Trump dodged taxes while inheriting the equivalent of $413 M in today's dollars

[tinselwolverine]

Well, seems like I've read that most financial professionals can't keep up with indexes either, so I'm a bit skeptical that that's the right crowd to get your perspective from anyway. We're talking about the reason Trump is supposed to be so great he should lead our nation, why shouldn't he greatly exceed the DJIA?

https://www.youtube.com/watch?v=SGQQSH88isc

 

[Spartanmack]

Well, seems like I've read that most financial professionals can't keep up with indexes either, so I'm a bit skeptical that that's the right crowd to get your perspective from anyway. We're talking about the reason Trump is supposed to be so great he should lead our nation, why shouldn't he greatly exceed the DJIA?

Because his risk and return profiles are completely different from the DJIA. active equity managers don't generally outperform their benchmarks but it's at least appropriate to compare them to an equity based benchmark, other than the Dow which not only is just 30 stocks, it's equally weighted. The S&P and other indices are at least market cap weighted. Depending on the strategy or objective, a simple comparison to the benchmark may be enough to evaluate their performance, but managers often have mandates other than "beat the S&P" that fit investor needs which indicate their performance won't track the S&P - for example, you would expect a levered beta portfolio to outperform/underperform when the market is up/down. Low Beta mangers who approximate the S&P may actually be outperforming when you consider risk adjusted returns. Others seek to minimize tax impact. Multi-asset managers can't really be compared to an all-equity or all-fixed income benchmark, etc, etc.

The point is, it's hard enough for active liquid asset managers to be compared to a passive single asset class index. comparing Trump's business to them makes even less sense.


Edit: many active Fixed Income managers do outperform their benchmarks.

 

[sggatecl]

but-but-but...nobody has defended Trump against the actual shady things he's done.

I haven't read the piece, nor do I intend to because as I've said many times, I disliked Trump long before he ever ran for President and I've always thought he was slimy both personally and professionally. I'd still take him over Hillary though, any day because Hillary is not only slimier, she's is evil.

I would suggest however that as you read it, if you choose to, read it with a bit of skepticism given the source, try to be fair and keep in mind there is a difference between tax evasion and tax avoidance. The former is illegal, the latter is the smart thing to do.

I skimmed it, mostly because it's stuff we all knew already. Hell, he admitted as much during his campaign.

I basically was just trying to sum up this thread, myself included, with 'Who cares, they all do it." Not to insinuate people should have another reaction. He didn't break the law. Sure I think tax dodging is scummy. But that's what rich people do. They horde wealth, it's like a contest.

 

[Gulo Blue]

I skimmed it, mostly because it's stuff we all knew already. Hell, he admitted as much during his campaign.

I basically was just trying to sum up this thread, myself included, with 'Who cares, they all do it." Not to insinuate people should have another reaction. He didn't break the law. Sure I think tax dodging is scummy. But that's what rich people do. They horde wealth, it's like a contest.

New York State is looking into the allegations of this article to see if they think he broke the law.

 

[Spartanmack]

I skimmed it, mostly because it's stuff we all knew already. Hell, he admitted as much during his campaign.

I basically was just trying to sum up this thread, myself included, with 'Who cares, they all do it." Not to insinuate people should have another reaction. He didn't break the law. Sure I think tax dodging is scummy. But that's what rich people do. They horde wealth, it's like a contest.

that was directed to someone else's post, not yours. But I have no problem with anyone, at any level of wealth/income doing all they can and taking advantage of every loophole to legally avoid taxes. I definitely have problems with many of the loopholes and special exceptions/exemptions themselves but I don't fault anyone in a position to take advantage of them for doing so - unless they personally lobbied for and unduly influenced the implementation of such loopholes.

 

[Gulo Blue]

Because his risk and return profiles are completely different from the DJIA. active equity managers don't generally outperform their benchmarks but it's at least appropriate to compare them to an equity based benchmark, other than the Dow which not only is just 30 stocks, it's equally weighted. The S&P and other indices are at least market cap weighted. Depending on the strategy or objective, a simple comparison to the benchmark may be enough to evaluate their performance, but managers often have mandates other than "beat the S&P" that fit investor needs which indicate their performance won't track the S&P - for example, you would expect a levered beta portfolio to outperform/underperform when the market is up/down. Low Beta mangers who approximate the S&P may actually be outperforming when you consider risk adjusted returns. Others seek to minimize tax impact. Multi-asset managers can't really be compared to an all-equity or all-fixed income benchmark, etc, etc.

The point is, it's hard enough for active liquid asset managers to be compared to a passive single asset class index. comparing Trump's business to them makes even less sense.


Edit: many active Fixed Income managers do outperform their benchmarks.

Pick whatever comparison you like then. The article adjusts for inflation and gets to $413 M. Over that many decades, how much do you need to beat inflation by to be considered a great businessman? It's tough to say without knowing the distribution of that money over time, which is why I'd love to see a simple timeline that accounts for most of it. I don't think it's obvious that he's any good. He might be terrible. He might have more money if he'd just liquidated and handed everything over to an average manager.

 

[Spartanmack]

New York State is looking into the allegations of this article to see if they think he broke the law.

well then, there must be something there because the New York Times has no axe to grind here and would never publish anything that wasn't factual about Trump and a state run by Democrats vocally opposed to Trump wouldn't engage in any politically motivated investigation.

 

[Gulo Blue]

well then, there must be something there because the New York Times has no axe to grind here and would never publish anything that wasn't factual about Trump and a state run by Democrats vocally opposed to Trump wouldn't engage in any politically motivated investigation.

Of course nothing has been proven. But what does your gut say? Do you really think Trump has just avoided taxes and stayed within what's legal?


If you had to wager, do you think Trump has broken laws to the tune of millions of dollars?


I would go with yes.

 

[Spartanmack]

Pick whatever comparison you like then. The article adjusts for inflation and gets to $413 M. Over that many decades, how much do you need to beat inflation by to be considered a great businessman? It's tough to say without knowing the distribution of that money over time, which is why I'd love to see a simple timeline that accounts for most of it. I don't think it's obvious that he's any good. He might be terrible. He might have more money if he'd just liquidated and handed everything over to an average manager.

that's the problem, it's difficult to find a metric to measure him by because it's virtually impossible to measure the risk he took relative to any reliable metric I'm aware of. Plus we don't really know how much he's actually worth - we have a wide range of estimates from his number at the high end to amounts people who hate him estimate at the low end which I think puts the range somewhere around <$.5B to something like $5B or whatever Trump says it is. I'm sure it's not that high because I remember reading about how he calculated his net worth and he slapped some ridiculous valuation on each of his golf resorts. If he's worth $3B+, I'd say it's reasonable to say he's pretty successful considering at one point he was insolvent, like many, many extremely wealthy/successful people have been at one or more points in their careers.

If I'm following this correctly - using the $413mm (inflation adjusted) and starting point of 1976, if he's worth $3b, that's 4.61% at $4.3B is 5.47% - net of inflation. Real Estate is considered more of a defensive sector and is compared to bonds more than equities and since the 90s, there have been publicly traded REITs - if you came up w/ some type of basket of REIT stocks, treasuries and other bonds, it would be more appropriate to compare him to those. But again, you also have to factor in the fact that he went bankrupt and has come back, so he's going to have a couple of series of returns that are going to look very different than his overall return.

 

[Spartanmack]

Of course nothing has been proven. But what does your gut say? Do you really think Trump has just avoided taxes and stayed within what's legal?


If you had to wager, do you think Trump has broken laws to the tune of millions of dollars?


I would go with yes.

It's certainly possible and I wouldn't be surprised either way. I also think nothing will come of any investigation given what I've said in the past about him being in bed with a lot of dirty politicians (primarily Democrats) during those years.

I think this is another distraction that wouldn't occur if he were a Democrat, in fact I believe the very people publishing these pieces would either be dismissing it as a nothing burger and likening it to other real scandals they pretend aren't real, like Benghazi or they would be coordinating his defense with their pals at CNN, MSNBC, CBS, etc.

 

[turok]

but-but-but...nobody has defended Trump against the actual shady things he's done.

I haven't read the piece, nor do I intend to because as I've said many times, I disliked Trump long before he ever ran for President and I've always thought he was slimy both personally and professionally. I'd still take him over Hillary though, any day because Hillary is not only slimier, she's is evil.

I would suggest however that as you read it, if you choose to, read it with a bit of skepticism given the source, try to be fair and keep in mind there is a difference between tax evasion and tax avoidance. The former is illegal, the latter is the smart thing to do.

My comment had to do with Drumpfkopf's incessant tweeting and speechifying those words, not what the genpub does or doesn't believe about her. Most mature people with a shred of common sense wouldn't constantly accuse someone of being crooked after they have been investigated and interrogated as much as she has, and the fact that she is now a private citizen holding no rank or office.

 

[Gulo Blue]

While I do think Trump cheats the government and violates the intent of the emoluments clause, Forbes reported yesterday that even though Trump claimed in 2000 that if he ever ran for President, he might be the first guy to make money running, he's dropped in their rankings. A lot of that is just due to more information clearing up assumptions about his wealth and market forces that have nothing to do with him being President. But still, it doesn't support the idea that he's getting rich taking advantage of his position.


I think he's probably willing and trying where he can, but he's probably too busy to really focus on enriching himself beyond using his own hotels for everything. That might change with foreign leaders trying to offer him opportunities to get on his good side, but it doesn't appear to have happened yet. For all the talk about the emoluments clause, he appears to be going backwards.

 

[Michchamp]

Trump's entire career as a "developer" and all his subsequent fame, and therefore all the money he subsequently made licensing his name to steaks, cologne, dress shirts, etc. and other developers' projects was only possible because right as he launched his independent career, all his dads' Brooklyn political club buddies happen to get elected into citywide offices right at the same time, from Abe Beame on down.

His much ballyhooed "deals" were all only possible because of all the doors to government largesse that Fred Trump opened for him... permits were rubber-stamped, tax abatements were provided, and public funds earmarked for business development were handed over. he also jumped into bed with organized crime (mob-controlled concrete businesses poured his hotel and Trump Tower, each of which were mostly concrete constructions.

And the cherry on top was using illegal immigrant labor to build much of Trump Tower, which he was sued over (and lost) for shortchanging on wages and OT!!

ALL of this is public record. ALL of it.

He then spun these two projects into the idea that he was the biggest developer in the country, which he used against gullible people to weasel his way into a USFL franchise (the NFL didn't buy his bullshit), and a bunch of casinos that he ran into bankrtupcy by mismanaging them and misappropriating operating funds by forcing them to pay him huge bonuses, which he then blew on Trump Airlines, his yacht, Mar-a-lago, his helicopters, etc.

all those projects failed miserably, but he managed to hold on to Mar-a-lago, because Florida has the most generous bankruptcy protections on real estate in the country.

That's why so many frauds live there... they siphon off money and use it to build or buy huge McMansions there, then designate them a primary residence, which creditors can't touch. Will be great when sea level rise washes the whole state away.

 

[Gulo Blue]

Everybody knows this about Donald Trump.

Given that everybody knows this about Trump, it's screwed up that the Press Secretary is still pitching the story of the $1 million dollar loan.

 

[Michchamp]

Given that everybody knows this about Trump, it's screwed up that the Press Secretary is still pitching the story of the $1 million dollar loan.

Given that everyone knows this, it's screwed up so many voted for him, OR didn't vote for him, BUT will still get involved in heated arguments on the internet defending everything Trump says and does, and take attacks on Trump personally, and respond in kind...

 

[Sbee]

Given that everybody knows this about Trump, it's screwed up that the Press Secretary is still pitching the story of the $1 million dollar loan.

That's the issue here, there's no issue with his father passing his wealth to his children or using the tax code to your advantage. Trump tries to pass himself off as self made, which is an absolute joke. his base admires him for being wealthy, but who wouldn't be had you been given 413 million dollars in today's terms, even if that estimate is off 10x, it's still a staggering amount of money. He really doesn't deserve the credit for his wealth that he tries to take. His argument for his success was that he decided to use his dad's money to develop in Manhattan when his dad was developing in Brooklyn, such a visionary

 

[Spartanmack]

My comment had to do with Drumpfkopf's incessant tweeting and speechifying those words, not what the genpub does or doesn't believe about her. Most mature people with a shred of common sense wouldn't constantly accuse someone of being crooked after they have been investigated and interrogated as much as she has, and the fact that she is now a private citizen holding no rank or office.

i doubt that very much. also, most people who criticized hillary continue to do so because its obvious the investigations were mostly shams - for example the email scandal where it was found she did exaclty what she was suspected to have done and then the FBI clowns chose not toncharge her. she is despised because she is perhaps the most corrupt politician of all time yet because she is a member of the protected political elite, she gets a way with it. some people just have their heads in the sand.

 

[Spartanmack]

That's the issue here, there's no issue with his father passing his wealth to his children or using the tax code to your advantage. Trump tries to pass himself off as self made, which is an absolute joke. his base admires him for being wealthy, but who wouldn't be had you been given 413 million dollars in today's terms, even if that estimate is off 10x, it's still a staggering amount of money. He really doesn't deserve the credit for his wealth that he tries to take. His argument for his success was that he decided to use his dad's money to develop in Manhattan when his dad was developing in Brooklyn, such a visionary

Allan Iverson.

I'm sure there are lots of stories of inherited wealth being squandered. How many stories are there of inherited wealth being grown 3x to as much as 10x+, depending on what Trump's actual net worth is?

 

[JScottWriter]

We don't know what he is actually worth because he won't release his tax returns. He won't release his tax returns because he is either a tax cheat, not worth nearly as much as he says or borrowed money from shady places. So pick your poison.

 

[Spartanmack]

We don't know what he is actually worth because he won't release his tax returns. He won't release his tax returns because he is either a tax cheat, not worth nearly as much as he says or borrowed money from shady places. So pick your poison.

Do you report your net worth on your tax returns? As far as I know, you only report income and related deductions on your tax returns. there's a fourth reason you don't release your tax returns to the public - they contain private information that's really no one else's business.