The Money Chronicles, Volume 15. The Trump Chronicles, Volume 86: Let's Look at Tax Brackets

In my last post I spoke about President Trump’s promise to reform taxes by closing loopholes and make filing your taxes easier, perhaps even on a postcard.

But that part of tax reform matters only to those taxpayers who itemize. If you file a tax return you have the choice of taking the standard deduction or itemizing. Here’s my layman’s explanation: Your employer is required to send you a W2 form that shows how much money they paid you the previous year. That’s your gross income. You now have to choose whether to take the standard deduction or itemize your deductions.

Currently the standard deduction is $6,350 if you are married but filing separately from your spouse. It’s $12,700 if you and your spouse file jointly. If you’re single and head of your household it’s $9,350. You deduct this number from your gross income and it becomes a taxable income. According to the Tax Foundation, 68.5% of filers do this.

But if you’re in the early years of an expensive mortgage, if you donate lots of money to charities, or if you’re eligible for some of the countless other deductions, you may want to itemize. If these deductions total more than your standard deduction it makes sense to itemize. From the Tax Foundation 30.1% of taxpayers do this. OK, if you’re doing the math that leaves 1.6%. Those are taxpayers who don’t make enough money to pay anything in taxes.

This brings us to the end of part 1: determining your taxable income. Part 2 determines how much tax we pay on this income. But what percentage do we pay? When the government began collecting income taxes in 1913 it was determined that the wealthy would pay a higher percentage of their income than poor people: they created tax brackets. They specifically did not institute a flat tax (where everyone would pay the same percentage of income), arguing that those with higher incomes could afford to pay a higher percentage than those with lower incomes. From time to time politicians suggest a flat tax and I wrote about it in 2011.

Currently we have 7 tax brackets, and those in the highest bracket (39.6%) report a taxable income of $418,400 or higher. President Trump proposes only 3 brackets, and lowers the highest rate from 39.6% to 35%. And yet he claims this won’t benefit him or the rest of the 1%.

Simply put, it’s not true. In my last post I argued that his promise to close loopholes won’t happen and in this post I’m claiming that lowering the tax rate for the wealthiest will benefit only themselves.

More later.

The Trump Chronicles, Volume 85. The Money Chronicles, Volume 14: Let's Look At Tax Reform

While on the campaign trail President Trump spoke often about the need for tax reform. He promised lower our taxes.

From our earliest days we Americans have yearned for tax relief. Benjamin Franklin (1706-1790) is widely believed to claim that the only things we can’t avoid are death and taxes.

As a hospice chaplain I tell you how hard we try to avoid both. I’m not normally a fan of the “good old days” but there was a time when many Americans saw paying taxes as a form of patriotism. You can see a funny Donald Duck video from 1943 that tied taxes into support for World War II.

But the IRS 1040 form from 1943 was only 4 pages long. In fairness, the 1040 from 2016 is only 2 pages long, but the instruction book for the 1040 is 106 pages long. Clearly paying taxes has become much more complicated.

Republicans promise to reduce our tax returns to a postcard. But here’s the thing: it’s already easy if you don’t care how much you pay. Filing taxes requires to do two things: finding the difference between gross income and taxable income, and finding out how much we owe based on our taxable income.

Most of us (myself included) hire someone to do our taxes (and if you live in San Diego I strongly recommend Mark Young). But we need to hire someone to find the difference between gross income and taxable income. We can deduct from our gross income the money we spend on charitable donations, interest on home loans, and countless other things. Simply put, the government uses deductions to encourage certain behaviors. The government wants us to donate money, purchase homes, etc, and they encourage us to do these things by giving us a tax break.

But if you don’t care about this, all you need to do is declare your gross income as your taxable income. If you do this, all you need to do is look on a simple table to see how much you owe and pay it. This would take less than a minute.

And when politicians promise to “close loopholes” they are promising to eliminate deductions and make your gross income closer to your taxable income. But every loophole has a lobbyist whose salary depends on keeping that same deduction. Do you want to eliminate the home mortgage interest deduction? Good luck. You’ve declared war on the National Association of Realtors. Do you happily donate money to your local charity? Good luck. Expect pushback from your church, the Salvation Army, the Red Cross, the San Diego Blood Bank, and well, you get the point.

In fairness President Trump has promised to keep deductions for mortgage interest rates and charities. But look over your last tax return and see how many deductions you were able to take. If the only difference between your gross income and taxable income came from these two places, how much more is there? Are you willing to lose those deductions?

I don’t think so and I don’t think President Trump can pull this off.

There’s much more to this and I’ll be writing more. Stay tuned.

The Trump Chronicles, Volume 84: Can Someone Teach This Guy How to Lead?

Let’s begin with the obvious: leadership is difficult. Leading others requires abilities to inspire, encourage, persuade, cajole, and well, you get the point. Our nation was built on the belief that our leaders govern with the consent of the governed.

Since 1776 much of the world has chosen democracy over the absolute rule of dictatorship (by a King or Queen, or a military leader, some other absolute ruler). Dictators ruled without needing to care about those they ruled and didn’t need leadership skills. If you doubt this, you need look only as far as North Korea.

We now find ourselves with a President who simply does not know how to lead. I’ve spoken about this several times before, but a good leader commands respect while a poor leader craves approval.

This has created havoc in our nation in so many ways. Let me focus on a few:

  • On August 17th President Trump claimed that some of the White Nationalists were very fine people. He clearly sought the approval of those who came to Charlottesville to “Unite the Right.” And it worked: Former KKK member David Duke praised the President.
  • As a Democrat I applaud this, but on September 6th President Trump met with leaders of Congress over the issue of raising the debt ceiling for three months. Republican leadership came to this Oval Office meeting insisting that the debt ceiling be raised until after the 2018 elections. They gasped when the President pulled the rug out from under them and sided with the Democratic leadership. This came less than a month after Senate Majority Leader Mitch McConnell (R-KY) suggested Mr. Trump had “excessive expectations” about the ability of the Senate to repeal and replace Obamacare. In other words, if craving Mr. McConnell’s approval didn’t work, he would crave the approval of Senator Chuck Schumer (D-NY) and Congresswoman Nancy Pelosi (D-CA).
  • Finally, and most strikingly, he has shifted his views on President Obama’s executive order protecting the Dreamers several times. They are people who were brought here from other nations as children. They grew up as Americans, went to our schools, and thought of themselves as Americans. Many of them speak only English. From the day President Trump announced his candidacy he described Mexicans as rapists and murderers. When asked about these dreamers he has said many things. Two weeks ago he ordered his Attorney General to announce the end of DACA. But on the same day he announced that he has great love for Dreamers. He’s craving the approval of both sides and thinks that mixed messages will make this happen.

In the midst of all this, many of us Americans find ourselves perplexed over how he is leading us. Simply put, he isn’t. He doesn’t want to. He doesn’t want us to respect his leadership, he wants us to approve of him. On June 12th we learned just how much.

OK, I’ve been wrong in all of my predictions of President Trump. As I write this he has 1146 days left in his term but I can’t imagine he’ll finish his term. One of his most faithful supporters, Ann Coulter now demands his impeachment. Breitbart, one of President Trump’s most vocal supporters, now posts videos of previous supporters burning “Making American Great Again

Many of us look at the investigation of Russian meddling and think this may end with his impeachment and removal from office. But I don’t think he will be impeached or convicted because I believe that his need for approval will force him to resign before the investigation ends. Sometime in the next six months he will declare that he was never given a chance and that “nobody was treated worse than me.” He will attempt to make the case that “everyone was against me” and nobody could have done this job.

Speaking only for myself I’ll celebrate his surrender. He never treated the Presidential election as a mandate to lead all of us. Instead he treated his office as a reality television show that he led. Now he’s found he has a hard job and he expects us to sympathize.

He was born into a wealthy family and was given more than most of us. The fact that he turned a small fortune into a large fortune doesn’t make me think of him as a leader. It makes me look at him as a toddler who craves approval.

The Trump Chronicles, Volume 83: Saving DACA Helps All of Us

For well over 100 years we’ve struggled with immigration. Beginning in the 1850s large numbers of citizens from China came to our shores, many to help construct the transcontinental railroad which was completed in 1869. But many Americans of European descent looked on these immigrants with suspicion and in 1882 President Chester A. Arthur (1829-1886) he signed the Chinese Exclusion Act. It made Chinese immigration nearly impossible. In fairness it also excluded “paupers, criminals, and lunatics.”

In 1924 the United States first began to restrict immigration by placing quotas on the number of people from each country can come here. I have no desire to wade into the complexities of our immigration system, but suffice it to say that more people want to come here than legally can.

And we continue to struggle to create a policy that respects our laws while at the same time recognizes that we are a nation of immigrants. Our pride for the Statue of Liberty shows this.

Our complicated history of “we are a nation of immigrants” vs. “we don’t trust people who don’t look like us” frames our frustration today.

And in the middle of this debate we find a group of young men and women we call “Dreamers.” They were brought to the United States as children. Their parents came here without going through the process of immigrating; simply put, they snuck in. But they did this because the process of legal immigration made legal entry essentially impossible.

However you feel about the adults, clearly their children cannot be held as lawbreakers. They came here and enrolled in school. By and large they did well and think of themselves as Americans; many speak only English and if deported they have no place to go.

In 2012 President Barack Obama ordered that they be protected and allowed to stay. As long as they came here before their 16th birthday, stayed in school, and did not break any laws, they could stay here and work legally. He called this order DACA or the Deferred Action for Childhood Arrivals.

But here’s where it gets even more complicated: President Trump promised on the campaign trail to end the DACA program but also, on other occasions appeared to support the Dreamers.

He’s never been known for his consistency but here he’s playing with the lives of real people. Last week he announced he would decide tomorrow, September 5th.

As I write this, it appears he will delay ending it by six months in the hopes that Congress will create legislation that will protect the dreamers. I imagine this gives the dreamers no relief as Congress appears to show no more compassion or maturity than the President.

Simply put, protecting the Dreamers benefits them, but also benefits us. Their conviction rate is 0% and they are educated. In other words, they are exactly what we are looking for. We gain nothing by deporting them because their parents came here to make a better lives for them.

The Trump Chronicles, Volume 82: Your Pardon of Joe Arpaio Cements Your Racist Views

Last week we learned that President Trump pardoned former Maricopa County Sheriff Joe Arpaio.

Sheriff Arpaio is certainly a colorful character. He was sheriff of Arizona’s Maricopa County from 1993 to 2017. While in office he became a fierce critic of the undocumented. He encouraged his officers to “profile” Latinos, arguing that checking their legal status protected the people of Maricopa county.

In 2011 the Department of Justice found that the Sheriff’s office created “a pervasive culture of discriminatory bias against Latinos.” In 2012 the Department of Justice filed a lawsuit. The next year a federal court found that Sheriff Arpaio violated the Constitutional rights of Latinos and created a pervasive culture of discriminatory bias against Latinos. Sheriff Arpaio was ordered to stop profiling Latinos.

He didn’t. In 2016 the same court ordered Sheriff Arpaio be prosecuted for contempt of court. He was convicted last month and was awaiting sentencing.

That is, until last week when President Trump pardoned him. Mr. Trump has the power to do this. In Article II, Section 2 states that the President has “the Power to grant Reprieves and Pardons for Offences [sic] against the United States, except in Cases of Impeachment.”

No one argues the ability of Mr. Trump to do this, but we do argue his wisdom. Sheriff Arpaio clearly acted in contempt of federal court and since he was pardoned before sentencing he will forever avoid punishment for his contempt.

For his part, Mr. Trump fell on back on a word that he often uses and the rest of us find juvenile: “unfair.” He claimed that Mr. Arpaio was prosecuted for “doing his job.”

In our history we’ve seen other controversial pardons. In 1974 President Ford pardoned former President Richard Nixon shortly after President Nixon’s resignation. Nixon resigned because he faced impeachment for his role in covering up the 1972 break in at the Watergate. Mr. Ford’s pardon created a great deal of anger (and many feel it cost him re-election in 1976) but he felt our nation would suffer greatly from a public trial of a former President. Frankly, I agreed with him then and agree with him now.

But the pardon of Mr. Arpaio carries none of the concern for our nation or our future. This pardon clearly signals that our current President uses his power not for patriotic reasons, but to settle scores. Mr. Arpaio’s fondness for Mr. Trump is well known.

Only 1166 days left until the next election.

The Trump Chronicles, Volume 81: We Need To Stop Thinking of President Trump as a Republican

In a previous post I suggested that Donald Trump is not a Republican but is instead a Fascist.

I don’t mean this as a judgement statement. Virtually all Republicans agree on the role of government. It should do fewer things and do them better. It should not spend (or collect) more money than it needs. It should trust that the free market knows what it’s doing and not interfere unless absolutely necessary. In other words they are optimistic about our future.

Fascists, on the other hand, care little for the Republican agenda. They are decidedly not optimistic about our future. They believe that we (and those we love) are in grave and immediate danger from people who are different from us. Even those who look like us (and most don’t) want what we have and will do anything to take it away from us.

Simply put, fascism is based on fear. And it’s based on a fear that they will steal what we have earned by hard work and give it to those people who have earned nothing.

Fascist leaders depend on their ability to continue to fan the flames of fear. Their leadership survives only if they continue to convince their supporters that I alone can fix it.

So here’s the problem: if you’re a fascist leader you need to continue to fan these fires. You can’t rest on your laurels because your only support depends on your followers’ belief that only you can protect them from immediate danger. Good news for your people means bad news for you.

In other words the fear of immediate danger matters more than anything else. It doesn’t matter if the leader ran on a platform to build a wall on our Southern border or provide affordable health care or lower taxes. For the fascist leader, only loyalty matters.

Additionally, a fascist leader needs to convince his followers to ignore evidence that does not advance his message. It doesn’t matter how he does it. He can claim that “they” conspire to lie to “us.” Or he can claim the banner of “fake news.” Or he can claim that only he can be believed. It’s a little like the guy whose wife catches him in the arms of his lover; he responds by telling her: “Who are you going to believe? Me or your lying eyes?”

By now you have to know that I’m describing President Trump. Believe your eyes.

The Justice Chronicles, Volume 29: Do We Need to Revisit the Limits of Free Speech in the Age of Twitter?

We Americans revere few things more than Freedom of Speech. We are told in the First Amendment of our Constitution that “Congress shall make no law …abridging the freedom of speech.”

Alas, it’s a right that’s little understood. It means you cannot be arrested for what you say. But it’s often misinterpreted to mean you can say whatever you want without consequences. Here’s my favorite example: in 2010 the popular radio advice hostess Laura Schlessinger came under criticism for her use of the “N word” on her show. When an African American caller (in an interracial marriage) objected to her use of that word, Laura responded: “If you’re that hypersensitive about color and don’t have a sense of humor, don’t marry out of your race.” You can read about it here. After being criticized for her remarks she appeared on Larry King Live and demanded return of her “first amendment rights.” She believed that freedom of speech protected her from criticism for her words. She didn’t understand that others have the same right to express their opinions, and she was not Constitutionally protected from having her feelings hurt.

But from the beginning we’ve struggled with limits to the rights of free speech. Can you say anything? This debate goes all the way back to President Adam’s infamous Alien and Sedition Acts in 1798 which criminalized criticism of the government.

I have no desire to give an entire history of this debate, but we all look to the 1919 Supreme Court decision of Schneck v. the United States. In his majority decision Justice Oliver Wendell Holmes wrote this: “The most stringent protection of free speech would not protect a man in falsely shouting fire in a crowded theater and causing a panic.”

This make sense. You don’t have the right to speech that directly causes injury to others. But there is also legal precedent that you don’t have the right to prohibit speech that offends you. Many of us remember well the issue of flag burning. In 1989 the Supreme Court decided, in the case of Texas v. Johnson, that burning the American flag is protected speech.

But what about today? If you burn a flag across the street of a VFW hall you’re certainly going to anger the veterans gathered but we can all agree that nobody is in danger. That’s changed.

We’re all still talking about the events last week in Charlottesville but I heard a story that frightens me. The marchers were filmed by many who posted pictures on Twitter, with the hope that the marchers could be called out and recognized for their racist views.

That may be OK with many of us, but it’s not OK with Kyle Quinn. Kyle works for the University of Arkansas and committed the unforgiveable sin of looking like someone who marched in Charlottesville. In an excellent article you can see that someone saw a picture of someone who looked like Kyle and identified him as Kyle (even though Kyle was 900 miles away in Little Rock, Arkansas).

Kyle got a call from someone at the university who verified that he was in Little Rock and suggested that Kyle’s life just got more complicated. He was right.

Soon his Twitter account, email account, etc. blew up. His home address was posted and Kyle and his wife retreated to a friend’s house out of fear for their safety.

I write this because (much like those in the theater when someone shouts “fire”) Twitter, Facebook, and other social media make all of us potential victims of danger. Kyle well knows that a someone with a gun and an agenda (and his home address) may pose exactly the same danger to him as to the theater goers who are stampeded after someone yells fire.

I love freedom of speech as much as anyone. I revel in my ability to disagree with, and even lampoon, politicians I don’t agree with. But I don’t think our founders intended to protect those whose words lead directly to mobs who show up with clubs and torches. And I don’t think they intended to protect the 21st century mobs who traded in clubs and torches for Twitter accounts.

So where do we go from here? Whoever misidentified Kyle made an honest mistake, but hate groups created the environment that made this possible. The march on Charlottesville was organized by a group called Unite the Right.

Previous generations looked on groups like this as reprehensible but protected by the First Amendment. Today we need to look on them as hate groups that can no longer hide behind free speech.

The Trump Chronicles, Volume 80: You've Done It Again and We're Losing Patience

Dear Mr. President:

I don’t know how else to say this: Your responses to the events in Charlottesville stun even those of us who already believe you to be a racist.

I’ll be the first to admit that we have a complicated history of race relations and slavery. I used to live in Manassas Virginia, site of the first major battle of the Civil War. The National Park Service manages the site of both battles (the first in 1861 and the second in 1862). There is a statue of Confederate General Thomas J. (Stonewall) Jackson on the battlefield site.

And while the Civil War ended in 1865, even today we have citizens who believe the “South will rise again.” They’ve gone by many names: The Ku Klux Klan, White Supremacists, White Nationalists, etc. In 2008 and 2012 by popular and electoral votes we selected President Barack Obama as our 44th President. This so enraged your racist groups that they insisted that the United States belonged to White People. They felt that President Obama’s election betrayed who we were and what we stood for. You participated in this by advancing the false belief that President Obama wasn’t born in the United States and therefore wasn’t eligible to lead our nation. You abandoned this only when you saw an opportunity to attack Hillary Clinton by falsely accusing her of starting the birther movement.

When you began your Presidential run, these same racists embraced you and you have been loath to recognize their damage to our nation. Even after the horrific events in Charlottesville (including the deaths of Lt. H. Jay Cullen, Trooper Berke M. M. Bates, and Heather Heyer) you continue to insist that there was blame on both sides.

Your advisor Steve Bannon coined the term “alt right” as an umbrella term for these what nationalists groups. Your response? You made up the term “alt left” in a desperate attempt at creating a false equality.

Yeah, there isn’t. There are not, as you said, “very fine people on both sides.” There are no very fine people who advocate hate and violence toward people of color and Jews. And while we’re on the subject, when they chanted “Jews will not replace us!” they were talking about your daughter and son-in-law.

OK, cards on the table: I’ve never accused you of being courageous or willing to do the right thing even if it costs you. But your unwillingness to stand up to these racists amazes even me. I understand that support from thugs like David Duke and Richard Spencer make you feel better about yourself but it horrifies the rest of us. You’re already losing support from those who thought you would be good for business. Fortunately the alt right, while loud, is not large. Your decision to ignore the rest of us to fawn over then will only further diminish your popularity.

PS: You still haven’t called me.

The Trump Chronicles, Volume 79: Two Little Boys Playing With Loaded Guns

This week’s news has been dominated by the escalating and dangerous rhetoric between President Trump and North Korean Supreme Leader Kim Jong Un. It’s not been pretty.

We were at war with North Korea from 1950-1953; the war was concluded with a cease fire, not a surrender. Technically we are still at war.

In the 64 years since the cease fire North Korea has become more and more isolated from the rest of the world. At first they were closely allied with the Soviet Union and the People’s Republic of China. The dissolution of the USSR moved China into the only true ally of North Korea.

As with (let’s face it) all communist nations, North Korea faces horrific poverty. Several times they’ve refused to negotiate with the free world and accepted famine as a cost of maintaining their independence. We can’t know exactly how bad it was, but there is reason to believe that up to 2,000,000 North Korean citizens starved to death between 1993 and 1999.

Most of us have looked on this with a mixture of horror and anger. Those unlucky enough to have been born there did not deserve their fate and we recognize that their suffering resulted from the poor leadership of Kim Il Sung (1912-1994), his son Kim Jong Il (1941-2011), and his grandson Kim Jong Un (b.1983).

The Kims have always favored their fate above the people they lead, but things took a decisively bad turn in 2003 when North Korea announced it had nuclear weapons.

Presidents from Dwight Eisenhower (1890-1969) to Barack Obama have recognized that they needed to be the adult in the room. They’ve known that a little boy with a loaded gun needs to be taken seriously and they’ve looked for ways to ensure that whatever Kim led North Korea, he would be placated.

And by and large it’s worked. North Korea has rattled sabers, made threats, and generally frightened much of the rest of the world. But it hasn’t delivered on its threats.

But last November we elected another little boy. It’s generally understood that good leaders command respect while poor leaders crave affection. We’ve understood for 64 years that North Korean leaders have craved affirmation, but late last year we elected a President who does the same thing.

And while our little boy previously argued that we should negotiate with North Korea he has now decided to meet Kim’s juvenile rhetoric with juvenile rhetoric of his own.

Last Wednesday he threatened “fire and fury like the world has never seen” but didn’t explain what that meant. It’s a little like “You had better do what I want or else!” It’s never clear what “or else,” or for that matter what “fire and fury” really means.

And while Kim Jong Un’s threats make clear his targets (Guam), our little boy continues to make vague threats that nobody can interpret.

Many of us found his threats alarming and even his Secretary of State hoped to walk back his remarks.

Last December I wrote about my fear that our little boy would not be prepared for a complex international crisis. Nine months later I fear this crisis has landed.

I pray these little boys listen to the adults in the room, but I have no confidence they will.

The Trump Chronicles, Volume 78: Lies Are Not "Truthful Hyperbole"

Almost from the beginning of his campaign for President we’ve known that Donald Trump has, at best, a casual relationship with the truth. Web pages like Politifact and Snopes fact check what we hear to determine the difference between what’s true and what’s false. Politifact sorts stories in several categories, including the lowest one, “Pants on Fire”.

They’ve done heroic work even while being under attack. On September 28, 2016 conservative pundit Rush Limbaugh instructed his listeners to ignore fact checking organizations because they operate under the “guise of fairness.” I guess he sees no need for Mr. Trump to tell the truth.

This recently came into focus. On Monday, July 24th, Mr. Trump spoke to the annual Boy Scout Jamboree in West Virginia. By any measure his speech insulted the young men and their families who worked hard and saved money to attend. After promising not to talk about politics he then spoke about his greatness, complained about how he had been mistreated, and gossiped about someone he met decades ago.

When his speech faced justifiable criticism he claimed to have received a phone call from the “head” of the Boy Scouts who told him that his speech was the “greatest speech that was ever made to them.”

Except that call didn’t happen. A few days later his press secretary insisted that he didn’t lie. Instead Sarah Sanders insisted that this was a live conversation and not a phone conversation. And while a phone call can be traced, a conversation cannot. I think most of us believe this conversation never happened and he lied to make himself look better after an offensive speech.

Simply put, President Trump lies, and lies often. This goes back a long way. In 1991 he called People magazine claiming to be “John Miller” to give himself good publicity. After denying he made the call, he later admitted it.

In his ghost written book The Art of the Deal (no way I’m linking to this) he said this:

“The final key to the way I promote is bravado. I play to people’s fantasies. People may not always think big themselves, but they can still get very excited by those who do. That’s why a little hyperbole never hurts. People want to believe that something is the biggest and the greatest and the most spectacular. I call it truthful hyperbole. It’s an innocent form of exaggeration—and a very effective form of promotion.”

That may have made him a success as a real estate developer, but as President it makes him a liar. More than six months into the job I don’t think he understands that he is accountable for what he says. I don’t think he understands lying to boost his brand undercuts his credibility.

I understand that this bravado emboldens his base, but his base was dangerously small on election night and is shrinking. My fear is this: as his base declines he will respond by increasing his inflammatory rhetoric. Much like Captain Queeg in The Caine Mutiny his paranoia will only grow as fewer and fewer people find themselves willing to accept his narrative.

He may call what he does “truthful hyperbole” but the rest of us call it lying.