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Republican Legislators Made Millions From Passing Trump Tax Cut

Reprinted with permission from Alternet

Although the Tax Cuts and Jobs Act of 2017 did precious little to reduce the tax burden of middle-class Americans, it has been great for millionaires. And according to Peter Cary of the Center for Public Integrity, that includes many of the Republican senators and House members who rammed it through Congress.

Discussing the Center’s analysis of the 2017 law in an article for Vox this week, Cary explains: “Cutting tax rates for companies like Apple and hundreds of other stocks they own was one of many ways Republican lawmakers enriched themselves after they passed the tax law…. Democrats also stood to gain from the tax bill, though not one voted for it. All but 12 Republicans voted for the tax bill.”

After the Tax Cuts and Jobs Act was passed, Cary explains, stock shares increased in price. Dividends were raised — and many of the Republicans in Congress who voted for the law just happened to own stock in the companies that paid higher dividends.

“When the price of Apple stock hit a then-record high in October 2018,” Cary observes, “among the shareholders counting their gains were 43 Republicans in Congress, who collectively owned as much as $1.5 million worth of the tech giant’s shares.”

One of the Republicans who has benefited from owning Apple shares is Sen. David Purdue of Georgia.

Cary notes, “Perdue is one of the wealthiest senators, with a net worth of $15.8 million — $14 million of which is in stocks, according to Roll Call. In 2018, with his wife, Perdue owned $100,000 to $250,000 in Apple stock, he reported. The couple sold some of it and received annual dividends and capital gains that year between $15,000 and $50,000.”

Cary goes on to explain that “net corporate dividends reached a new high in 2018 of more than $1.3 trillion, nearly 6 percent more than the previous year…. Bigger dividends put even more money in the pockets of stockholders.”

Liberal economists like Paul Krugman (a long-time New York Times columnist) and Robert Reich (who served as secretary of labor under President Bill Clinton) have been highly critical of the Tax Cuts and Jobs Act, arguing that it ignored the needs of the American middle class. Cary, similarly, stresses that the “benefits” of the law — which reduced the corporate tax rate in the U.S. from 35 percent to 21 percent —  “mainly went to the rich, as the wealthiest 10 percent of Americans own 84 percent of all stocks.

“The ten richest Republicans in Congress in 2017 who voted for the tax bill held more than $731 million in assets — almost two-thirds of which were in stocks, bonds, mutual funds, and other instruments, according to Roll Call’s semiannual assessment of Congress’ wealth,” Cary reports.

Cary wraps up his article with a quote from Craig Holman of the watchdog group Public Citizen. Holman said of millionaires in Congress, “They are passing tax laws and legislation that disproportionately favors the wealthy class, and that means they personally benefit from this type of legislation. And from what we’ve seen — especially from the Tax Cuts And Jobs Act of 2017 — that tax bill clearly favored the very wealthy over the rest of Americans, and that means it favored Congress over the rest of America.”

Trump Tax Cut Saved Billions For Banks That Cut US Jobs

Donald Trump promised the 2017 Republican tax law would create jobs and support the middle class. Instead, six big banks have pocketed an additional $32 billion in savings — while cutting more than 1,000 jobs — over the past couple of years as a result of that law, Bloomberg reported Thursday.

Bloomberg calculated the additional savings from the GOP tax law by looking at the tax rates banks paid before the 2017 law (30 percent) to the rates the banks paid after the law went into effect (between 18 percent and 20 percent). The banks saw an additional $14 billion in profits in 2018, then another $18 billion in additional profits in 2019.

In the meantime, the banks also cut their workforce by a combined 1,200 jobs by the end of 2019.

The six banks include JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley.

Much of the savings come on the backs of consumers through credit card debt, according to Ken Leon, director of equity research at CFRA Research. The consumer credit card market is “still a leading growth driver for the consumer bank,” he told the Washington Post.

“Even though consumers are confident, people are still carrying significant debt,” Ted Rossman, an analyst for CreditCards.com, told the Post. “From a bank’s perspective, that is a big moneymaker. From a consumer’s perspective, I would encourage everyone to pay that down.”

While big banks are soaking up excess savings and slashing jobs, many families throughout America have not seen the same types of benefits from the 2017 law.

Two years after the tax bill sailed through Congress without a single vote from Democrats, NPR declared that the law has “failed to deliver on GOP promises.” The outlet reported that more than 60 percent of the tax savings went to the wealthiest 20 percent of Americans, leaving 80 percent of Americans behind.

Rather than the “rocket fuel” Trump promised for the economy, NPR reported that the U.S. economy grew at 2.9 percent- in 2019 in the wake of the tax bill’s passage — the same growth as in 2015, during President Obama’s penultimate year in office.

Further, rather than “pay[ing] for itself,” as Treasury Secretary Steve Mnuchin once claimed, NPR reported that the tax law is responsible for massive increases in the federal deficit. Last year, the deficit topped $1 trillion dollars — exactly as experts had predicted it would as a result of the GOP bill.

Big banks and other major companies have tried to play off the tax law’s benefits as a boon to the American worker regardless. In the immediate aftermath of the bill becoming law, many private companies issued press releases touting bonuses for their workers. However, the total bonuses workers received in 2018, compared to the year before, was just one cent more, according to the Economic Policy Institute.

In 2019, the Wall Street Journal reported that additional bonuses for workers “appear to largely have been a one-time windfall,” with companies no longer handing out similar bonuses in the second year the law was in effect.

Published with permission of The American Independent Foundation.

Treasury Inspector General Probes Trump Tax Cut Abuse

Reprinted with permission from ProPublica.

The Treasury Department’s inspector general is looking into the opportunity zone program following stories by ProPublica and The New York Times about how the tax break meant to help the poor had been manipulated by billionaires.

The development, which was first reported by NBC News, comes after three congressional Democrats wrote to Treasury’s inspector general in October asking for the probe and citing the ProPublica and Times stories.

“We are conducting an inquiry, and expect to complete our work and respond to the Congressional requesters in early spring,” Deputy Inspector General Richard Delmar said in a statement.

The opportunity zone program, passed as part of the 2017 Trump tax overhaul, offers tax breaks to investors who put money into specially designated areas. While it was pitched as a way to help struggling neighborhoods, ProPublica and others have documented how the process has appeared to benefit billionaires with investments in areas that should not have qualified. In other cases, governors have granted the tax break to their political donors and, in some cases, themselves or their families.

Sen. Cory Booker, an architect of the program, along with Reps. Emanuel Cleaver and Ron Kind, asked the inspector general to do a “complete review” of areas picked for the opportunity zone tax break to see if they were truly eligible. The October letter also asked the inspector general to collect all correspondence between Treasury, White House officials and outside interests about the process.

The inspector general said that once the inquiry is complete it plans to publicly post its response to the congressional Democrats.

Do you have access to information about opportunity zones that should be public? Email justin@propublica.org. Here’s how to send tips and documents to ProPublica securely.

DeBlasio Asks New York District Attorney To Probe Trump Taxes

Reprinted with permission from ProPublica.

New York Mayor Bill de Blasio said Friday that he had asked Manhattan’s district attorney to investigate discrepancies ProPublica and WNYC revealed last fall between what President Donald Trump’s company reported in filings to city tax officials and what it reported in loan filings. The discrepancies made his properties seem more profitable to a lender and less profitable to the city’s tax authorities.

After ProPublica published its findings, de Blasio said Friday, the city decided to examine the issues. That process resulted in one matter being turned over to the district attorney in November. De Blasio said he made the referral “because there is a possibility of a criminal act having been committed.” The referral related to Trump’s historic downtown skyscraper at 40 Wall Street, a city spokeswoman added.

De Blasio’s comments came during a conversation with WNYC reporter and “Trump, Inc.” podcast co-host Ilya Marritz on the “Ask the Mayor” segment of “The Brian Lehrer Show.” De Blasio, who ended a presidential bid in September, said Trump’s efforts to avoid taxes have gone beyond the measures taken by most wealthy Americans. He “consistently has believed he was above the law, even before he was president,” de Blasio said. “So this is a real problem, and I think there could be some real exposure here.”

In an emailed statement, a Trump Organization spokeswoman blasted de Blasio for “using the power of his office to try and launch an investigation into his political opponent.” The statement called the allegations “unfounded and clearly motivated by politics.”

A mayoral spokeswoman said that “the Manhattan DA is the proper jurisdiction to investigate these claims, as the city can only review what is directly reported to us. The DA has the jurisdiction to take appropriate steps if they find wrongdoing.”

A spokesman for Manhattan District Attorney Cyrus Vance Jr. declined to comment.

For its October article, ProPublica used New York’s Freedom of Information Law to request records from Trump’s property tax appeals for four buildings, among them 40 Wall Street, Trump Tower and the Trump International Hotel and Tower. ProPublica compared those records with loan documents that became public when Trump’s lender, Ladder Capital, sold the debt on his properties as part of mortgage-backed securities. Both sets of records list multiple real estate and financial metrics, including occupancy, income and expenses.

In the case of 40 Wall Street, for example, documents intended for investors showed a striking rise in occupancy, illustrating the sort of “leasing momentum” that lenders and investors like to see. The company had told a lender that 40 Wall Street was 58.9 percent leased on Dec. 31, 2012, rising to 95 percent a few years later. But in filings with tax officials, the company reported it was already 81 percent leased as of Jan. 5, 2013.

A refinancing occurred in 2015, but as of 2018, the building had not met underwriters’ profit expectations, spending three months on a servicer’s “watch list” in 2016 because of lagging profit.

The story also found that in the lender’s reports, the building cited lower expenditures for property insurance and a ground lease than it did in filings made to tax officials some years. That made 40 Wall Street appear more profitable to lenders than it did to tax authorities.

A subsequent ProPublica story found that Trump Tower’s tax and loan filings also exhibited inconsistencies, even as to how much space the Trump’s company occupied in Trump Tower. The tower’s overall occupancy rate during three consecutive years appeared 11, 16 and 16 percentage points higher in filings to a lender than in reports to city tax officials, records showed.

Trump Organization attributed the discrepancies to differences in the reporting requirements for preparing tax submissions and loan submissions.

The city’s Tax Commission, which handles property tax appeals, also reviewed submissions by Trump’s company for space it owns in the Trump International Hotel and Tower, a person knowledgeable about the commission said. Trump’s company had failed to report income from antennae it rents on the roof. The commission’s examination, according to the person, found no problem.

Last year, former Trump lawyer Michael Cohen, who is now in prison, testified before Congress that Trump sometimes boosted the value of his assets in documents given to lenders in order to secure loans and reduced those values to lower their tax value. The Trump Organization and Trump himself are fighting multiple subpoenas for financial and tax records.

Photo Credit: Gage Skidmore