Saturday, August 18, 2018

#107 - The Week Ending 8.17.18 in the Age of Trump

Every week in Age of Trump is a new adventure, not a Raiders of the Lost Ark type of adventure, but one in which historians will look back and find a treasure trove of rich and relevant material when they begin to document, for generations to come, how America lost its way.

Here are just a few story lines which caught my eye last week.

o The prosecution in the Paul Manafort trial rested, and the defense did too, interestingly enough, without offering a defense.   Apparently they were so tired listening to the mountain of evidence against the ostrich-wearing, tax fraud and former campaign chairman for President Trump, they just gave up.  That’s one theory anyway.   The more popular thought is that theyknow that Donny Boy will simply issue Manafort his ‘Get out of Jail Free” card less than one week after his conviction comes down and his “throw away the key” sentence is doled out. 



o By my count, exactly 11 players exhibited some form of protest during the national anthem in the first week of the NFL pre-season (3 Eagles, 3 Jaguars, 3 Seahawks and 2 Dolphins).  These 11 represent less than .5% of the 2,340 players currently on NFL rosters.  Despite this, Trump’s August 10th tweet referenced “NUMEROUS players, from different teams, wanted to show their outrage” and said they “should be suspended without pay”.  These “numerous” 11 players seem to get a lot more attention from our President, while the 565 refugee children who still remain separated from their parents don’t even rate a tweet.  Maybe the President with the big brain needs as remedial math course in order to help him focus on the larger and more important matters.

o Steven Miller, the architect of the Trump Muslim ban (yes, let’s call it by its real name) and the separation of refugee children from their parents was strikingly dressed down by his own uncle in a Washington Post Editorial entitled “Stephen Miller Is an Immigration Hypocrite. I Know Because I’m His Uncle”. Dr. David S. Glosser, a retired neuropsychologist formerly of the Boston University School of Medicine, stated that if his nephew’s ideas on immigration had been in force a century ago, his family would have been wiped out. According to Dr. Glosser, his family came to the U.S. just a few years before the fear and prejudice of the “America first” nativists of the day closed U.S. borders to Jewish refugees. And sadly he noted that only seven of the 2,000 Jews who remained in their village of Antopol, Belarus survived the Holocaust.  Before this story broke, Miller was a leading contender for the biggest scumbag in an administration of scumbags.  With his own uncle’s latest revelation, he has now vaulted into the pole position.

o Family feuds in the White House were the theme of the week as Kellyanne Conway got into a public spat with her husband over his critical comments about the President . During an interview with Washington Post reporter Ben Terris, Conway complained that her husband’s recent tweets about Trump were “disrespectful” and possibly violated their “marital vows”.  A violation of their marital vows….for having a different opinion, for not drinking the Kool Aid.  It’s  hard to make this up, but with the President now doing his level best to stifle the free speech of his opponents, it looks like Kellyanne thought she would get in the act and decided she would warm up …by dumping on her husband first.

o Omarosa Manigault Newman began the Omarosa Book Tour with lessons learned from her mentor.  The highly paid former Assistant to the President, who was fired in week 10 of the 13 episode first season of the Apprentice, was the only contestant to go 0 for 3 as Project Manager and to offer to have sex with Piers Morgan just to spice up the story line.  Impressive credentials, to say the least.  Omarosa’s first shots were to call “Trump a racist” and declare that “This is an administration where everybody lies”.  Ho-hum Omarosa, tell us something we don’t already know. The White House Office of Personnel has been sifting through resumes for months looking for an adequate replacement for the controversial Apprentice star.  Maybe Gary Busey and Meatloaf are still available.  .

o Trump advocated a boycott of Harley Davidson after they announced they were moving production off shore to deal with tariffs now in play courtesy of the Trump administration. Capitalism, it’s now a crime, who knew?

o Trump sent a message to the entire national security community that dissent with him for any reason will result in personal punishment when he revoked the security clearance of former CIA Director John Brennan. The reason this is so remarkable is that it came from the White House and was never run by Trump’s own intelligence officials.  Many Trump supporters viewed it as a show of great strength from this great man.   The Wall Street Journal called it petty.  And others declared it was a way for the President to distract from the Omarosa Tapes.  If that's true, with a rumored 200 tapes still to go, we should expect to see many more revocations before the final season of this reality TV show comes to a close.

o One last interesting development, a new Gallup poll out last week showed that Trump’s approval rating has dropped to 39% while his disapproval rating increased to 56%. 

Perhaps it is now beginning to dawn on a few open minded Trump supporters, that despite all of the adventures, week in, week out, and despite their own earlier desires for disruption, that the grass is not really any greener on the other side.  Perhaps they now see, that it’s turning brown.

Wednesday, August 1, 2018

#106 - Donny's Latest "Let the Rich Get Richer" Tax Scheme


At the bottom of this post you will find various definitions of ‘cost’ from (i) dictionary.com, (ii) Wikipedia, (iii) generally accepted accounting principles (GAAP), and (iv) the US tax code

In each case the definition discusses cost as an amount paid, where money is expended, where the money is tied up and no longer available for use.  In none of these definitions do you see the word “inflation”.

OK, what does this have to do with anything ? Bear with me a moment and it will all become clear

Steve Mnuchin, the Secretary of the Treasury and Emperor Trump apparently believe that their god-given powers allow them to re-write over 100 years of established tax law while completely bypassing Congress.  The fact that no other president in the last century never reached this same conclusion, doesn’t matter to this administration, which just makes up new shit every day.


The New York Time’s first reported this late yesterday, stating that the Trump administration is studying this very possibility.  The specific idea is that the Treasury Department would change the definition of cost to include... an inflationary component.  Let me provide a simple example to explain the impact of this.

Under today’s tax law, if you bought a share of stock for $100 ten years ago, and sold it for $200 today, you would have a long term capital gain of $100 and would have to pay a 28% federal capital gains tax or $28.  Under the Emperor’s new rules that $100 cost basis would be adjusted for inflation, so over 10 years the cost basis might rise to say, $150, and the long term capital gain would be reduced to $50 ($200 - $150).  In this example the capital gains tax would be cut in half to $14.

Not bad if you are a rich old white guy with a huge ego who believes his richness is a direct result of his very large brain. 

This is simply a boondoggle for the ultra rich who have tons of unrealized long term capital gains just sitting on their books waiting for Emperor Trump to come along
                                                      
The Times sites an independent analysis from Wharton School of Finance, that fine Ivy League institution that still can’t come to grips with the fact that they actually gave the Emperor a diploma a half a century back, which suggest that more than 97 percent of the benefits of indexing capital gains for inflation would go to the top 10 percent of income earners in America. Further, nearly two-thirds of the benefits would go to the super wealthy — the top 0.1 percent of American income earners.  The cost to America will be $109 Billion over the next 11 years

The Times report was confirmed later today when a Treasury official told FOX Business that the economic impact of indexing capital gains to inflation was being evaluated by the administration.

The kicker here is that if  the Trump Administration goes through with this, yes it will eventually get overturned in the courts who will appropriately rule that this power belongs to Congress and that the Emperor really isn’t an emperor e,ven though he thinks he is.  But by the time that happens, it will be too late. You see by then, Donny Jr. and Eric will have teed up and executed a bunch of sales to take advantage of this temporary tax windfall, maybe so they can finally pay down all that Russian debt and laugh all the way to the bank.

Welcome to the New Republican Party. Welcome to the draining of the swamp.  Welcome to the greatness of America.

Nothing the Emperor does any more surprises me, but I really wonder how the rank and file of the Trump base will feel it finally dawns on them, that they were just being used as pawns in the Emperor’s “allow the rich to just get richer” scheme. 

How will they feel when they finally wake up one day and sadly realize that unbeknownst to them, they had been the ones playing the role of the fool all along.

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Definitions of ‘cost’:

Dictionary. Com.   the price paid to acquire, produce, accomplish, or maintain anything

Wikipedia - cost is the value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore. In business, the cost may be one of acquisition, in which case the amount of money expended to acquire it is counted as cost.

Generally accepted accounting principles hold that the cost principle requires that assets be recorded at the cash amount (or its equivalent) at the time that an asset is acquired. It may be one of the most important underlying guidelines in all of GAAP. 

US Tax Code - Cost basis is the original value of an asset for tax purposes, usually the purchase price, adjusted for stock splits, dividends and return of capital distributions.