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Democratic US House might open some windows

If, as anticipated, the Democrats gain control of the U.S. House of Representatives, that body’s tax writing Ways and Means Committee — frequently known as “the powerful” Ways and Means Committee — may want to start the new year with hearings on how it’s possible to take tax deductions for expensive properties you didn’t even pay for.  

Should you find this activity hard to believe, I refer you to The New York Sunday Times story earlier this month on Trump son-in-law Jared Kushner’s “entirely legal” method of getting tax deductions for some really big items he mostly paid for with other people’s money — like high–rise buildings in Manhattan.  

This is accomplished by legally claiming depreciation for properties that actually increase in value — properties Kushner and many others pay for with small amounts of cash and large mortgages and bank loans. It allowed Kushner, for example, to earn $1.7 million from investments and salary in 2015, only to have that income offset by $8.3 million in paper, not real, losses for depreciation of properties. 

These tax deductions, common for developers like Kushner and his father-in-law, resulted in Kushner paying no income taxes in the recent past and a suspicion that his father-in-law, aka the president of the United States, enjoyed a similar benefit.

That Times story and the paper’s massive investigation of President Trump’s fraudulent financial activities since inheriting the equivalent of $413 million from his father’s real estate empire, did not get the attention they deserved.

Here’s the lead paragraph of the story the Times considered significant enough to reprint in a 12-page Sunday section Oct. 7 after running it as a front page lead story in September:

“President Trump participated in dubious tax schemes during the 1990s, including instances of outright fraud, that greatly increased the fortune he received from his parents, an investigation by The New York Times has found.”

The Times went on to offer details that would have sunk a normal presidency in normal times.

But at a time when news consumers are distracted by competing media as never before, when attention spans are limited to “Breaking News” items, this was too hard for the public to digest. That doesn’t mean it shouldn’t be subject to further investigation. A public hearing would be most enlightening and could even lead to legislative reform.

The House could also look at the president’s failure to divest himself of his and his family’s business interests in possible violation of the Constitution’s emoluments clause. An emolument is a salary, payment, fee, allowance or honorarium. The clause prevents the acceptance of “any present, Emolument, Office, or any Title, of any kind whatever, from any King, Prince or foreign state.”

With Kings and Princes of one foreign state currently in the news for murdering a Washington Post columnist while engaging in defense contracting with the United States and maybe private business with the nation’s head of state and his relatives, that quaint, old word is suddenly in vogue again.  

These investigations could require the president and his family to supply helpful information on present and past business dealings with the kings and princes of Saudi Arabia and the successors of the czars of Russia, to cite two random examples.

Just last week, the Times pointed out that the Democrats, “eying control of a powerful tax writing committee next year, are studying a century-old provision in the tax code that could give them access to President Trump’s long-sought tax returns and eventually the ability to make them public.”

That’s Section 6102 of the tax code, which dates to Congress’s investigation of the Teapot Dome Scandal, involving bribes paid to officials of the Harding administration to obtain leases of oil rich federal lands.  Section 6102 allows the Ways and Means Committee to ask the Treasury Department to provide tax returns and related information on any filer.  No exceptions.

There were also indications the next Congress might take a look at the president’s effort to block the FBI’s plan to move to the Washington suburbs and replace its obsolete building with a major commercial development, including a hotel that would compete with a nearby Trump-owned property.

“It is Congress’s duty under the Constitution to make sure President Trump is serving the interests of the American people rather than his own bottom line,” said Rep. Elijah Cummings.  

Cummings would chair the “powerful” House Oversight Committee in a new, Democratic House.  Interesting times ahead.

 

Simsbury resident Dick Ahles is a retired journalist. Email him at rahles1@outlook.com.