Linky Friday: Once More Unto The Breach Edition

Andrew Donaldson

Born and raised in West Virginia, Andrew has since lived and traveled around the world several times over. Though frequently writing about politics out of a sense of duty and love of country, most of the time he would prefer discussions on history, culture, occasionally nerding on aviation, and his amateur foodie tendencies. He can usually be found misspelling/misusing words on Twitter @four4thefire and his food writing website Yonder and Home. Andrew is the host of Heard Tell podcast. Subscribe to Andrew's Heard Tell SubStack for free here:

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12 Responses

  1. Oscar Gordon says:

    LF5: Yes it’s bad. Yes it’s wrong. But I’ve stopped caring about it because no one pays a price for it. The DOJ was following orders, and Trump either officially had the power to tell them to do it, or he effectively did, because no one is willing or able to drag him to some kind of court over it.Report

  2. Jaybird says:

    Holy cow, that LF1 article is really good!Report

  3. CJColucci says:

    LF4: A thing can be right even if Ted Cruz supports it, and for bad reasons.Report

  4. Chip Daniels says:

    LF5 is a data point, another milestone in the decay of our democracy.

    That is, if it doesn’t result in prosecutions and convictions of key players, it will be just be another in a long list of examples of how those in power are able to act lawlessly with impunity.Report

  5. DensityDuck says:

    [LF6] you say “big guy going after little guy”, I say “closing a loophole that some unscrupulous cheaters had paid a lawyer to find for them”.Report

    • Oscar Gordon in reply to DensityDuck says:

      On the flip side, Bezos, Musk, et.al tax returns got leaked and everyone is all up in arms over their leveraging of “legal loopholes” to pay as little tax as possible, as if they are somehow the bad guys for following the tax law.Report

      • Jaybird in reply to Oscar Gordon says:

        I’m wondering if they’re going to find the leaker.

        I’m wondering if they’re going to change tax law.

        Once upon a time, the upside to being a reactionary, racist republican was that, at least, you got to keep your money.

        Once you start pushing for clout?

        Report

        • DensityDuck in reply to Jaybird says:

          On the one hand, they seem to be forgetting what happened with AT&T.

          …but on the other hand, maybe we’re forgetting what happened with Microsoft, where the government ordered it broken up but then immediately changed that to “actually you just can’t make your software interface a secret”.Report

          • Jaybird in reply to DensityDuck says:

            Well, from what I remember, we went from Microsoft bragging that their stuff was so good that they didn’t *NEED* lobbyists, to this:

            In 2020, Microsoft spent 9.46 million U.S. dollars in yearly lobbying expenses for the U.S. market. Consistently reporting annual lobbying expenses of over eight million U.S. dollars in recent years, Microsoft is one of the tech industry’s biggest spenders on lobbying.

            The new wrinkle might be that, once upon a time, it was okay to donate money to Republican politicians (and lobbyists that cater to Republican politicians) but we’re reaching a point where accountability culture is bringing social shaming to any and all of those who donate to racists, sexists, etc.Report

      • JS in reply to Oscar Gordon says:

        You’re sort of conflating a lot of things there.

        I mean, for starters, the general response seems to be “there’s something wrong with the tax law if you can be that rich and your tax burden rarely crack 3%, and for some not even crack 1%”. As in “the tax law is bad/the situation is bad”.

        The secondary one is quite a bit of unhappiness over what appears to be the most common mechanism for doing so, which is….well, it’s legal so you can’t call it tax evasion but it’s definitely not what those provisions were FOR.

        The pledged asset dodge is pretty amazing. Not for peons — you need a couple hundred million to work with, but pledging 120m in stocks for a 100m LOC of credit at an APR over under 1%? Where, unlike MY bank (which demands I make monthly payments), you can just roll the interest rate into the loan?

        Someone like Bezos can go his whole life without ever paying a penny back to the loan (in fact his line of credit would be constantly expanding) — and they do. No stocks officially change hands (so no gains), and Bezos can even deduct the interest he’s not really paying. Heck he can even still vote the stock.

        And given the step-up provisions on death, the loan can be cleared by his heirs with no gains. And then they can open up new ones.

        Or more likely, the estate can keep the loan open for the heirs. Or the bank can release any stock back to the estate that’s not necessary to close the debt (can the bank step-up the cost basis in that case? Do they have to pay taxes on pledged assets taken to close a debt? I’m pretty sure the bank doesn’t have to pay sales taxes if it seizes a house, for instance. Who pays the gains? I don’t know, but I’d say the smart money is “there are no gains”).

        I mean they’re openly marketed as a way to cash out stock without incurring gains. Risky to investors not ultra wealthy (if you’re worth 200m, the bank is probably going to be pretty sanguine about dips in the market and not immediately looking to liquidate or demand more assets. I mean you’re probably rich enough to buy the bank, and everyone involved knows the loan is decades long, not years), but practically risk free if you’re doing it for Warren Buffet. (And heck, I bet easy and cheap to insure).

        Now, I don’t know how to close that tax loophole — I mean it at it’s base it’s no different than a home equity loan, but again banks do expect you to pay those back and no ones taking out a home equity loan to avoid paying property taxes.

        Whereas this is basically….a weird sale in which the sale isn’t finalized until you die. Or perhaps a swap, in which the bank gives you cash and you give them assets, and everyone pinky-swears it’s not a sale it’s a temporary two-way loan where the bank charges the minimal APR for it to technically be a loan.

        All that to say, I see very little “they’re bad people” and a lot of “I cannot believe you can be that rich and pay that low an effective tax rate, something is CLEARLY wrong and needs to be fixed”.

        Which I happen to very much agree with. Especially as I’m paying a much higher effective rate, and I don’t own 20 houses, two jets, and 500m dollar yacht.

        Which means my taxes are higher so theirs can be…3.4%. Jesus.Report

        • Oscar Gordon in reply to JS says:

          It comes back to the whole equality under the law. You and I take every deduction and credit we can so we can pay the absolute minimum amount of taxes, so it’s legally acceptable for people like Bezos to do it.

          Should they be able to do the kinds of things you mention to avoid taxes? Not sure. Why was such a thing permitted in the first place? Are we up against a Chesterton’s Fence, and there is a perfectly good reason to allow such a thing? Or is it simply a political gift to the wealthy?

          Yes, they could pay more, but I object to carving out special rules for them just to force the issue. I’d much rather look at how they avoided the taxes and see if there isn’t a broader change that needs to be made to the tax code.Report