Probably very few people remember Leona Minder Roberts Helmsley, the wealthy American who earned the nickname “queen of Mean” for her nastiness towards employees. Helmsley married into money – she joined her husband’s business running properties, and by 1983 they were billionaires. In 1988, the then-US Attorney General Rudy Giuliani indicted Leona, her husband and two others on several tax-related charges. She was eventually found guilty of three counts of tax evasion, 16 counts of filing false tax returns and other charges, but acquitted of extortion. She served just 19 months’ in jail, and died in 2007. During her trial her naked greed was thought to have alienated the jury. A former housekeeper testified that she had heard Helmsley say: “We don’t pay taxes – only the little people pay taxes.”
The issue of tax-paying has been raised again in the US, with the New York Times‘ (NYT) publication of what it says are President Donald Trump’s filings with the country’s Inland Revenue Service (IRS).
Unlike all previous US presidents since the 1970s, Donald Trump has refused to publish his tax returns. According to the NYT, President Trump paid just $750 in the year he won the presidency and $750 in his first year in the White House. The paper also said he paid no federal income tax in 11 of the 18 years the paper examined. Forbes put Trump’s net worth at $2.1 billion at the start of April.
In the US, there are seven tax brackets, ranging from 10% to 37%. The more you earn, the heavier the tax burden. Based on adjusted gross income (which includes wages, dividends, and business income, minus permitted deductions such as alimony payments) the presidential salary of $400,000 a year theoretically incurs $55,319 in federal taxes. That puts the US president in the top 1% of earners in the US.
Around 44% of US households do not pay any federal income taxes. The typical American worker earns about $44,564 a year and does not get the presidential perks of an additional expense allowance of $50,000 a year, a $100,000 non-taxable travel account and $19,000 for entertainment. Nor does the average worker get the presidential pension of some $200,000 a year.
US tax laws are generous to big real estate developers, such as Donald Trump – they can enjoy myriad loopholes and tax breaks. The President even legitimately claimed as an expense $70,000 for hair styling during his TV show The Apprentice.
The super-wealthy are not like us. According to F. Scott Fitzgerald “the very rich… are different from you and me… They think, deep in their hearts, that they are better than we are because we had to discover the compensations and refuges of life for ourselves. Even when they enter deep into our world or sink below us, they still think that they are better than we are. They are different.”
Trump’s reaction to the NYT’s revelations was the same as on previous occasions when he has been presented with difficult dilemmas: he dismissed it as “totally fake news”. During a debate with Hillary Clinton in 2016 she accused him of paying no federal tax to which he replied “that makes me smart”. It is the wrong kind of smart – devious and underhand rather than clever. It’s inequitable that the top 1% of US earners let the other 99% shoulder federal payments.
A law passed in 2018 allows a 20% deduction against income taxes for businesses whose profits are taxed at the owner’s personal income rate. They are known as “pass through” companies because their profits are “passed through” to the owner’s personal tax bucket. According to the Associated Press, Trump has owned about 500 such “pass through” companies, which has made the Trump Organization “less a single business than a grab-bag of units drawing on the fancier parts of the tax code: sole proprietorships and limited-liability partnerships.”
Trying to sort through this maze of ownerships makes the unravelling of the late media crook Robert Maxwell’s empire look like a cake-walk.
Honest, transparent and fair
According to a research paper by Natasha Sarin and the former chief economist of the World Bank and US Treasury official under President Bill Clinton, Lawrence Summers, between 2020 and 2029 the IRS will fail to collect almost $7.5 trillion in taxes due. It said (in part) that “the benefits of non-compliance accrue most to high-income earners”.
The US tax system unfairly discriminates in favour of the rich, people like President Trump, whom the New Republic has taken to calling a “venal cretin”.
Will any of this swing the vote one way or another? The TV debate between the two this week was chaotic and alarming, not least because Trump said “this is going to be a fraud like you have never seen” a pre-emptive warning shot that has become part of his campaign. If he loses on 3 November but resists leaving office the US could be a democracy in trouble – in which case gold is certain to make new record highs. The fact that Joe Biden has published on his website his federal and state tax returns for the past four years certainly implies honesty and transparency, and also a willingness to be judged and compared. Trump is avoiding the issue
Honesty, transparency and fairness are what Glint stands for. Whether the TV debates will swing the vote or are just messy theatre is an unanswerable question: probably they are about trying to persuade the 5% of voters who as yet are undecided.
The biggest danger is perhaps that whoever wins the vote there may be bloodshed. Colonel Lawrence Wilkerson, a Republican Party member and former chief of staff for the former Secretary of State, General Colin Powell, has recently* warned that America is turning into a ‘warfare state’. “We have the greatest maldistribution of wealth in America right now that we’ve ever had, worse than 1929.” Colonel Wilkerson suggests that such is the growth of the defence budget that “by 2030, we’ll have no federal dollars for anything other than the military and entitlements. That’s a very foreboding future, fiscally.”
The US is a perfect example of how the monetary system discriminates against the less wealthy. The wealthiest of us benefit by being able to buy assets such as houses and businesses by using borrowed money. The more you can borrow the more you can buy, the richer you become. People like Donald Trump are masters at benefitting from this system, borrowing huge amounts to buy golf courses and so on – while the saver who stashes a little away each month becomes poorer thanks to the steady erosion of the purchasing power of paper money, as governments flood the monetary system with ever-increasing debt and borrowed money.
Glint wants to democratise this system – anyone can participate in Glint and use gold instead of paper money, which is becoming increasingly devalued the more is sloshing around. Gold is by far, a safer and fairer form of money. In the end, it may matter less who wins the US presidency, than how the winner tackles America’s fiscal profligacy and its $27 trillion national debt.