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Last week, the New York Times has published the most comprehensive look at Donald Trump's financial history ever compiled. Not only did this erase the repeated aetiological myth of the President that he had only received a $ 1 million loan from his father, Fred, which he was subsequently required to repay. with interest, he showed how the father-son team had systematically stole the tax.
Although the Time published some articles on his own 13,000-word article, here is an even more condensed version: Trump was a millionaire at the age of eight, partly because his father named him banker or owner of various construction projects. . His family also used granter-retained annuity trusts (GRATS) and a fake company called All County Building Supply & Maintenance to transfer more than $ 1 billion worth of wealth to their children. All of this should have generated a tax bill of about $ 550 million, but they paid only $ 52.2 million. (Trumps also tended to devalue or inflate the value of properties according to their needs, further reducing the little that they were paying to the government.)
The extent to which elites respect their own rules is an old story, one that may have been revealed in the most striking way in 2016, when the "Panama Papers" leaked. This wealth of documents showed how every penny in the world apparently concealed wealth in fictitious companies created by the famous law firm Mossack Fonseca, leaving the other 99% to pay a disproportionate amount of taxes. The following year, a kind of sequel came in the form of the Paradise Papers scoop, involving more than 120 politicians around the world in similar programs of quasi-legal tax evasion.
But the new Time An article, as well as the considerable number of documents on which it was based, suggested that the best way to counteract the government might not be relocation (or often legal evasion), but a series of White-headed crime (escape) and hoping that the government did not take you. Discussions with lawyers and tax experts have suggested that offshoring remains a huge and gigantic problem that governments need to control, and it is worth remembering that Trump's name was widely used in the Panama Papers. But the direct tax evasion that does not involve tropical areas is an incredible drag on the system.
"As to which problem is" bigger ", it's hard to say without further research, but in terms of the number of people involved, I think there would be more non-compliant taxpayers under the nose of "Uncle Sam is a tax haven like the Cayman Islands," says Bridget Crawford, tax specialist at Pace University Law School.
Crawford, who described herself as a "classical left liberal lawyer" with 25 years of experience advising wealthy families, said that, despite the disgust of admitting it, much of what was described in the TimeThe exhibition was relatively common for the country's elites.
"The idea of creating a partnership with your children, for example, rich families do it all the time to transfer wealth from each other," she said. "It's a bit like a simple vanilla estate for the very wealthy."
The systematic under-reporting of gifts and the invention of the All County Company, perhaps Trump's wildest revelation, is even more irritating. Crawford suggested that the Trumps are doing just fine because the IRS simply was not equipped to catch all the bad actors. The rich know it and often play it.
"Rich people often call it playing the lottery audit," she said.
This is not likely to improve sooner. With the rise of the Tea Party, the IRS has become an even more politicized entity, with traditional Republicans like Ted Cruz having called for it to be abolished. And in February, Trump appointed tax attorney Charles Rettig as head of the agency. This not-for-profit information service launched by DCReport is tantamount to "entrusting El Chapo with the direction of the DEA" because its reputation was to defend people accused of having been part of the same things as the Trump family did.
But how does the amount that the average elite saves by avoiding taxes via offshoring match what the Trump family has saved, as revealed by the Timeis history? A useful but imperfect benchmark is that, according to the IRS, in the 2008-2010 tax year, under-reporting of personal income tax represented an estimated tax gap of $ 264 billion. dollars. At the same time, the United States accounts for nearly $ 190 billion of the $ 500 billion dollars lost globally every year by multinational corporations, according to the Tax Justice Network, think tank and group analysis. defense of transparency. (The total amount of hidden wealth – legally or otherwise – by individuals and businesses abroad is estimated at billions of dollars worldwide.)
The comparison is not exactly an apple apple case, but it is clear that there is a lot of crazy behavior here.
"In fact, the United States is their own tax haven for many wealthy people," said Alex Cobham, General Manager of Tax Justice Network. "For example, the United States has one of the weakest uses of Swiss financial institutions, because it's so easy to hide your money in different states in the US And while Swiss financial institutions have to report their bank details to the US. IRS, a simple corporation The structure in Delaware or Wyoming can solve the problem for an American citizen – and with no amount of money leaving the country. "
Meanwhile, Donald Trump is like the poster of everything Brooke Harrington has been studying for a decade. The professor at Copenhagen Business School and author Capital without Borders: Wealth Management and One Percent I said that the word "relocation" may not have appeared in the The temperature history simply because it was more difficult to achieve when the control of capital made the movement of large amounts of money more complex. At Fred Trump's heyday in the '60s and' 70s, people were often not allowed to go on vacation in some places while carrying heavy money.
It was also a time when tax records were kept only on paper, making it harder for public servants to detect the behaviors that contribute to fraud. But these days, these capital controls have generally been lifted. And while the United States has been able to force the big Swiss bank UBS to reveal the fraud committed by their American customers several years ago – essentially by threatening to bankrupt them – they often can not count on credit. other countries to monitor their illegal activities.
That said, Harrington insisted that trying to separate national and international tax systems was a false dichotomy: no one is engaged in these activities thinks or acts as if the choices were "national tax evasion" or "relocation" . The two are inextricably linked, she said, as an integral part of what elites such as Donald Trump and Vladimir Putin engage as a means to obtain, maintain and hide their wealth.
"[Fraud] That's the only thing his father ever learned from his father because he did not learn the trade, she says. One day, someone will write the book on the extent of Donald Trump. international tax evasion, and it will be amazing. We did not even reach the top of this iceberg. "
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