction to count as a "school day." Having gone to Illinois schools as a kid that provided 6 to 7, it's hard for me to grasp that until today, schools only had to provide 4.
- Finally, our $40 billion budget took effect today, the first time in 5 years that a state budget has taken effect on the first day of the fiscal year.
This is what happens when the party that wants to govern takes power from the party that wants to shower gifts on their rich friends. More on that in my next post.
Everyone knew that Donald Trump lost millions on bad business deals and bad management in the 1980s and 1990s. But we never knew how badly he dealt and managed until now. The New York Times obtained official IRS data on Trump's tax returns from the years 1985 to 1994, showing he lost a staggering $1.17 billion during that period—equivalent to more than $2 billion today:
Mr. Trump appears to have lost more money than nearly any other individual American taxpayer, The Times found when it compared his results with detailed information the I.R.S. compiles on an annual sampling of high-income earners. His core business losses in 1990 and 1991 — more than $250 million each year — were more than double those of the nearest taxpayers in the I.R.S. information for those years.
Over all, Mr. Trump lost so much money that he was able to avoid paying income taxes for eight of the 10 years. It is not known whether the I.R.S. later required changes after audits.
The new information also suggests that Mr. Trump’s 1990 collapse might have struck several years earlier if not for his brief side career posing as a corporate raider. From 1986 through 1988, while his core businesses languished under increasingly unsupportable debt, Mr. Trump made millions of dollars in the stock market by suggesting that he was about to take over companies. But the figures show that he lost most, if not all, of those gains after investors stopped taking his takeover talk seriously.
Jennifer Rubin finds five takeaways from the report, and Trump's non-denial of it. Her final point is spot-on:
Finally, do not expect the revelations to dim the Trump cult’s reverence for its leader. If he isn’t really as rich as he said, they will commend him for pulling a fast one (even on voters). If the story is false, it’s one more bit of evidence for their media paranoia. Sadly, the Fox News and talk-radio crowd long ago jettisoned any concerns that they’ve invested their hopes in a con man, someone who has lied and finagled his way through life and into the White House. To admit that would be to recognize they were dupes, victims of another Trump scam. That, they will never do.
The Trump cultists have gone this far and they will go farther. As Matt Ford says, we have not even begun to approach "peak Trump." It's going to be a very long 18 months until the next election.
The Chicago Tribune points out that Sears' $5 bn in losses could actually help the guy who killed it, Eddie Lampert:
As of the retailer's bankruptcy on Oct. 15, Sears estimated it had net operating losses it could use to offset $5 billion of future taxable income, and separate tax credits of around $900 million. These are the most valuable assets Sears has, and under U.S. tax law, they could disappear in bankruptcy if another company or investor takes the company over.
When a company has accumulated net operating losses, it can use them to offset future taxable income, which in turn cuts into its tax bills. The rule is meant to give struggling companies more breathing room. That means big benefits on the balance sheet. For example, Sears saved $1.7 billion in deferred taxes in 2017, according to its most recent quarterly filing.
While a sale in bankruptcy would often mean a change in control, meaning that such tax benefits are lost, Lampert's stock and debt stakes would help him avoid that. Lampert and his hedge fund ESL Investments Inc., together own about 49 percent of Sears shares, and are among Sears's biggest creditors, having extended it $2.66 billion in debt through various loans.
Creditors who have held debt for 18 months before the filing and whose debt rose in the ordinary course of Sears's business are "qualified creditors" who can thus avoid losing the tax assets even if there's a shift in control towards them.
He profits from destroying the company. Ain't America grand?
Before diving back into one of the most abominable wrecks of a software application I've seen in years, I've lined up some stuff to read when I need to take a break:
OK. Firing up Visual Studio, reaching for the Valium...
While trying to debug an ancient application that has been the undoing of just about everyone on my team, I've put these articles aside for later:
Back to the mouldering pile of fetid dingo kidneys that is this application...
The Supreme Court handed down its ruling in South Dakota v. Wayfair, Inc. this morning:
Brick-and-mortar businesses have long complained that they are disadvantaged by having to charge sales taxes while many of their online competitors do not. States have said that they are missing out on tens of billions of dollars in annual revenue under a 1992 Supreme Court ruling that helped spur the rise of internet shopping.
On Thursday, the court overruled that ruling, Quill Corporation v. North Dakota, which had said that the Constitution bars states from requiring businesses to collect sales taxes unless they have a substantial connection to the state.
South Dakota responded to Justice Kennedy’s invitation by enacting a law that required all merchants to collect a 4.5 percent sales tax if they had more than $100,000 in annual sales or more than 200 individual transactions in the state. State officials sued three large online retailers — Wayfair, Overstock.com and Newegg — for violating the law.
Here's a really interesting bit: "KENNEDY, J., delivered the opinion of the Court, in which THOMAS, GINSBURG, ALITO, and GORSUCH, JJ., joined. THOMAS, J., and GORSUCH, J., filed concurring opinions. ROBERTS, C. J., filed a dissenting opinion, in which BREYER, SOTOMAYOR, and KAGAN, JJ., joined."
Ginsburg siding with Thomas and Alito against Roberts, Sotomayor, and Kagan? That's just weird.
Tim Jones, writing in Crain's for the Better Government Association, says the experiences of Minnesota and Kansas put the lie to claims that people are leaving Illinois because of taxes:
The scapegoat nominees include not just high taxes but House Speaker Michael Madigan, Gov. Bruce Rauner, government regulations, financial chaos and uncertainty from a two-year budget stalemate, not to mention old standbys greed and corruption.
That's where Minnesota looms as a spoiler of the tax-cutting political narrative embraced by many Midwestern states. Minnesota is a high-tax state, rated the sixth-highest in the nation in state and local individual income tax collections per capita and eighth in the combined state and local tax burden, according to the most recent rankings of the Washington-based Tax Foundation.
Minnesota has a graduated income tax, with rates ranging from 5.35 percent for those of modest incomes to 9.85 percent for individuals with annual incomes above $156,000.
The Tax Foundation ranked Minnesota's overall business tax climate among the nation's worst. Even so, the state was among Midwestern leaders in population growth, with a 5.1 percent gain since 2010 and a 13.3 percent jump since 2000. The state also has the highest median household income and the lowest poverty rate.
Focusing on taxation produces a distorted picture, said Larry Jacobs, a political science professor at the University of Minnesota.
“Clearly in Minnesota there are other things going on. Taxes are one component but also jobs, wages, quality of life, the education system,” Jacobs said.
The flip side of the taxation narrative, put into action by Kansas six years ago, is that cutting taxes will give a jolt to economic development and drive population growth. But it did neither, and Republicans who control the legislature had to backtrack on the tax cuts last year when revenue loss became untenable.
See, taxes pay for things that people want and need, like transport, schools, and police. Cutting taxes, as Kansas demonstrated, means you can't pay for those things anymore. Then people don't want to live there. QED. I'm not wild about higher taxes in general, but I understand we all need to pay them to get better living conditions. I hope that J.B. Pritzker makes that point as he runs for governor this fall.
Over the weekend I made a couple of minor updates to Weather Now, and today I'm going to spend some time taking it off its Azure Web Role and moving it to an Azure Website. That will (a) save me money and (b) make deployments a lot easier.
Meanwhile, a number of articles bubbled up overnight that I'll try to read at lunchtime:
Back to Azure deployment strategies.