We spotted this field almost overgrown with poppies on our way through Norfolk. It was startling enough to brake hard, stop and photograph.
Quote of the Day
”The delicate operation of separating an American from the four-wheel part of him has to be performed with tact.”
- Architect Philip Johnson in his essay “The Town and the Automobile or the Pride of Elm Street”, 1955
Musical replacement for the morning’s radio news
Bach – Brandenburg Concerto No. 4 in G major BWV 1049 – Sato | Netherlands Bach Society
The nub of Trump’s tax returns
Marvellous scoop by the New York Times and a very long read.
Here’s what I think is the gist:
Mr. Trump’s net income from his fame — his 50 percent share of “The Apprentice,” together with the riches showered upon him by the scores of suitors paying to use his name — totaled $427.4 million through 2018. A further $176.5 million in profit came to him through his investment in two highly successful office buildings.
So how did he escape nearly all taxes on that fortune? Even the effective tax rate paid by the wealthiest 1 percent of Americans could have caused him to pay more than $100 million.
The answer rests in a third category of Mr. Trump’s endeavors: businesses that he owns and runs himself. The collective and persistent losses he reported from them largely absolved him from paying federal income taxes on the $600 million from “The Apprentice,” branding deals and investments.
That equation is a key element of the alchemy of Mr. Trump’s finances: using the proceeds of his celebrity to purchase and prop up risky businesses, then wielding their losses to avoid taxes.
Throughout his career, Mr. Trump’s business losses have often accumulated in sums larger than could be used to reduce taxes on other income in a single year. But the tax code offers a workaround: With some restrictions, business owners can carry forward leftover losses to reduce taxes in future years.
That provision has been the background music to Mr. Trump’s life. As The Times’s previous reporting on his 1995 return showed, the nearly $1 billion in losses from his early-1990s collapse generated a tax deduction that he could use for up to 18 years going forward.
The newer tax returns show that Mr. Trump burned through the last of the tax-reducing power of that $1 billion in 2005, just as a torrent of entertainment riches began coming his way following the debut of “The Apprentice” the year before.
For 2005 through 2007, cash from licensing deals and endorsements filled Mr. Trump’s bank accounts with $120 million in pure profit. With no prior-year losses left to reduce his taxable income, he paid substantial federal income taxes for the first time in his life: a total of $70.1 million.
As his celebrity income swelled, Mr. Trump went on a buying spree unlike any he had had since the 1980s, when eager banks and his father’s wealth allowed him to buy or build the casinos, airplanes, yacht and old hotel that would soon lay him low.
When “The Apprentice” premiered, Mr. Trump had opened only two golf courses and was renovating two more. By the end of 2015, he had 15 courses and was transforming the Old Post Office building in Washington into a Trump International Hotel. But rather than making him wealthier, the tax records reveal as never before, each new acquisition only fed the downward draft on his bottom line.
Interesting. I didn’t know he had a golf course in Ireland. I wonder if any of my golfing friends know that.
And here’s Politico’s succinct summary:
TOP LINE 1: Trump paid $750 in income tax the year he won the presidency. He paid another $750 in his first year in the White House.
TOP LINE 2: In 10 of the previous 15 years, he paid no income tax at all.
TOP LINE 3: He did this despite raking in hundreds of millions of dollars a year, the NYT reports, by racking up huge losses to avoid tax. His top businesses lost millions per year — he blew $70,000 on “hairstyling” alone.
TOP LINE 4: Trump faces an audit over a $73 million tax refund he received after declaring massive losses — an adverse ruling could cost him over $100 million.
TOP LINE 5: Within the next four years, Trump faces more than $300 million worth of loans coming due.
The Times summarises it all as: “Ultimately, Mr. Trump has been more successful playing a business mogul than being one in real life.”
My summary: And this is news?
Also: It goes without saying that Trump is a fraud and a moral cretin. And I’m sure the engineered bankruptcy of many of his businesses destroyed many lives. But actually he was mostly doing what many unscrupulous accountants would have advised him to do — to exploit the bankruptcy laws and the fact that it can make sense to accumulate losses to be set against tax in future years.
Before we let our moral indignation carry us away, though, there is the awkward fact that we routinely tolerate even more unscrupulous abuses. Think, for example, of the private equity racket, which has been used in the UK and elsewhere to destroy perfectly good businesses by buying them cheap, loading them with debt, stripping their assets and then letting them rot. It’s happening now to some venerable High Street businesses. And the people who are doing it are, among other things, prized donors to a certain political party.
Meanwhile in Covid-land…
If I were a betting man I’d be looking for odds on the prospect that Boris Johnson will not be Prime Minister for much longer. If the Tories are good at one thing, it’s the ruthless disposal of leaders who look like endangering their hold on power. They did it to Macmillan in the 1960s and even to Thatcher at the height of her pomp. And of course to Head Girl Theresa May in recent memory. All of the indications now are that Johnson’s backbenchers are increasingly posed-off with the chaos at the top and its accompanying authoritarian tone. Politico today quotes a text from an unnamed Conservative backbencher saying
“Which clown-faced moron thought it would be a good idea to kick thousands of pissed people out from the pubs into the street and onto the tube at the same time? It’s like some sort of sick experiment to see if you can incubate a second wave.”
Shrewd punters will now be keeping an eye on Rishi Sunak and Michael Gove with Sajid Javid as a 100 to 1 outsider.
What’s really bugging the backbenchers is the increasingly authoritarian tone of Johnson’s “diktats” about local lockdowns etc — all issued without any consultation with Parliament. That’s because in fact the author of these decrees is Dominic Cummings, who has no time at all for parliament, or indeed for any democratic process other than elections.
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