The plan creates a massive loophole with which ordinary people can evade taxes. Instead of just working for Vox.com, I could form DylanCorp LLC, contract with Vox to provide writing services, and pay a 15 percent rate on DylanCorp’s earnings rather than my current 25 percent rate. For rich people paying a top rate of 39.6 percent (or the top individual rate of 33 percent that Trump proposed during the campaign)
.. A new study finds that when Kansas exempted pass-through income, the result wasn’t more investment or growth but a surge in this kind of tax avoidance.
.. the Trump Organization, and the entire Trump family. The Trump Organization isn’t a “C corporation.” It doesn’t pay corporate income tax. Instead, it’s structured as a collection of pass-through enterprises, so the vast majority of income accruing to Trump and his family is taxed through this system. Trump almost certainly pays the 39.6 percent rate on his earnings, so he’s cutting his own top tax rate by more than half. It’s the most transparently self-interested policy he’s proposed since taking office, and it will likely save him tens of millions of dollars.
.. That return also implied that without the alternative minimum tax, which Trump wants to repeal, he would have paid less than 3.5 percent of his income in federal income taxes. Cutting the pass-through rate while repealing the AMT would probably reduce his tax burden to roughly half that level. Instead of paying $38 million, he could’ve paid less than $3 million.
.. A paper by Berkeley economist Stefano DellaVigna and co-authors found that Italian Prime Minister Silvio Berlusconi’s TV network, Mediaset, saw profits grow by at least €1 billion during his time as premier, not necessarily due to graft but because businesses shifted advertising to Mediaset as a way to lobby Berlusconi.
Trump’s Italian Prototype
But the most important – and the most worrying – qualities they share is an ability to substitute salesmanship for substance, a willingness to tell bald-faced lies in pursuit of publicity and advantage, and an eagerness to intimidate critics into silence.
Berlusconi’s policy platforms, even his fundamental ideology, have always lacked consistency. During his successful campaigns, he said whatever it took to win votes; during his three terms in office, he used the same tactic to form coalitions. His only agenda was to protect or advance his own business interests.
.. Berlusconi’s greatest successes – especially during his 2001-2006 and 2008-2011 terms (he also served in 1994-1995) – lay in the manipulation of media and public opinion.
.. He somehow lulled Italians into believing that all was well in their economy and society, even in the wake of the 2008 global economic crisis, when plainly it was not. Under his leadership, Italy lost many years when its government should have been pursuing critical reforms.
.. How did Berlusconi achieve this? For the most part, he used the joke, the lie, and the smile. When that didn’t work, he resorted to bullying, including through libel suits.
.. In fact, few media tycoons – Berlusconi owns Italy’s main commercial television channels and several daily newspapers (either directly or through his family) – have ever been as freewheeling in their use of libel litigation to silence journalists and other critics.
.. (Full disclosure: As Editor of The Economist, I was the target of two libel suits by Berlusconi.)
.. All of these tactics are in Trump’s inventory. Trump is aggressive with his opponents, especially in the media. Throughout his business career, he has frequently invoked libel laws. If he wins the presidency, he has said, he will seek to control media criticism. And yet his essential message is optimistic, delivered with a joke and a big smile.
.. What is important is that both Trump and Berlusconi are ruthless and willing to resort to any means to achieve their (self-serving) ends.
Democrats need to get a grip if they want to win next time
Saying you lost because the system was rigged against you is self-flattery, and it doesn’t help you learn anything about what to do next time.
.. FBI Director James Comey’s interference in the election was inappropriate and quite possibly swayed the outcome. The best way to prevent that from happening again is to do what political parties usually do: nominate a candidate who is not under investigation by the FBI.
.. Clinton failed to offer a compelling message on how she would help middle-income Americans get ahead through work — a failure that has been common for Republican and Democratic politicians in recent years, but that Trump managed to avoid. The next Democratic nominee will need to figure out how to convince voters he or she can succeed in fixing the job market where Trump fails.
Most importantly, Clinton had major conflict-of-interest issues that positioned her poorly to take advantage of Trump’s corruption.
.. Voters were reasonably suspicious of how much money she and her husband had been able to make by monetizing their contacts and influence, and of what favors they might owe as a result of that.
.. Pick a candidate who can capitalize on Trump’s failures
.. A candidate with a better pitch for these voters — one who understood the skepticism of new, complex government programs at a time of low trust in institutions — probably would have beaten Trump.
.. For all the complaining about how unfair everything was this time, Democrats had the easier hand to play in this campaign than Republicans did.
Democrats faced an often-hostile FBI and a meddlesome Russian government. Republicans had Donald Trump at the top of their ticket. I wouldn’t trade.
.. As Luigi Zingales wrote last month, drawing on his experience observing Silvio Berlusconi’s opponents in Italy, the way you beat the inept clown who runs your country is through normal politics. Instead of focusing your message on how ridiculous he is, focus on how what he’s doing isn’t working, and how you have better ideas.
Putin’s Puppet
If the Russian president could design a candidate to undermine American interests—and advance his own—he’d look a lot like Donald Trump.
Over the past decade, Russia has boosted right-wing populists across Europe. It loaned money to Marine Le Pen in France,well-documented transfusions of cash to keep her presidential campaign alive. Such largesse also wended its way to the former Italian premier Silvio Berlusconi, who profited “personally and handsomely” from Russian energy deals, as an American ambassador to Rome once put it. (Berlusconi also shared a 240-year-old bottle of Crimean wine with Putin and apparently makes ample use of a bed gifted to him by the Russian president.)
.. “At least he’s a leader.” And not just any old head of state: “I will tell you that, in terms of leadership, he’s getting an A.”
.. Donald Trump’s interest in Russia dates back to Soviet times. In fact, there’s extraordinary footage of him shaking hands with Mikhail Gorbachev.
.. As it turns out, this Gorbachev wasn’t really the Soviet leader but an impersonator called Ronald Knapp. Trump was lavishing praise on the winner of a look-alike contest.
.. Five separate times Trump attempted Russian projects, hotels, apartments, and retail on the grandest scale. In one iteration, he promised an ice rink, a “members club,” and a spa, for “the finest residences in Moscow.” Another project he described as “the largest hotel in the world.” His gaudy style appealed to Russian nouveau riche, and he knew it. “The Russian market is attracted to me,” he once boasted.
.. Each time he traveled to Moscow for a high profile visit, he attracted press attention and his stature increased. (After one trip, he bragged about a meeting where “almost all of the oligarchs were in the room.”) This elevated profile ultimately attracted investors. Russians helped finance his projects in Toronto and SoH
.. “Russians make up a pretty disproportionate cross-section of a lot of our assets,” Trump’s son, Donald Jr., bragged. “We see a lot of money pouring in from Russia.”
.. Such mercantilist motives likely undergird Trump’s ornate praise of Putin, too. Having a friend in the Kremlin would help Trump fulfill his longtime dream of planting his name in the Moscow skyline—a dream that he pursued even as he organized his presidential campaign. “Russia is one of the hottest places in the world for investment,” he once said. “We will be in Moscow at some point.”
.. One of the important facts about Trump is his lack of creditworthiness. After his 2004 bankruptcy and his long streak of lawsuits, the big banks decided he wasn’t worth the effort. They’d rather not touch the self-proclaimed “king of debt.”
.. This sent him chasing less conventional sources of cash. BuzzFeed has shown, for instance, his efforts to woo Muammar Qaddafi as an investor. Libyan money never did materialize. It was Russian capital that fueled many of his signature projects—that helped him preserve his image as a great builder as he recovered from bankruptcy.
.. One lawsuit would later describe “Satter’s proven history of using mob-like tactics to achieve his goals.” Another would note that he threatened a Trump investor with the prospect of the electrocution of his testicles, the amputation of his leg, and his corpse residing in the trunk of Sater’s car... What was Trump thinking entering into business with partners like these? It’s a question he has tried to banish by downplaying his ties to Bayrock and minimizing Sater’s sins. (“He got into trouble because he got into a barroom fight which a lot of people do,” Trump once said in a deposition.) But he didn’t just partner with Bayrock; the company embedded with him. Sater worked in Trump Tower; his business card described him as a “Senior Advisor to Donald Trump.”.. Trump described the scope of their ambitions: “[T]his was going to be Trump International Hotel and Tower Moscow, Kiev, Istanbul, etc., Poland, Warsaw.”.. Kriss alleged a primary source of funding for Trump’s big projects: “Month after month for two years, in fact whenever Bayrock ran out of cash, Bayrock Holdings would magically show up with a wire from ‘somewhere’ just large enough to keep the company going.” According to Kriss, these large payments would come from sources in Russia and Kazakhstan that hoped to hide their cash. Another source of Bayrock funding was a now-defunct Icelandic investment fund called the FL Group, a magnet for Russian investors.. These projects are simply too ambitious, too central to his prospects, for Trump to have ignored the underlying source of financing. And it was at just the moment he came to depend heavily on shadowy investment from Russia that his praise for Putin kicked into high gear.In 2007, he told Larry King, “Look at Putin—what he’s doing with Russia—I mean, you know, what’s going on over there. I mean this guy has done—whether you like him or don’t like him—he’s doing a great job.”.. Eighteen months after he departed government, he journeyed to Moscow and sat two chairs away from Putin at the 10thanniversary gala celebrating Russia Today. In Politico, an anonymous Obama official harshly criticized Flynn: “It’s not usually to America’s benefit when our intelligence officers—current or former—seek refuge in Moscow.”