Home > Uncategorized > Trump family and friends: in your pockets

Trump family and friends: in your pockets

from Dean Baker

Donald Trump has openly said that he doesn’t care at all about the rules that prohibit the president and those around him from profiting from their government positions. In breaking with longstanding precedent, he is holding on to his business empire and having his children run it as he carries on with the business of being president.

With the government forced to pay the bills for the Secret Service to stay at his golf resorts and hotels, Trump obviously feels no compunction about gouging taxpayers to put more money in his pockets. But this open graft is almost certainly the least important way in which Donald Trump’s family and friends will profit at the expense of the rest of us.

We still don’t know most of the details of Trump’s tax plan, but the main parts of the plan we do know look like it was written to benefit him personally as much as possible. First, it gets rid of the Alternative Minimum Tax (AMT). This tax was put into law in 1986 to ensure that wealthy people, who can use deductions to drastically reduce their taxes, will still have to pay some amount of tax.

In his leaked 2005 tax return we know that Trump paid 25 percent AMT rather than the much lower rate that his aggressive use of tax loopholes would have allowed. It’s not a big surprise then, that Trump’s tax plan gets rid of the AMT. 

Trump is also proposing to allow individuals who have pass-through corporations to pay his newly lowered 15 percent corporate income tax rate instead of the top individual tax rate that he would set at 35 percent. The vast majority of Donald Trump’s income comes through pass-through corporations, which means that he would likely be paying a tax rate of less than 15 percent under his tax plan. Of course all rich people will arrange to have their money come through pass-through corporations if the Trump tax plan goes into effect, but he will have a head start.

Trump also eliminates the estate tax, a tax that only 0.2 percent of estates pay now. (If you think your kids are going to be paying the estate you’re deluded about your wealth.) Since Trump is likely to have an estate worth billions when he dies, this tax cut could easily put more than a billion dollars into his kids’ pockets.

But a tax code designed for the very rich is only the beginning. Trump is intent on running the whole government to make him and his family and friends richer.

During the campaign, Trump endlessly complained about China’s “currency manipulation.” He argued, with real cause, that China’s practice of propping up the dollar against the Chinese yuan was increasing the US trade deficit and costing us manufacturing jobs. He assured us that he would get tough with the Chinese and demand they raise the value of their currency.

When he had the opportunity to press his case in a meeting China’s President Xi Jinping last month, he folded completely. He came out of the meeting and told everyone that he and President Xi were good buddies and he could see no reason to press Mr. Xi about the currency values. While Trump didn’t get anything that would improve the job prospects of American workers, China did grant Ivanka Trump several valuable trademarks, so he didn’t walk away empty-handed.

But it is not just the Trump family that is profiting off his administration, the investor Carl Ichan, who serves as all purpose “unpaid” adviser looks to earn a substantial profit off of his advice. Ichan engaged in discussions on altering federal regulations that require refineries to use a certain amount of ethanol in gasoline and other refined products.

Following these discussions, Trump reversed a position he had taken in his campaign. Ichan stands to make more than $100 million from this reversal.

Unfortunately, letting the affected industry control the regulatory process seems to be pretty much the norm in the Trump administration. His top financial regulators are virtually all from Wall Street, with Goldman Sachs being the leading source of Trump team talent.

Trump’s pick to head the Federal Communications Commission is a former lawyer for Verizon whose first target in his new position is to end the policy of net neutrality, which ensured everyone equal access to the web. Scott Gottlieb, Trump’s pick to head the Food and Drug Administration, was a board member of a pharmaceutical company and has received hundreds of thousands of dollars for fees as a consultant to the industry.

In short, the outlook for most of the country may not look great in the Trump years, but Trump’s family friends should do very well.

See article on original site

  1. May 16, 2017 at 6:26 pm

    iTrumpet is actually doing US citizens a much needed favor. That administration of pirates has come out in the open and is clearly showing everyone what has been going on since the richest man in the country called a convention to overthrow the articles of confederation.

    Now the US has a commercial document for a constitution with a few amendments added to get it passed or take advantage of new opportunities.

    Okay. Universal suffrage for both men and women was a good idea.

    Yea! Dean Baker. You are definitely talking real economics.

  2. Risk Analyst
    May 16, 2017 at 6:48 pm

    So let’s see. Trump is seventy-something years old and given the poor choices from the Democratic party’s leadership and their support for Elizabeth Warren I’m guessing that Trump will be re-elected. That makes it eight years he will be president. So, your case here is that Trump is spending most of the last half of whatever years he has in his life pursuing a tax minimization scheme. He put his investments and real estate empire on hold, walked away from it, just to deal with his federal tax form and help some friends.

    • rjw
      May 16, 2017 at 8:32 pm

      I think it really more of an ego trip for him. The man is a walking ego. The fact he can profit enormously by shaping policy rules, and that what benefits him personally is magically just the same stuff he claims will make the US “great” again, is a secondary factor. I rather quickly came to the view firmly that this would be one of the most corrupt administrations around. Because people like Trump really believe they are the movers and shakers that create wealth. They “deserve” to be able to milk the system. It is astonishing hubris, but Trump has exactly that astonishing sense of entitlement that comes from an almost total lack of self awareness.

      • Risk Analyst
        May 16, 2017 at 8:48 pm

        I will not disagree with anything you just said. My point is just that I do not believe the primary goal for him is wealth maximization. I believe he really does believe what he says.

      • May 17, 2017 at 10:47 am

        I had a patient once who firmly believed his touch could spread good health and good fortune. The other side of his delusion was a bit more disturbing. He believed if you stopped him from touching you, then he had to kill you. He killed one person with a hammer. Similar with Trump. He believes his judgement, speech, and intellect is first class. Everyone should pledge loyalty to him. Everyone would benefit. The disturbing side of this delusion is Trump will destroy you (no murders that I know of, yet) if you refuse to pledge that loyalty. Most “high powered” business people are narcissistic sociopaths. Otherwise they wouldn’t last long in the business pressure cooker. Trump’s problems are two fold. He wants to be but can’t perform like the “high powered” business people around him. And, his narcissism won’t allow him to do anything to fix problem no. 1. This leads to erratic and unpredictable actions. And to a tendency for fits of rage. Trump’s a box of dynamite that could explode anytime.

        And on that question of Trump’s wealth. Depending on whose estimates you choose Trump’s income is between $160 and $350 million per year. His properties are all mortgaged for more than their face value. Even the new face value for “the” President. His total debts are about $1.6 billion. As my oil industry friends in TX say, wealth is just a matter of having a large cash flow, even if it’s not your cash. Trump has that. But he is not wealthy. He does not own the properties that provide him that cash flow, since the mortgage is larger than the value of the properties. But he was taught some effective huckstering skills by his father and Roy Cohn. Trump has relied on those skills most of his life.

    • May 17, 2017 at 7:23 pm

      Quote, “So, your case here is that Trump is spending most of the last half of whatever years he has in his life pursuing a tax minimization scheme.” I don’t think this is an accurate view of the case Baker is making. The case Baker is making is clearly stated in the first sentence of his article, “Donald Trump has openly said that he doesn’t care at all about the rules that prohibit the president and those around him from profiting from their government positions.”

      Quote, “I believe he really does believe what he says.” And I believe that hardly matters when we have a president who does not have any of the qualities needed to be president.

      Quote from an article in yesterday’s NY Times, “The 25th Amendment Solution for Removing Trump,’ (https://www.nytimes.com/2017/05/16/opinion/25th-amendment-trump.html?_r=0): A president, “… needs some basic attributes: a reasonable level of intellectual curiosity, a certain seriousness of purpose, a basic level of managerial competence, a decent attention span, a functional moral compass, a measure of restraint and self-control. And if a president is deficient in one or more of them, you can be sure it will be exposed.

      Trump is seemingly deficient in them all.”

      And so the author goes on to make a good case for removing this 70-something child from office.

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