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Issue #1799      October 18, 2017

Culture & Life

Graft, corruption and business opportunities

For many bourgeois politicians, government is merely an extension of business, an opportunity to use public funds to make private profits. Tony Abbott and Malcolm Turnbull certainly fall into this group, but the pollie who most embodies the phenomenon is US President Donald Trump.

A real estate developer, Trump ran for President partly because it would add colossal value to his various resorts. He was also not unmindful of the other benefits that would accrue to his pocket from being President. He has blatantly pushed members of his family forward, brushing aside criticism that he is using the Presidency to feather his own nest. After all, that’s what people in business do all the time and government is just another branch of business, isn’t it?

Someone who clearly agrees with him on that is the man he appointed as Health and Human Services Secretary: Dr Tom Price. In the words of Abby Zimet in Politico, Price’s “unethical history is so replete with corruption and assaults on the vulnerable he earned his own comic-book, Out of the Ooze.”

Zimet reports that among Price’s other atrocities, he has “conspired with Big Pharma on insider stock trading” and supported allowing hospitals to turn away Medicaid and Medicare patients (i.e. poor people) who couldn’t afford the co-payment fee. He is also opposed to a long list of progressive social measures including regulating tobacco, prohibiting discrimination against LGBTQ people, and expanding children’s health care. But that’s not all: he also opposes funding treatment for AIDS, malaria, mental health and addiction and, most recently, he proposed slashing Medicaid by $880 billion while arguing that it wouldn’t cut benefits!

Not surprisingly, he doesn’t think the Trump administration needs to spend money on health care for poor people and has proposed cutting the budget for his own department by a whopping 18 percent. And this guy was Trump’s choice for Secretary for Health and Human Services? How cynical must you be to appoint someone like that to such a post? How contemptuous of the actual purpose of government?

Prior to his appointment, Price had vowed to cut “wasteful government spending”, a mantra for right-wing politicians who believe people should have to pay for all government services, like any other “commodity”. Just the other week, he spent $60,000 taking private jets on several short trips, including a half-hour, $25,000 jaunt from Washington to Philadelphia. Zimet notes that “to get the 100 or so miles from DC to Philly, he could have taken a commercial flight for under $500. He could have taken one of four Amtrak trains for $72. Or a car for $50 in gas and tolls. Or a bus for $30. He didn’t.”

Price had previously condemned Democrat politicians for taking private jets, labelling it as “fiscal irresponsibility run amok”. But when the opportunity arose to put the boot on the other foot, he did not hesitate. Zimet again: “We think he didn’t because he ... epitomises the mindless, boundless entitlement that he and his Trumpian cronies carry with them like a disease.”

But if you think Price is milking the system, what about his boss, Trump himself? Trump has a tax plan before Congress at the moment that “eliminates two taxes that mostly benefit the wealthy, and cuts a third tax roughly in half. That,” says Bob Lord, a veteran tax lawyer and former congressional candidate, from Phoenix, Arizona, “would bestow a windfall worth billions on the Trump family.

“First, there’s the elimination of the alternative minimum tax, or AMT. The AMT applies to taxpayers whose income tax liability otherwise would be reduced excessively by certain deductions, including deductions commonly claimed by real estate owners like Trump. ...

“Had Trump’s tax plan been in effect in 2005, it would’ve saved him that $31 million. Still, that’s chump change in comparison to the tax windfall he hopes to bestow upon himself by cutting the top tax rate on the bulk of his income by more than half, from nearly 40 percent to 15.

“We’re not talking about the corporate tax rate here. Trump could reap a tidy personal benefit from slashing the corporate income tax too, but the far bigger prize in his plan is its treatment of income from businesses that don’t pay corporate taxes.

“Under current law, the income of those businesses is taxed to their owners at individual income tax rates. Under Trump’s plan, income from those businesses would receive preferential tax treatment, with a maximum tax rate of 15 percent. That would be the final act in turning our nation’s tax policy on its head.

“In 1980, before Ronald Reagan’s election, the maximum rate on workers’ wages – earned income – was less than the maximum rate applicable to all other types of income except long-term capital gains.

“Under Trump’s tax plan, the maximum tax rate workers’ pay, after accounting for employment taxes, will be higher than the rate applicable to any other type of income.

“That means no matter how Trump invests his billions – in real estate, bonds, stocks, business ventures, etc – the income he generates would be taxed at a rate lower than what workers pay on their wages.

“Trump’s preferential rate for business income is unprecedented. Is it a coincidence that the first politician to propose it just happens to be a real estate magnate with interests in literally hundreds of unincorporated businesses? ...

“Trump’s plan would eliminate [estate] tax, no matter how large the estate. For Trump, that would mean as much as $1.4 billion on an estate estimated by Forbes at $3.5 billion.”

And the bottom line? Here’s Lord again: “If Trump’s tax plan passes, he’ll have secured for himself billions in tax benefits in less than a year as president. Not bad work if you can get it, huh?”

No wonder politicians like Trump think government is just another business opportunity.

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