Renegade Economists Show 466
The race is on to trace Trump’s real estate loopholes and the possible handouts he will deliver for fellow rent-seekers. However, there are already so many that enable rentiers to avoid paying anything back for the billions and billions in unearned income they enjoy each year. Will Naomi Klein ever wake up to this?
The guiding principal of US foreign policy is to make the world safe for American Capital.
“LAND, n. A part of the earth’s surface, considered as property. The theory that land is property subject to private ownership and control is the foundation of modern society, and is eminently worthy of the superstructure. Carried to its logical conclusion, it means that some have the right to prevent others from living; for the right to own implies the right exclusively to occupy; and in fact laws of trespass are enacted wherever property in land is recognised. It follows that if the whole area of terra firma is owned by A, B and C, there will be no place for D, E, F and G to be born, or, born as trespassers, to exist.
( “The Devil’s Dictionary”) Bierce, Ambrose.
The presumptive Republican presidential nominee reported $2.5 million in income from the project between January 2014 and July 2015 and an additional $323,000 in management fees in the months since, according to his financial disclosure report.
Trump’s Riches and Real Estate Tax Racket – Prospect
“The Declaration of Independence may tell us that all men are created equal, but the government definitely favors us real estate investors!” boasts the Trump University book entitled “Commercial Real Estate Investing 101.”
The New York Times found that Trump has used his political connections to secure nearly $900 million in tax breaks, grants, and subsidies to build up his real-estate empire in New York City.
Nearly all real-estate operations are run through tax-friendly limited liability corporations. With a standard corporate structure, the government levies taxes twice—on the corporation’s own profits and on employees’ incomes. Not so with LLCs, which pass through all profits to the owners as income, to be taxed once. All told, Trump has at least 240 LLCs, including the flagship Trump Organization, and a web of others set up for individual real-estate properties.
Depreciation: Consider his $150 million purchase of the National Doral Miami golf resort in 2012, which he secured with the help of a $125 million loan from Deutsche Bank. Over a 39-year depreciation period for commercial real estate, Trump is able to deduct about $3.85 million a year, even though his own money backs just 17 percent of the property value (and even though the true value of the resort is increasing).
AP Photo, File
New York Times journalist David Cay Johnston found that in 1978, while living a lavish lifestyle in Manhattan, Donald Trump paid no income tax. Here, Trump, along with New York Governor Hugh Carey, New York City Mayor Ed Koch, and Urban Development Corporation Executive Vice President Robert T. Dormer unveil plans for the New York Hyatt Hotel/Convention facility on June 28, 1978.
It would only take seven years for Trump to write off his entire cash investment in the resort—and write it off almost another five times through the full 39-year schedule.
“When you put together depreciation on buildings, and do it with borrowed money, you get a negative tax rate. You just can’t help it,” says Robert McIntyre, director of the tax fairness group Citizens for Tax Justice.
Dan Rostenkowski, the Democratic chair for the House Ways and Means Committee from 1981 to 1994, was reportedly once so fed up with the brazen tax welfare for real estate that he threatened to make the whole sector tax-exempt, which actually would have increased investors’ tax bills since they’d no longer be able to write off unlimited losses against traditional income.
Watch the loopholes mentioned at the top of this article, I should have highlighted this!
Last year was a record for foreign investment in U.S. commercial properties — with cross-border spending nearing $100 billion — according to real estate research firm Real Capital Analytics. That’s 18 percent of total U.S. commercial real estate spending, up from a four-year average of 10 percent.
Part of the ultra-luxury housing segment, Trump-branded projects are already being sold at a premium of 35% to 60% compared to similar projects in the same area. Real estate experts say the idea of living in President Trump’s building will only add to this.
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