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File, Deduct, Hide: Six Essential Stories About Taxes

A seasonal "Statue of Liberty" waver for Liberty Tax walks down the streets of Janesville, Wisconsin. (Anthony Wahl / The Janesville Gazette via AP)

Today is Day 85 of the Trump Administration, and like a sailor condemned to four years at sea we carry on, stooped and weary from the weight of this albatross around our necks—Donald Trump’s taxes.

We know they exist—but what does their existence even mean any more? We’ve seen a few pages here and there, sent as proof of life to the New York Times and waved around by Rachel Maddow. In a bid to bring attention to President Trump’s noteworthy silence on his financial position, a tax march will take place on April 15 worldwide in response to a single tweet by a Vermont law professor.

Taxes are at once no one’s business and everyone’s business. We all pay them: how we pay them, what they are used for, what we want them to be used for, and what the government would rather do with them instead, is the Great American Story.

1. “Tax Time” (Jill Lepore, The New Yorker, November 2012)

Lepore takes the long view on taxes with a history of how the U.S. decided to levy an income tax. It’s easy to dismiss taxes, she argues, and much harder to defend them. But that’s not a problem our ancestors shared—despite opposition to King George’s levy on goods like tea, the founding fathers had no problem squeezing the rich with large indirect taxes for market exchanges such as imports. More than a century later, the constitutional amendment that made income tax the law of the land wasn’t even an issue in Congress. But taxes have since become a bone of endless contention, especially as they concern how much rich and poor should pay. Lepore weaves a deft story to tell us exactly why.

Taxes dominate domestic politics. They didn’t always. Since the nineteen-seventies, almost all of that talk has been about cuts, which ought to be surprising, because more than ninety per cent of Americans receive social or economic security benefits from the federal government. Americans, though, find it easier to see what they pay than what they get—not because they aren’t paying attention but because the case for taxation is so seldom made.

2. “Too Rich to Live?” (Laura Saunders and Mary Pilon, The Wall Street Journal, July 2010)

One of the most hotly contested forms of taxation is the estate tax, when a dead person’s estate is transferred to another person. Though the idea is thousands of years old and the American permutation has been around in some form or another for a century, the tax was gradually phased out starting in 2001. But when it came back in 2011—the product of impermanent legislation—the rich who stood to lose the most from the transfer of their substantial assets bucked.

It didn’t matter; the tax became permanent in 2013. But when Saunders and Pilon interviewed dying people and their potential heirs on the eve of the tax’s return, they found a strange phenomenon—people who make life-or-death decisions about their health and end-of-life care based on the potential of saving their heirs money on taxes.

In 2009, more than a few dying people struggled to live into 2010 in hopes of preserving assets for their heirs. Clara Laub, a widow who helped her husband build a Fresno, Calif., grape farm from 20 acres into more than 900 acres worth several million dollars, was diagnosed with advanced cancer in October, 2009. Her daughter Debbie Jacobsen, who helps run the farm, says her mother struggled to live past December and died on New Year’s morning: “She made my son promise to tell her the date and time every day, even if we wouldn’t,” Mrs. Jacobsen says.

In New York the lapsing tax spawned a major family conflict, according to one attorney. As a wealthy patriarch lay dying at the end of the year, it became clear that under the terms of the will his children would receive more if he died in 2010, while his wife (not the children’s mother) stood to benefit if he died in 2009. The wife then filed a “do not resuscitate” order and the children challenged it. The patriarch lived a few days into 2010, but his estate, like Mrs. Laub’s, remains unsettled given the legislative uncertainty.

3. “The Throwaways” (Melissa Chadburn, The Rumpus, January 2012)

Taxes are a matter of life and death not just to the wealthy, but to the people who need tax-funded social services to survive. Chadburn, who endured horrific abuse and a traumatic stint in foster care, considers what taxes mean to the people she calls “the throwaways,” those who depend on the small sums of money that anti-taxation advocates fight not to have to pay. As disparities between poor and rich grow, she argues, taxation can be seen as a revolutionary lifesaving act, a statement about the very worth of the people it helps.

Strangely, it was for dreams like these—the simplest dreams of rest, of feeling, of safety—that I first began to look at taxes. Taxes are the tool that makes these dreams of ours possible. Shelter for everyone, food for everyone, taxes ensure public safety. And what about love? Love is given and received. Love is not a solitary act. Love requires people to commune with one another.

My previous associations with taxes were shame and guilt and trickery. Then I looked at my history with money and public funding in general. Some people have argued that we are a nation of self-interested people. People who only care about themselves. Their own well-being.

I disagree. I think we are better than that but have been assaulted by the overwhelming personification of Greed….It’s our first lesson in pain.

4. “Tax Hero” (Planet Money, NPR, March 2017)

Despite the stakes of taxation, the act of filing taxes can be unbearably mundane. But there’s a darker side to doing taxes—the poor pay a disproportionate amount to tax preparation firms that gouge them on relatively simple filings. Enter Joseph Bankman, a Stanford tax law professor who thought he’d figured out a simpler way. But as Planet Money reveals, simpler isn’t always better for those who benefit from the current, complex system. His fight for painless filing became a legislative battle—and his opponents were a strange coalition of their own.

5. “Mossack Fonseca: Inside the Firm That Helps the Super-Rich Hide Their Money” (Luke Harding, The Guardian, April 2016)

While your average Joe struggles to pay the tax preparers, there’s a shadowy world of ultra-wealthy corporations and individuals who’ll do anything they can to not pay taxes at all. Last year, the lid on one of these complex tax-avoidance schemes blew open when 11.5 million documents—now known as the Panama Papers—were leaked, revealing inside information on over 200,000 offshore shell corporations that exist to help the one percent sidestep their tax obligations.

The Guardian won a Pulitzer for their groundbreaking investigation of the Panama Papers (Here’s a breakdown of how they got the scoop—and an in-depth podcast that tells the entire sordid story behind their award-winning investigation.) One of their most fascinating stories was about Mossack Fonseca, the Panamanian law firm that helped the rich find tax-friendly parking places for their cash. Harding tells the story of a company that’s part financial services provider, part peddler of international intrigue—one that’s marketed directly to Americans with money to hide.

Mossack Fonseca’s leaked emails reveal the extraordinary measures that some of its well-heeled clients took to keep their financial affairs secret. Especially the Europeans and Americans, who have latterly found themselves under scrutiny from their own governments.

One theme that emerges is anxiety. Wealthy individuals with “undeclared” offshore bank accounts are afraid they might get rumbled.

Another theme is victimhood. The super-rich, it appears, feel they are being unfairly picked on—persecuted even.

6. “Donald Trump Tax Records Show He Could Have Avoided Taxes for Nearly Two Decades, The Times Found” (David Barstow, Susanne Craig, Russ Buettner, and Megan Twohey, The New York Times, October 2016)

What happens when a tax evader is not an average citizen but the President of the United States? Of course, the answer is “we don’t know yet,” because we have no idea what’s in Donald Trump’s personal tax returns. Despite Rachel Maddow’s overhyped scoop on a few pages from Trump’s 2005 return, nobody’s been able to get ahold of what could be the most sought-after documents in modern history. And thus, we don’t know what wealth the President has to brag about—or hide.

After receiving several pages from Trump’s 1995 returns from an anonymous source, Barstow, Craig, Buettner, and Twohey hypothesized that back when he was a mere real estate mogul, the president used a $916 million business loss to cancel out his tax debt for decades. Is it true? Until Trump comes forward with his tax returns, there’s no way to know. But journalists won’t stop piecing the story together—and if the tax march is any indication, citizens won’t stop insisting that he tell the truth about his financial situation.

But the most important revelation from the 1995 tax documents is just how much Mr. Trump may have benefited from a tax provision that is particularly prized by America’s dynastic families, which, like the Trumps, hold their wealth inside byzantine networks of partnerships, limited liability companies and S corporations.

The provision, known as net operating loss, or N.O.L., allows a dizzying array of deductions, business expenses, real estate depreciation, losses from the sale of business assets and even operating losses to flow from the balance sheets of those partnerships, limited liability companies and S corporations onto the personal tax returns of men like Mr. Trump. In turn, those losses can be used to cancel out an equivalent amount of taxable income from, say, book royalties or branding deals.

 

The Elements of Bureaucratic Style

A United Airlines jets sits at the gate at Denver International Airport. (AP Photo/David Boe)

Colin Dickey | Longreads | April 2017 | 12 minutes | 3000 words

On Monday night, Oscar Munoz, the CEO of United Airlines, sent an internal email to his staff regarding the incident on Flight 3411 in which members of Chicago Aviation Security forcibly removed a customer who refused to give up his seat when asked. In the note, Munoz offered an explanation of events and a defense of both his employees and law enforcement. The email ended up on Twitter where its contents were roundly excoriated.

Munoz’s email is, in its own way, a work of art; a triumph of the willingness to pass the buck. It misstates objective facts and shifts responsibility onto the passenger, David Dao, who ended up bloody and dazed after the encounter.

As you will read, the situation was unfortunately compounded when one of the passengers was politely asked to deplane refused and it became necessary to contact Chicago Aviation Officers to help.

What struck me as I read the email is how a careful and consistent use of syntax, grammar, and diction is marshaled to make a series of points both subtle and unsubtle. On Twitter, I referred to it as a “master class in the use of the passive voice to avoid responsibility,” and followed with a few tweets that highlighted its use of language to shift the blame on to the victim.

Read more…

The High-Water Mark: The Battle of Gettysburg, the Jersey Shore, and the Death of My Father

Dane A. Wisher | Longreads | April 2017 | 36 minutes (10,142 words)

 

2013

* * *

“What kind of commie bullshit is that?”

“I’m telling you, listen to the album again.” I jam my finger into the bar top for emphasis.

“I don’t need to. It’s called Born in the USA. It’s about good, honest American people. You’re defiling a New Jersey hero.”

“It is about America. But the flag and blue jeans on the cover, the upbeat sound on the title track—it’s all ironic.”

“Here we go. It’s ironic.

“It’s the definition of irony. Apparent surface meaning conveying the opposite of the actual underlying intent of the message. The album is about how people can’t catch a break, how hollow all the patriotic fanfare is.” My speech sounds less pompous in my head.

“This is just like your thing with Forrest Gump.”

I roll my eyes. Forrest Gump has become his latest culture war litmus test. Still, it’s good to see my brother. I’ve been teaching in Qatar for two years and he works odd hours as a cop at the Monmouth County Prison and so the nights when we can shoot the shit are rare. When we do, we eat a lot and drink a lot and tell a lot of stupid jokes and get a sick enjoyment out of fighting with each other. Read more…

The Immigration-Obsessed, Polarized, Garbage-Fire Election of 1800

John Adams and Thomas Jefferson. Images via Wikimedia Commons

A. Roger Ekirch | American Sanctuary: Mutiny, Martyrdom, and National Identity in the Age of Revolution | Pantheon | February 2017 | 33 minutes (8,149 words) 

Below is an excerpt from American Sanctuary, by A. Roger Ekirch.

For background, it is important to know that a seaman named Jonathan Robbins participated in a mutiny on the HMS Hermione in 1797, the bloodiest mutiny in British naval history. Afterward, he joined the American navy, but he was eventually recognized and jailed. To justify his actions, Robbins claimed he was an American citizen who had been impressed—that is, captured and forced into servitude—by the British navy. However, his American citizenship was disputed. The British sought his extradition, which the president, the Federalist John Adams, granted—an action which had disastrous political consequences for his party. Robbins was found guilty by a British naval court and hanged from the yardarm of the HMS Acasta in 1799.

This story is recommended by Longreads contributing editor Dana Snitzky. Read more…

Voices from the Last Days of Obamacare: A Reading List

Photo: AP Images

Repeal and replace: Republican candidates used these three words throughout the election cycle almost as an incantation. There was no other option for dealing with Public Enemy #1: Obamacare. When President Trump took office they became a battle cry for Republicans intent on undoing his predecessor’s signature legislation.

But what would repeal and replace look like? Last week, the House Republicans unveiled draft legislation to replace the Affordable Care Act, seven years in the making. The American Health Care Act shares part of the old plan’s name, but not many of its current features. Everything from the insurance mandate to Medicaid expansion is missing from the new plan, and leaders from both sides are unhappy with the half-baked results. Read more…

Alexandra Petri Is The Only Op-Ed Columnist America Needs Right Now

Alexandra Petri

Hamilton Nolan at Deadspin destroyed the entire New York Times opinion page this week after the paper published a limp musing by Frank Bruni on Trump’s well-done steaks. (“When did we turn into such food snobs here in America, land of the free and home of the Bloomin’ Onion?”) Nolan concludes that more than 80 percent of Times columnists aren’t equipped to properly respond to the sheer brokenness of America. I won’t quibble over who Nolan likes and dislikes, as this is not just a problem with the New York Times. I spend many mornings screaming at my radio while NPR tries to lull me back into business as usual with its warm and soothing commuter-friendly tones. I don’t want All Things Considered, I want Some Things Rejected Outright. Read more…

Drug Addicted and Autistic: A More Common Combination Than You Think

Photo by Kaushik Narasimhan (CC BY-SA 2.0)

Addicted and autistic? At Spectrum, Maia Szalavitz explores the unexpected biological and psychological commonalities of addiction and autism, and some new science that suggests that combination may be more common than you think.

Shane Stoner’s addiction began in 2008. He lost a factory job, his parents divorced, his father died — and then a relative introduced him to heroin. “I felt like heroin gave me confidence,” Stoner says. “I could get out of bed in the morning and do the day. No matter what happened, it made me feel like it was going to be all right.” It erased his constant anxiety.

Stoner, now 44, eventually entered detox in 2013 after he was arrested for stealing copper from an abandoned house. It was obvious at that point that he was addicted to heroin. But it would take several more years for him to get the diagnosis that truly helped him understand himself: autism.

The new label came as a relief. It explained Stoner’s sensitivity to things such as tags on his T-shirts, and his succession of obsessive interests. It clarified why he had such a difficult time fitting in as a child, his problems with roommates in college — and why he continued to struggle with social connections as an adult. “I can’t believe nobody ever mentioned it before, because I started thinking back and there’s pictures of me, like, 3 years old, and I’m honestly flapping my hands.”

Read the story

The Ban, the Wall: Bearing Witness

Rose Marie Ascencio-Escobar's husband was detained when he went to check in with the Immigration and Customs Enforcement on Feb 22. Her husband has been in the United States since 2001 when he came from San Salvador without documents. (Marie D. De Jesus /Houston Chronicle via AP)

Reports say there is going to be another travel ban soon, perhaps even today. And so, standing on the precipice of our next great catastrophe, I have decided to take stock, as far as I can, of this thing we have wrought, which I can only describe as the new American carnage. Moreover (sorry about this) I would like to put forth my own obnoxious “all else is a distraction” theory:

In my opinion, this is the greatest story of the moment, and all else is a distraction. Think-piece-ologists have recently argued that the “real story” is the dismantling of our administrative state, or the lock-out of the free press from the halls of power, or the Russian oligarchy’s new influence on the Republican party, or so on. But, when the people of the future look back at us now, it seems to me that they will “little note, nor long remember” the exact form of our bureaucracy, or whether we took seriously our own promises to ourselves about freedom of the press, or whether Michael Flynn was actually colluding with the Russian ambassador rather than just wishing him a very very merry Christmas. These things will all be seen as incidental: goings-on as curious and inconsequential as Rudolf Hess in a biplane or Marat in a bathtub. I submit that, for the people of the future, all these stories will be incidental to the story of why we allowed our neighbors to be terrorized and rounded up.

So, I am making a small attempt to bear witness.

I am asking six questions.

Who has been detained?
Who has been denied entry?
Who has been rounded up?
Who has been deported?
Who has fled as a refugee from my country?
Who has been killed here? Read more…

How Long Does Barry Jenkins Have to Keep Hanging Out with Damien Chazelle?

Moonlight‘s surprise win on Sunday night was a shared-stage moment, a tantalizing suggestion that we were perhaps living in an alternate timeline. “Did the Oscars just prove that we are living in a computer simulation?” asks Adam Gopnik at The New Yorker, only half as a joke. “Since the advance of intelligence seems like the one constant among living things—and since living things are far likelier than not to be spread around the universe—then one of the things that smart living things will do is make simulations of other universes in which to run experiments.” Read more…

Follow the Oil Trail and You’ll Find the Girls

Photo property of Union of B.C. Indian Chiefs.

Riayn Spaero | Longreads | March 2017 | 14 minutes (2,400 words)

 

Duluth, Minnesota was dank and barren. Ice and mounted snow covered Lake Superior, save for scattered pools of howling waves. I picked this time because the ships weren’t in and wouldn’t be for several weeks. It was, for the moment, safe to stand by that great lake and speak on the silent affliction it routinely ushers to Duluth’s shores—the very same affliction that will spread across four states and infect each Dakota Access Pipeline construction site. I was there to meet Sarah Curtiss, an esteemed Anishinaabe activist at Men As Peacemakers, who’d agreed to an on-camera interview to discuss the predatory violence on this lake and other locations throughout Indian Country, such as oil fields and pipeline camps, that threaten the lives and bodies of Indigenous women on a daily basis. She wasn’t my first documentary interview on this subject, yet my hair raised in anticipation of absorbing more horrific accounts and the immense responsibility of honoring her every word.

Curtiss shook my hand and sighed. Her exhale eased my nerves. “You wouldn’t believe some of the questions I’ve been asked,” she said. “I once had this woman, a reporter, say ‘Are you sure? Are you sure you’re Indian?’”

Curtiss is astute, so I would not put it past her to pop this icebreaker as a litmus quiz for non-people of color documentarians (or journalists), but for me that morning it was an invitation to an honest interview built on trust in our convergent, but different, American experiences as “other.” Her last name, Curtiss, her milk complexion and loose auburn curls were more Anglo than Disney’s Pocahontas, but questioning her blood quantum never crossed my mind. How could it? Being of color, I’d long resigned myself to what most American minorities from families spanning the skin color spectrum know: If one of the three race-defining elements (skin color, features, hair texture) is off stereotype, “Are you sure?” or “What else are you?” looms over every discussion with the uninitiated. But, Curtiss and I were initiated.

We met on a February morning as if we were sorority sisters from distant chapters executing an exclusive greeting in the form of her sigh that said, Thank God I don’t have to explain myself to you. It was unexpected, but I was grateful. We discussed her advocacy in the fight against the epidemic of missing, murdered, and trafficked Indigenous women plaguing North America; the crisis that led her to divulge, “I do not go a month without someone I have a personal connection to passing away.” More specifically, she spoke of her prominent role combating trafficking on Lake Superior ships that pass through Minnesota’s Duluth Port—the reason for my sojourn to the frigid Midwest.

On a 17-degree day with sharp winds blistering her hands and cheeks, Curtiss stood beside the great lake that keeps sweeping away her stolen sisters. She detailed injustices against many Native women who live unrecognized lives, invisible to all but those who mean them harm—demeaning, brutal harm—and introduced me to invisibility as a handicap, rather than a privilege of gods. Read more…