Trump's Tax Troubles

Excepting the right-wing media, which worked very hard to bury the story, Donald Trump's taxes continued to dominate the news on Monday. Maybe the furor will eventually die down, but with 34 days to the election and more stories coming from The New York Times, maybe not.

There were lots of "takeaways" pieces on Monday, so let's start with a few of those, just to get a sense of how the narrative is unfolding.

CNN:

• Trump paid no or little federal income taxes for years
• Many of his businesses are burning huge piles of cash
• Trump Tower in New York is a major moneymaker
• Trump's D.C. hotel is not
• Selling his name has paid off enormously
• That's in large part thanks to 'The Apprentice'
• He made money from foreign deals after becoming president
• Part of his income stems from ambiguous 'consulting fees'
• The Trump Organization spans 'more than 500 entities'

Slate:

• Trump paid $750 in federal income taxes in 2016 and 2017
• Becoming a TV star gave Trump a much-needed lifeline
• Trump's lavish lifestyle is largely deducted from his taxes
• Trump pays more to foreign governments than the U.S.
• Family members are often consultants
• The presidency has been good for business
• Trump is being audited for a huge refund
• Trump has hundreds of millions in loans that could come due in a hypothetical second term

CBS News:

• Trump paid $750 in taxes in both 2016 and 2017
• A lavish lifestyle through business expenses
• Some of his best-known businesses lose millions
• Foreign visitors help support Trump properties
• He may have paid family members in "consulting fees"
• Trump's lucrative licensing revenue has dwindled
• Trump's debt load is coming due

The Hill:

• Trump paid almost nothing in personal income taxes for nearly two decades
• Business losses protected his personal gains
• Financial record at odds with Trump's boasts and disclosures
• A ton of debt—and due soon
• Trump could face serious legal consequences

The same themes appear, again and again. Namely: (1) other than Trump Tower and "The Apprentice"/Licensing, the President is an inept businessman with a long list of failures; (2) Trump pays almost no taxes—that $750 a year in both 2016 and 2017 is particularly problematic for him, since it's somehow more tangible than paying $0; (3) the President and his family appear to have a lot of exposure, from possible illegal tax dodges, to violations of the emoluments clause, to hundreds of millions in loans from mysterious lenders that are soon due.

The Biden campaign has, of course, treated the news like the manna from heaven that it is. They are already selling shirts and stickers that say "I paid more in taxes than Donald Trump." The campaign website has added a calculator that lets you figure out how much more in taxes you paid in 2017 than Donald Trump did. Team Biden has also cut a brutal new campaign ad that compares the President's tax bill to those of average folks in various middle-class and working-class professions:

Teachers paid $7,239
Firefighters paid $5,283
Nurses paid $10,216

Donald Trump paid $750 pic.twitter.com/5YE1cbYsBN

— Team Joe (Text JOE to 30330) (@TeamJoe) September 28, 2020

That's almost certainly the most effective ad of the campaign for Team Biden.

The other person who had a very pleasant day on Monday was former Trump fixer Michael Cohen, who took the opportunity to enjoy a little schadenfreude. "Donald Trump's financial records are the Rosetta stone for understanding the depth of his corruption and crimes," Cohen said. "The more it is unraveled, the more he will unravel. It's the reason he's fought so hard to keep it under wraps." Cohen also declared that Trump is scared to death that the house of cards is nearing collapse, and that he could end up in prison.

Meanwhile, quite a few folks recalled Trump's past comments about paying taxes, which take on a whole new light now that we know he basically doesn't. In 2011, he insisted that it was only fair that lower-income Americans should pay more taxes, since he pays "a lot." Trump has also targeted specific individuals, most obviously Barack Obama:

@BarackObama who wants to raise all our taxes, only pays 20.5% on $790k salary. http://t.co/bqF26mQf Do as I say not as I do.

— Donald J. Trump (@realDonaldTrump) April 13, 2012

In retrospect, obviously, a wee bit hypocritical.

Thus far, the President has had no compelling response to The New York Times' reporting. On Sunday, he called the story "fake news," while on Monday he had moved on to claiming that he actually has very little debt (dubious) and that he is entitled to take advantage of tax loopholes. That is not likely to impress folks who are paying five or ten or fifteen times as much in taxes as he is, particularly if their tax liability went up after the big 2017 tax "cut." Trump has got to find a better response, and it is his bad fortune that he probably has only about 24 hours to do it. (Z)

Debater Up!

Tonight, of course, is the first presidential debate. Given the high level of interest in this election, the fact that people are cooped up at home, and the various intrigues that are unfolding at the moment, it's possible that the tilt could draw 100 million viewers. If so, it would smash the record of 84 million set by the first Trump-Clinton matchup in 2016.

We have thought very carefully about this, and we cannot conceive of any plausible way that Donald Trump can help himself tonight. First, because opinions about him are so baked in. Second, because he's ill-prepared and going by gut instinct, he's going to do what he always does at debates and rallies and press conferences: lie, bluster, peacock, and hit Biden with nasty personal attacks. As a general rule, "more of the same," especially after four years, does not equate to "this will move the needle."

Third, and most problematic for Trump, is the 800-pound gorilla in the room: the tax returns. He is going to be put on the spot, and this is his best (and possibly only) chance to come up with an answer that will satisfy voters. If he can't do it—and thus far, he's flailed around wildly—then folks will conclude he has no answer. It may not be possible to change that narrative if 100 million people watch the President hem and haw. In the end, if Trump can leave the evening no worse off than he already is, he should be very happy, we think.

By contrast, if Joe Biden leaves the evening no better off than he already is, he should be very disappointed. Although he's been a national figure for close to 50 years, this debate will nonetheless be some viewers' introduction to Biden the person. Further, Trump has helped Biden by setting expectations for "Sleepy Joe" so low. Even an average performance will be received as a strong performance.

Biden has a number of interesting tactical decisions to make. Among them:

• Aggression: The President will certainly display his usual range of over-aggressive behaviors, from interrupting, to possibly standing over Biden, to shouting. Biden is going to have to push back, and early, but he doesn't want to overplay it and undermine his "nice guy" image.
  
  
• Fact Checking: Moderator Chris Wallace has made clear he will do no real-time fact-checking, and that his general approach will be hands off. Actually, "My job is to be as invisible as possible," were his actual words. Some of the networks broadcasting the debate are planning to do some on-screen fact-checking, but not all of them (ahem, Fox News). Biden will have to decide how much he wants to push back against Trump's falsehoods. Several of our readers have suggested that the Democratic nominee establish a cue early in the evening (like saying "There you go again" whenever there is a lie). That seems like a wise approach. Alternatively, he could bring multiple drawings of Pinocchio, with different length noses, and hold one up whenever Trump lies. Mocking Trump may get him angry and cause him to make an unforced error.
  
  
• The Taxes: Biden could bring the tax returns up early and often, or he could wait and deliver one big poke in the eye, and then hope that the President sputters. Reader G.W. in Boca Raton reminds us of what mafioso Frank Costello said when he was called before the Kefauver Committee and asked what he'd ever done for his country. "Paid my taxes," was the answer. A one-liner along those lines could be quite effective.
  
  
• Humor: People love a funny president. Look at how much humor helped Ronald Reagan, for example. Donald Trump has never had a funny line in his life, but Biden is actually pretty witty. He will and should use that to his advantage, he just needs to avoid overdoing it. Oh, and he better make sure his bon mots have been vetted by professional comedy writers, because there's little that's worse than a dead pigeon of a joke.

Unlike Trump, Biden has been prepping, and is also willing to take advice. So, he's likely to make some pretty good tactical decisions.

The debate is set to be aired by all the major networks, and will run from 9:00 p.m. to 10:30 p.m. ET. (Z)

(Almost) One Million Votes Cast

Even before the first presidential debate gets underway, nearly 1 million Americans will have registered their preference for president. The total number of ballots received, as of Monday morning, is 944,000, and by the close of business Tuesday it's expected to be closer to 990,000. That total includes over 200,000 votes that have already been cast in North Carolina and Wisconsin combined. Those are both swing states, obviously, and by all indications the early ballots favor the Democrats by a 2-to-1 margin. Every day that goes by, then, the hole that Donald Trump is in gets a little deeper. Which is also a pretty good description of his business career, as it turns out.

Meanwhile, in a bit of complementary news, a new poll from Politico/Morning Consult reveals that only 20% of voters expect to know the winner of the election on Nov. 3, while 66% think it will take longer. That's obviously good news for anyone concerned about free and fair elections, because the more people who believe a delay is normal and legitimate, the harder it will be for the Trump campaign to claim that a delayed result is proof of fraud. (Z)

Biden Picks Up More Endorsements

Joe Biden picked up an interesting melange of endorsements in the last 48 hours. To start, The Washington Post made it official that he's their pick, writing:

In order to expel the worst president of modern times, many voters might be willing to vote for almost anybody.

Fortunately, to oust President Trump in 2020, voters do not have to lower their standards. The Democratic nominee, former vice president Joe Biden, is exceptionally well-qualified, by character and experience, to meet the daunting challenges that the nation will face over the coming four years.

Of course, "WaPo endorses Biden" is not unlike "Toyota Prius has Bernie Sanders bumper sticker." The paper didn't really need to say anything for us to know which candidate they prefer. And we just can't imagine there are too many Post readers out there whose minds will be changed by confirmation of the obvious.

Potentially much more consequential is the endorsement that Biden got from wrestler and movie star Dwayne "The Rock" Johnson, who makes his second appearance on this site in four days. Johnson's endorsement is of greater significance for two reasons. First, his political allegiances were previously a bit hazy, and he's been mentioned as a possible Republican and possible Democratic presidential candidate. Second, he's awfully popular with the kiddies, some of whom might just take their lead from him.

Third, and finally, is an endorsement that is more of an anti-endorsement. Charles Wells was the Chief Justice of the Florida Supreme Court during the election of 2000. He dissented from the Court's decision to keep counting ballots, thus siding with George Bush. And when the case got to the U.S. Supreme Court, his dissent was incorporated into the majority opinion. Anyhow, he released a letter this weekend urging people to vote for Biden. "I am compelled to believe that our country, and thus our children and grandchildren, face a grave threat to keeping the kind of representative democracy that we have experienced in our life," the Judge wrote. "The only way that I can see that this threat can be eliminated is to vote for Biden. It will not be enough to just not vote for Trump. Any basis for a contested election can only really be eliminated by having the election not be close."

Who knows if any of these will actually matter? That said, if you're Biden, better to have the endorsements than to not have them. (Z)

Senate Democrats Dust Off their Bag of Parliamentary Tricks

On one hand, Senate Democrats know there is little they can do to stop the confirmation of Amy Coney Barrett to the Supreme Court, and they think they are better off with the confirmation being concluded before the election. On the other hand, Minority Leader Chuck Schumer (D-NY) & Co. also know that their base is spitting mad, and wants some sort of action. So, they are going to do what they can to deliver.

The linked article has a list of tricks they might try (as well as a pretty evil-looking picture of Schumer). For example, they might refuse to let the Senate stand in recess, or they might slow down the vote of the Senate Judiciary Committee. None of this will stop Barrett's ascent to the Court; the purpose is: (1) to poke the Republicans in the eye, thus pleasing the base, and (2) to make it harder for vulnerable Republican senators to hit the campaign trail. It's not much, but it's all that Senate Democrats have got. (Z)

House Democrats Unveil New COVID-19 Relief Bill

There are many vulnerable Democrats in the House who do not want to spend the last month of the campaign explaining to voters why nothing is being done in terms of COVID-19 relief. And so, on Monday, Speaker Nancy Pelosi (D-CA) unveiled yet another bill in an effort to find a middle ground with Republicans.

The bill has $436 billion in emergency aid for state and local governments, $225 billion for schools and child care, $120 billion for the restaurant industry, another round of $1,200 stimulus checks for most Americans, the resumption of $600 expanded unemployment payments through January, and $75 billion for COVID-19 testing and tracing. It also includes $25 billion for airlines and $3 billion for aerospace contractors, which are Republican priorities.

Pelosi & Co. have been working with Sec. of the Treasury Steven Mnuchin, and thus far everyone is saying the right things, so maybe something will come of this. On the other hand, Republicans insisted on total release of COVID-19 liability for employers and Democrats said that was not happening. So, unless one side or the other moves off their position, there won't be any more aid. The House is expected to vote on the bill later this week. (Z)

COVID-19 Diaries: The Land Down Under

It is official. COVID-19 can be beat. Australia has completely contained its second outbreak of COVID-19. Even CNN took notice.

This is a very important result. It absolutely proves that in a Western nation, with something of a similar culture to the U.S. and a strong tradition of individuality and personal freedom, COVID-19 can be stopped in its tracks. Australia accomplished this trick not just once but twice. The first time, it took about a month, the second time, it took a little less than two months. The critical success factor was strong government leadership. If the U.S. had behaved as Australia did, tens of thousands of lives would have been saved and we might now be going to the movies or sporting events on the weekends rather than wishing for a vaccine.

I received a few reader responses that all touched on how we seem to be willing to accept some number of cases and deaths in the U.S., and I wanted to respond to those letters.

The nature of infectious diseases is that if R0 < 1 (like H1N1 or SARS) then the disease goes away relatively quickly on its own. If R0 is a little above 1 (like the seasonal flu) then the disease spreads until something (like warmer weather) gets involved that drops R0 under 1. If R0 is significantly greater than one (meaning each person infects more than one other person), like COVID-19, then the disease should progress unchecked until most of the population is infected and herd immunity kicks in.

Of course, this was not what happened. Instead, COVID-19 progressed through the U.S. largely unchecked until the end of March. Then the U.S. "shut down" and started social distancing. R0 became less than one in areas where social distancing was practiced. This led to a slow decline of new cases through the middle of June.

This was not the result of a national movement towards social distancing. Instead, this was very serious social distancing in the early states (New York, New Jersey, Massachusetts) while the rest of the states largely stayed the course. Because most of the cases at the time were concentrated in the Eastern states, the early growth in the rest of the country was not obvious just by looking at the national trend.

In nearly every state (including the early infected Eastern states) there was a huge spike that caused people to take COVID seriously, but not seriously enough to actually stop it. Even in New York and New Jersey, we ultimately settled into an equilibrium of hundreds of new cases a day. Here's where things stand right now in the 10 states that have the most new cases per day:

State	New Cases/Day	Comments
Texas	4,000	Recently stable
California	3,500	Recently stable
Florida	2,800	Stable for 1 month
Illinois	1,800	Stable for 1 month
Georgia	1,600	Recently stable
Alabama	900	Recently stable
New York	800	Stable for 3 months
Oklahoma	800	Currently increasing
Minnesota	800	Currently increasing
New Jersey	400	Stable for 3 months, but currently increasing

I thought about dividing the new cases/day by the population, but I suspect that the raw number rather than the percentage of the population getting COVID-19 may be more important in driving the psychology of the pandemic response. Once the number of new cases per day reaches "thousands" in the local press, that is a big enough number to get people's attention.

What we seem to see in the U.S. is a similar, general response to COVID-19 in each state. In our polarized political environment, there are some who take COVID-19 very seriously, as well as some number of deniers, but on average they balance out:

1. When there are few cases locally: "It is not in my state. There is nothing to worry about."
2. When there are lot of cases: "COVID-19 is here, and we have to start taking this seriously."
3. When the case count goes down significantly: "We are doing better now. We can start relaxing now. We can't stay locked down forever."

Now that we have Australia as a comparison, it is clear that the endless progression of new cases is not inevitable. It exists only because we are not willing to do what it takes to totally stop the spread.

COVID-19 is a very infectious disease. Serious social distancing reduces the R0 to a number below 1 and brings the outbreak under control. Impatience with the lockdowns and social distancing measures pushes the R0 back up to about 1 or above. The U.S. population adjusts its behavior so that it reaches a stable equilibrium in each region.

The factors that influence behaviors that affect the spread of COVID-19 are:

1. Leadership from the government
2. Lockdown rules imposed by the government
3. Personal perception of risk

Of course, 1 and 2 both greatly influence 3, which ultimately is what governs our behavior. This sums up why Australia succeeded in controlling COVID-19 while the U.S. has failed. The lack of leadership and the conservative position to undermine social distancing and safe behavior has killed thousands of Americans.

Australia was hit hard in March (this is exactly the same time as the U.S. was getting hit in the Eastern States). Australian officials responded and the first wave was over by May 1. The U.S. argued about whether this was all a Democratic hoax and then let the disease run throughout the population. There is now no place in the U.S. where COVID is not present. The Australian death rate is roughly 5% of the U.S. death rate. If we had treated this pandemic like Australia, perhaps 95% of the U.S. deaths might have been avoided. (PD)

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Dr. Paul Dorsey, Ph.D., works in medical software, providing software to support medical practices and hospitals nationwide.

Today's Presidential Polls

With just over a month to go, Pennsylvania sure looks like it's slipping away from Donald Trump, while his must-have states of North Carolina and Texas remain in toss-up territory. (Z)

State	Biden	Trump	Start	End	Pollster
Illinois	53%	40%	Sep 23	Sep 26	Victory Research
North Carolina	46%	45%	Sep 18	Sep 22	Meredith Coll.
Nevada	46%	41%	Sep 10	Sep 25	U. of Nevada
Pennsylvania	49%	40%	Sep 25	Sep 27	Siena Coll.
Pennsylvania	54%	45%	Sep 21	Sep 26	Langer Research
Texas	48%	48%	Sep 25	Sep 26	PPP

Today's Senate Polls

Jason Lewis is clearly going to come up short on Election Day. Meanwhile, the polls of North Carolina all have Cal Cunningham leading, the only question is by how much. Tillis hasn't led in a poll since June, and he's never gotten a poll where his lead was outside the margin of error. (Z)

State	Democrat	D %	Republican	R %	Start	End	Pollster
Minnesota	Tina Smith*	49%	Jason Lewis	41%	Sep 21	Sep 23	Mason Dixon
North Carolina	Cal Cunningham	43%	Thom Tillis*	42%	Sep 18	Sep 22	Meredith Coll.

* Denotes incumbent

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