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posted by martyb on Monday December 05 2016, @05:19AM   Printer-friendly
from the perfectly-legal-loopholes dept.

Drew Harwell over at the Washington Post has an interesting story about a tax loophole that could allow Trump appointees to avoid paying millions in taxes.

President-elect Donald Trump's ultra-wealthy Cabinet nominees will be able to avoid paying millions of dollars in taxes in the coming weeks when they sell some of their holdings to avoid conflicts of interest in their new positions.

The tax advantage will allow Trump officials, forced by ethics laws to sell certain assets, to defer the weighty tax bills they would otherwise owe on the profits from selling stock and other holdings.

The benefit is one of the more subtle ways that the millionaires and billionaires of Trump's White House, which already will be the wealthiest administration in modern American history, could benefit financially from their transition into the nation's halls of power.

The legal tax maneuver, offered for years to executive-branch appointees and employees, was designed to help ease the sting of being forced to suddenly sell investments.

But the federal program, encoded in Section 2634 of federal ethics laws and known as a "certificate of divestiture," has never been tested quite like this. Trump's Cabinet picks have amassed assets worth billions of dollars from lifetimes in banking and investing, much of which they will be able to sell tax-free.


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  • (Score: 3, Interesting) by butthurt on Monday December 05 2016, @10:12AM

    by butthurt (6141) on Monday December 05 2016, @10:12AM (#437114) Journal

    Trump [...] could just as easily have found himself on the losing side of the election [...]

    Mr. Trump announced the deal last Wednesday, 22 days after the election.

    https://twitter.com/realDonaldTrump/status/803805823503925250 [twitter.com]

    Trump might possibly have had a hand in pushing for a tax deal - a deal he had zero authority himself to guarantee or enforce [...]

    He did have a hand in it, according to the company's announcement:

    We are pleased to have reached a deal with President-elect Trump & VP-elect Pence to keep close to 1,000 jobs in Indy.

    -- https://twitter.com/Carrier/status/803764047300722688 [twitter.com]

    The above Twitter posts are linked from a CBS News story: http://www.cbsnews.com/news/carrier-corp-announces-deal-with-trump-to-keep-jobs-in-indiana/ [cbsnews.com]

    According to another CBS News story:

    Carrier has contended that a $7 million tax break from the Indiana Economic Development Corporation, a quasi-public organization, was what made it change its mind about moving all its Indianapolis jobs to Mexico. The deal was brokered by President-elect Trump and Vice President-elect Mike Pence, who is Indiana’s governor and chairs the economic development group.

    -- http://www.cbsnews.com/news/carrier-united-technologies-donald-trump-indiana/ [cbsnews.com]

    Likelier, less conspiracy-laden, less biased interpretation:

    Trump knew about Carrier's plans because he owns stock in the parent company.

    It may have happened that way. A lesser leader might have hesitated to arrange a deal involving a company he or she owned, to avoid criticism over the conflict of interest.

    There's no conspiracy; it's all open and legitimate: Mr. Trump disclosed his holdings; he, Governor Pence and the company announced publicly that they'd sat down and made a deal. They did nothing wrong: in Pence's words,

    Trump said America would start winning again and we just won. This is just the beginning of a lot more good news across America.

    -- http://www.wthr.com/article/update-state-of-indiana-offers-carrier-7m-deal [wthr.com]

    The stockholders win, some of the workers (1,069 of 1,400 in Indianapolis get to keep their jobs) may win, and even the Indiana taxpayers may win.

    If you think Trump knew, or forced something through (how, beggars the imagination at this point since he wasn't in office then and isn't in office yet) then go ahead.

    According to Governor Pence (source: same WTHR story), Donald Trump is "a man of action and a man of his word." That's authority. If Mr. Trump promises something, we can count on it happening once he does take office. Governor Pence, of course, is already in office as governor of Indiana.

    Prove it, and work with the prosecutors to secure an indictment.

    I don't see a crime here, rather an opportunity.

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  • (Score: 0) by Anonymous Coward on Monday December 05 2016, @01:46PM

    by Anonymous Coward on Monday December 05 2016, @01:46PM (#437142)

    > I don't see a crime here, rather an opportunity.

    Where you see opportunity, I see a line of greedy corporations lining up for a handout. And if Trump owns Carrier stock, I also see a conflict of interest.

    If the numbers are really $7M and 1000 jobs, that is only $7000 per job, so Indiana got off pretty cheaply. Not that this is anything new, corps have been suckering states and local governments for tax abatement and other handouts for many years, often at *much* higher cost. Don't forget that tax abatement for some, means higher taxes for everyone else.