Three Donald Trump appointees owe IRS back taxes

At least three of President Donald Trump’s political appointees are drawing taxpayer-funded paychecks while owing the Internal Revenue Service tens of thousands of dollars, a Center for Public Integrity review of federal financial disclosures reveals.

Trump’s appointment of federal debtors to his administration perpetuates a pattern that’s dogged presidential administrations — including that of President Barack Obama — for decades.

Trump himself has yet to address the issue in any meaningful way. Meanwhile, a bill aimed in part at disqualifying serious tax scofflaws from federal employment has languished since Rep. Jason Chaffetz, R-Utah, introduced it in January. (Chaffetz resigned in June.)

“The Trump administration is proving to be no different than any of the others,” said Marcus Owens, a partner at law firm Loeb & Loeb and former director of the IRS’ exempt organizations division. “For senior executives, particularly, there should be some requirement that they should stay current on their taxes.”

White House spokeswoman Natalie Strom declined to answer questions about the White House’s policies on employing people who owe the IRS money or whether Trump himself would like his appointees to retire their IRS debts.

The Trump administration officials’ IRS debts were spotted by reporters and volunteers for #CitizenSleuth, a project launched last month by the Center for Public Integrity and Reveal from the Center for Investigative Reporting. The crowd-sourced investigation is examining detailed financial disclosures from more than 400 top Trump administration officials and nominees, including nearly 190 who reported owing someone money — from student loans to mortgages to credit card debt.

The Trump appointees reporting money owed to the federal government include Justin Clark, a prominent Trump White House aide, who owes up to $50,000 in back taxes, according to disclosure records.

A financial disclosure filed by Clark, the White House director of intergovernmental affairs and a deputy assistant to the president, does not indicate he’s actively paying off his debts through an IRS-approved payment plan. In his role, Clark serves as the White House’s liaison to state, local and tribal governments.

U.S. Department of Agriculture Special Assistant Joe Alexander and White House Liaison for the Corporation for National and Community Service Deborah Cox-Roush, who each also reported owing up to $50,000 in federal taxes, indicate they are on payment plans, according to their financial disclosures.

Reached by phone, Cox-Roush explained that she didn’t withhold enough money from her income earlier this decade, and therefore, got behind on her taxes. She expects to clear her debts in full by September. The White House expressed no concerns to Cox-Roush about her tax situation, she added.

“It’s not been an issue, and I’ve done what the law has allowed me to do,” said Cox-Roush, who according to her LinkedIn resume also serves as director of the Senior Corps. Until June, she worked as a special assistant to U.S. Department of Education Secretary Betsy DeVos.

Clark earns a taxpayer-funded annual salary of $165,000, according to White House records. Alexander, whom ProPublica identified as a “GS-15” employee on the federal pay scale, would earn somewhere from $103,672 and $134,776, based on that designation.

Cox-Roush was a GS-15 employee during her stint at the Department of Education, although it’s unclear how much she earns at her new job. Clark and Alexander, as well as representatives of the Department of Agriculture, did not return requests for comment.

IRS spokesman Bruce Friedland declined to comment on the matter, citing federal privacy laws. In general, the IRS advises that “those who receive a bill from the IRS should not ignore it.”

Strom, the White House spokeswoman, emphasized that federal officials owing the IRS money is “hardly a new practice,” adding: “I’m just wondering why it’s such a big deal that these three people voluntarily disclosed that they owe the IRS money, especially when two of them are even already on a payment plan with the IRS as your records show.”

Indeed, the issue of key federal government officials owing the IRS money isn’t new and dogged the Obama administration, as well.

As for the IRS, Trump is angling to shrink it: His 2018 budget proposal calls for staffing cuts to the bureau. Trump also wants to cut the IRS’ overall budget to $9.65 billion, down from $12.1 billion six years ago and about $11.2 billion last fiscal year. (Congress has indicated it probably won’t cut IRS funding as deeply as Trump would like.)

Trump himself reported no IRS debt on a personal financial disclosure form he filed in June.

He is, however, no stranger to debt, writ large: His latest personal financial disclosures indicate he has at least $315 million of it, largely stemming from business ventures and owed to a variety of foreign and domestic creditors.

Trump, citing an ongoing audit by the IRS, has categorically refused to release his personal tax returns, bucking a practice followed by every major presidential candidate since the 1960s. The IRS itself has stated that “nothing prevents individuals from sharing their own tax information.”

Such documents would reveal Trump’s tax rate, overall tax payments and charitable giving, among other financial information not contained within standard personal financial disclosure documents.

Source: The Centre for Public Integrity.

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Trump on track to spend exorbitant amount of taxpayer dollars on travels

The Mar-a-Lago Resort in West Palm Beach, Florida on 11 February 2017. Photograph: Joe Raedle/Getty Images

The Mar-a-Lago Resort in West Palm Beach, Florida on 11 February 2017. Photograph: Joe Raedle/Getty Images

Nothing used to rile devoted Barack Obama critics like the president’s winter Hawaiian vacation. A watchdog group once calculated that the Aloha state trips cost taxpayers $3.5m a pop – in airfare, security arrangements, communications and medical staff.

Among the harshest critics of Obama’s travel was Donald Trump, then a private citizen. “President Obama’s vacation is costing taxpayers millions of dollars—-Unbelievable!” Trump tweeted in 2012. Two years later, Trump tweeted that “Obama’s motto” was: “If I don’t go on taxpayer funded vacations & constantly fundraise then the terrorists win.”

The joke, it turns out, is on Trump. Now he is the president – and it appears that he is on track to spend many more millions of taxpayer dollars on trips that might be construed as vacations for him and his family than Obama ever dreamed of. The arc of the moral universe is long, but it bends toward… Mar-a-Lago?

By one sketchy estimate, Trump and his family, in their security and travel demands, have already rung up as much in accounts payable by taxpayers as the Obama and Biden families did in eight years, a figure elsewhere calculated, by the Washington DC-based Judicial Watch, as topping $97m.

How is it possible? The complicated receipt involves weekend trips by Trump to Mar-a-Lago, his resort in Palm Beach, Florida; travel by his children and their government security details on Trump family business; and costs associated with protecting Trump’s Manhattan home, the high-rise Trump Tower building, where Trump’s wife and youngest child live but where the real estate mogul himself has not set foot since becoming president.

“When President Bush went to the ranch, it was not surrounded by an enormous city – that didn’t involve the same kind of security challenges,” Pitney said. “When President Obama went to Martha’s Vineyard, again fairly isolated, not the same kind of challenges as a highly visible location in the middle of a very crowded city.”

“This also relates to his failure to disclose his taxes,” Pitney said. “He’s the first president in 40 years who hasn’t publicly disclosed his taxes, and many people suspect that he’s employed various legal maneuvers to avoid paying taxes. If that is true, he’s imposing costs on other taxpayers that he’s not bearing himself.”

According to a $37.4m reimbursement claim filed with Congress at the time of the inauguration, New York City spends $500,000 a day protecting Trump tower, mostly in police overtime costs. A trip by Eric Trump in January to visit a condominium development in Uruguay produced a hotel bill of $97,830 for secret service and staff, the Washington Post revealed. Other expensive overseas trips the scion has taken on family business so far this year include visits to the Dominican Republic (polo grounds, hotel, golf course); Dubai (golf course); and Vancouver (hotel).

Read the complete article on The Guardian newspaper web site.

Fact-checking Donald Trump’s first presidential address to Congress

Highlights from Donald Trump’s first speech to Congress.

Jobs, taxes and business

“Since my election, Ford, Fiat Chrysler, General Motors, Sprint, Softbank, Lockheed, Wal Mart, and many others have announced they will invest billions and billions of dollars in the United States and will create tens of thousands of new American jobs.”

Some of these corporations announced jobs and investment before the election, though Ford credited the president with its decision to create 700 jobs and make a $700m investment in Michigan. General Motors had committed $2.9bn and Walmart announced an expansion before any votes were cast, on the other hand, and several companies, including Chrysler, had previously agreed to create jobs.

“Ninety-four million Americans are out of the labor force.”

This is a grossly exaggerated claim that seems to rely on the roughly 94 million civilians who are 16 or older and not in the labor force: a figure that includes retired people, high school and college students, people with a disability, etc. The unemployment rate in January was 4.8%, or about 7.5 million people who are looking for work but can’t find it.

“Over 43 million people are now living in poverty, and over 43 million Americans are on food stamps.”

Trump is correct that about 43 million Americans are classified as living in poverty, according to the Census Bureau, after a small decline last year. He is also correct about 43 million people using food stamps, according to the Supplemental Nutrition Assistance Program. That number reached as high as 47.6 million people in 2013, during the slow recovery.

“We will create massive tax relief for the middle class.”

Trump’s tax plan cuts taxes for all Americans but, by a wide margin, disproportionately helps the wealthiest Americans. According to a conservative thinktank, the Tax Foundation, his plan would save wealthy Americans millions of dollars and add $5.3tn to the national debt. Half of Trump’s tax cuts would go to the top 1% of earners, the thinktank estimates, and most families below the top 20% of earners would have income gains of less than 1%.

“We’ve lost more than one-fourth of our manufacturing jobs since Nafta was approved, and we’ve lost 60,000 factories since China joined the World Trade Organization in 2001.”

According to a study by Ball State University’s Center for Business and Economic Research, slightly more than 10% of the manufacturing jobs lost since the 1970s were due to trade deals such as Nafta. The study estimated that 88% of factory jobs lost since the 1970s were eliminated by automation.

Economists still debate the effect of Nafta on jobs. In 2015, the Congressional Research Service wrote that the “net overall effect” was “relatively modest”. “Nafta did not cause the huge job losses feared by the critics or the large economic gains predicted by supporters.” A 2012 report by the OECD found that manufacturing jobs did flee the US after the deal was signed, but also noted the broader shift toward a service economy.

Trump is correct that China has benefited from trade deals, such as the “most favored nation” status that Bill Clinton renewed for the country. But it too has started to feel the changes of robots replacing humans in the workforce.

“Right now, American companies are taxed at one of the highest rates anywhere in the world.”

The US is not even in the top 30 highest-taxed nations in the world, according to the Organization for Economic Cooperation and Development. The OECD’s most recent data ranks the US 31st of 34 industrialized nations for tax revenue as a percentage of GDP – far behind Denmark, Britain, Germany and Luxembourg. The US ranks 17th for corporate tax revenue, and 19th for tax revenue per capita.

“We have the worst financial recovery in 65 years.”

This claim is true only because the 2008 financial crisis was the worst economic collapse in American history except for the Great Depression, when people starved to death and moved constantly in search of work. In 1933 25% of all workers and 37% of all non-farm workers were out of work. After the 2008 financial crisis, the US lost 8.7m jobs – in October 2010, unemployment reached a peak of 10%. The recession itself lasted 18 months, officially.

“In the last eight years, the past Administration has put on more new debt than nearly all other Presidents combined.”

Trump mostly has this right, except that he ignores key context: Barack Obama inherited the Oval Office while the economy was in freefall, and after his predecessor had signed a huge stimulus bill. Obama continued the recovery efforts of George W Bush, with Republican support from Congress, which ultimately controls the purse strings of government.

“Our trade deficit in goods with the world last year was nearly $800bn.”

Trump has it almost correct that the trade deficit in goods alone neared $800bn; but he ignores the surplus in services, which reduces the deficit to about $502.3 bn, according to the Census Bureau. Economists say investment, something that Trump has welcomed, also contributes to a larger deficit.

Healthcare

“Obamacare is collapsing.”

The Affordable Care Act’s healthcare program does have problems, but it is not “collapsing” or in the much warned “death spiral” in which rising costs push healthy people out of the market, ever increasing fees and then pushing companies out as well. But healthcare premiums are increasing at varying rates around the country, on average by 22%, making an unstable market state-to-state. Rates were increasing before the law was enacted, however, and about 30 million people are enrolled in the program.

Immigration

“By finally enforcing our immigration laws, we will raise wages, help the unemployed, save billions of dollars, and make our communities safer for everyone.”

The economic benefit of Trump’s immigration plans is uncertain. The disappearance of undocumented workers could push Americans into agriculture and construction jobs over the long term, for instance, but it could also sow chaos in those industries in the short term. A fair amount of research suggests that immigration is good for the economy, and some US industries rely heavily on employees with visas (such as tech) or undocumented workers (such as agriculture).

If enacted, Trump’s plans would have also cost taxpayers billions. Trump’s promised wall would cost Americans about $21.6bn – Mexico has flatly refused to pay for it; aggressive deportation plans could cost billions more, especially if Trump greatly expands the number of federal border agents and the number of private prison contractors.

“We’ve defended the borders of other nations while leaving our own border wide open for anyone to cross and for drugs to pour in and at a now unprecedented rate.”

The US’s borders are not “wide open for anyone to cross”, with sections of wall and fencing along the southern border, 21,000 Customs and Border Patrol agents, and a recent history of aggressive deportation. Barack Obama has deported a record more than 2.5 million people, including a record 438,421 people in 2013. The US also has extremely strict vetting for visa applicants and refugees, forcing people to go through multiple rounds of interviews, background checks and medical screenings.

“Where proper vetting cannot occur … we cannot allow a beachhead of terrorism to establish itself in America.”

Trump’s suggestion that the US’s vetting methods cannot account for the systems of countries abroad has flipped the procedure of vetting on its head. The system, among the most intensive screening process in the world for refugees, relies on US agencies to vet applicants, and not those of countries abroad. Refugees must pass multiple background checks and interviews with several agencies, as well as medical checks, fingerprint and photo screenings. The process takes 18-24 months.

Foreign policy

“We’ve spent trillions and trillions of dollars overseas while our infrastructure at home has so badly crumbled.”
“America has spent approximately $6tn in the Middle East, all this while our infrastructure at home is crumbling. With this $6tn we could have rebuilt our country – twice.”

Trump does not specify what spending he’s referring to – though the wars in Afghanistan and Iraq have cost an estimated $4.79tn, according to a study by Brown University researchers.

Trump is correct that US infrastructure, in general, is in dire need of repair and reconstruction. In 2013, the American Society of Civil Engineers reported that the government needs to spend roughly $1.4 tn over the next decade, or $3.6tn by 2020, to overcome the shortfall in infrastructure funding.

Trump’s claim of $6tn is misleading: it includes estimates of future spending, including veterans care for decades in the future.

Crime

“Jamiel’s 17-year-old son was viciously murdered by an illegal immigrant gang member, who had just been released from prison.”

Trump’s anecdote suggests a link between immigrants and crime, but anecdotes about individuals do not paint an accurate picture of about 11 million people, most of whom are not violent offenders or aggravated felons.

On the contrary, presidential commissions and recent academic research has in general found no links between immigrants and crime or lower rates of crime correlated to cities with more immigrants compared to those with fewer immigrants.

“The murder rate in 2015 experienced its largest single-year increase in nearly half a century. In Chicago, more than 4,000 people were shot last year alone — and the murder rate so far this year has been even higher.”

Trump has accurately stated a statistic he often distorts. Last September, the FBI reported that murders and non-negligent manslaughter rose in the US by 10.8% in 2015, the largest single-year increase since 1971. That is not the same as saying there are more murders in the US than at any point since 1971: 15,696 murders were reported in 2015, down from 1991 high of 24,703. The murder rate declined 42% from 1993 to 2014, even though the population increased by a quarter.

Trump correctly cites Chicago’s number of shooting victims; the city has suffered a significant increase in gun violence in the last two years, though it has yet to reach the highs of the mid-1990s. This year has started even more violently than 2016 did, with at least 513 people shot so far in 2017. But fewer people have been killed compared with the same period in 2016, according to the Chicago Tribune, and police do not trust a few months’ worth of data to estimate a trend.

Also worth reading: An annotated guide to Trump’s first address to Congress.
Source for this fact-checking post: The Guardian newspaper article.

Tax comparisons; rate, number of payments, hours needed to comply

The Globe and Mail “Report On Business” magazine for this month is sitting on my desk. I love this magazine, not only for the articles but also for its style.

One item that caught my eye was a very well designed graph on page 11, under the title “The taxman cometh”, which outlines annual corporate tax rates in different countries, total number of tax payments, and the hours required to comply.

“Taxes may be inevitable, but they’re certainly not all created equal. A recent study by KPMG compared annual corporate tax rates for several countries. It didn’t take into account any tax credits or other loopholes a company may use (GE, for example, didn’t pay any taxes to Uncle Sam last year). Another study looked at the total time it takes businesses to satisfy the taxman. The amount of aggravation, however, is incalculable. ” Steve Brearton.

Tax comparison article from the gloveadvisor.com.

Other KPMG articles, all 768 as of today.