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 		 [ The costs of having a corporate Democrat chair the House Ways
and Means Committee] [https://portside.org/] 

 RICHIE NEAL AND TRUMP’S TAXES  
[https://portside.org/2019-03-16/richie-neal-and-trumps-taxes] 

 

 Jeff Hauser & Eleanor Eagan 
 March 13, 2019
The American Prospect
[https://prospect.org/article/richie-neal-and-trumps-taxes?fbclid=IwAR2cArDqCRsomRtlhQ0yzMVY9CD5RWLrnb3zTtP5mh9Wv73rWPc_oInQ4g0]


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 _ The costs of having a corporate Democrat chair the House Ways and
Means Committee _ 

 Representative Richard Neal leaves a meeting of the House Democratic
Caucus in the Capitol., Tom Williams/CQ Roll Call via AP Images 

 

As most House Democrats enthusiastically jump on the long-dormant
congressional oversight train, one senior lawmaker has conspicuously
chosen to stay on the platform. Under the leadership of
Representative Richard Neal
[https://prospect.org/article/democrats-richie-neal-problem], the
House Committee on Ways and Means has shown none of the zeal for
oversight exhibited by its counterparts.

The announcement
[https://www.nbcnews.com/politics/congress/house-democrats-prepare-effort-request-trump-tax-returns-n978246] two
weeks ago that Neal would finally request Trump’s tax returns, after
a good deal of pressure from the Democratic Caucus, might have
appeared to be a welcome reversal. But look at the fine print and
you’ll see that the committee’s strategy is basiclly a
continuation of Neal’s obstinate refusal to deliver on Democrats’
2018 campaign promises. 

Not only is Neal’s request still set for some uncertain time
[https://www.cnn.com/2019/03/05/politics/trump-tax-returns-congress-richard-neal/index.html]in
the nearish future
[https://www.bostonglobe.com/news/nation/2019/03/10/when-will-demand-trump-tax-returns-congressman-richard-neal-walks-political-tightrope-powerful-new-job/WJoATFsiPOZZDBQT4pBtUP/story.html] (approximately
two and a half or more months too late
[https://www.politico.com/magazine/story/2019/03/08/trump-tax-returns-democrats-225700]),
the request he is contemplating is wildly inadequate
[https://www.taxpolicycenter.org/taxvox/house-democrats-may-soon-ask-trumps-tax-returns-what-should-they-request]. 

That is because Neal plans to disregard tax law experts
[https://www.politico.com/story/2019/03/05/democrats-plan-to-demand-trumps-tax-returns-in-about-two-weeks-1205449] and
request only the president’s _personal _returns. 

Neal’s lame excuse is that business returns for Trump’s over 500
Limited Liability Corporations
[https://www.nbcnews.com/business/taxes/what-trump-s-disclosure-his-500-llcs-can-can-t-n874391] (LLCs)
are too complex
[https://www.nbcnews.com/politics/congress/house-democrats-prepare-effort-request-trump-tax-returns-n978246].
Neal is right that understanding Trump’s finances will be
unjustifiably arduous, but as one of the few people in the country
with the power to gather the resources and expertise to conquer this
task, surrender in the face of this complexity is a cowardly
dereliction of duty. 

Trump’s personal tax returns will show how much money he is earning
from each of his LLCs, but not how the LLCs came to possess
[https://www.taxpolicycenter.org/taxvox/house-democrats-may-soon-ask-trumps-tax-returns-what-should-they-request] that
money or what machinations the funds may have gone through before
reaching the President. Without this information, we will make little
headway in learning specifics about Trump’s conflicts of interest,
including international entanglements and alleged tax evasion. 

Failing to request the business returns not only compromises
Congressional investigations into this president, but also the
Committee’s potential oversight of society’s wealthiest tax
cheats. Neal reportedly likes to boast of his
committee’s historical significance
[https://www.bostonglobe.com/news/nation/2019/03/10/when-will-demand-trump-tax-returns-congressman-richard-neal-walks-political-tightrope-powerful-new-job/WJoATFsiPOZZDBQT4pBtUP/story.html],
and yet he is failing to seize his opportunity
[http://cepr.net/blogs/cepr-blog/the-oversight-options-available-to-the-house-ways-means-committee] to
be a part of that vaunted history by reforming the corrupt system that
created the likes of Donald Trump and those surrounding him.  

Looking back
[https://www.bostonglobe.com/news/nation/2019/03/10/when-will-demand-trump-tax-returns-congressman-richard-neal-walks-political-tightrope-powerful-new-job/WJoATFsiPOZZDBQT4pBtUP/story.html] over
Neal’s 30 unremarkable years in Congress, it appears that he has
long been more concerned with rising through the ranks than actually
accomplishing anything. For three decades Neal has quietly waited his
turn, neither making waves nor attracting national scrutiny.
Unfortunately, Democrats’ deference to seniority in committee chair
assignments can allow a low energy, risk-averse politician to rise to
power, even as it can also yield activist Chairs like Representative
Maxine Waters of the House Financial Services Committee. 

Neal has faced very few real challenges throughout his career. In the
last 4 elections—since Massachusetts lost
[https://www.wbur.org/news/2010/12/22/ma-loses-a-seat] a
congressional district and Neal began representing the state’s 1st
congressional district in the very liberal far western slice of the
state, Neal has faced
[https://ballotpedia.org/Richard_Neal#Elections] a primary challenger
twice and faced an opponent in the general election only once. 

Last year, he faced a primary opponent, Tahira Amatul-Wadud, who had
little funding and had never run for office. She managed to get 29
percent of the vote. Next time, Neal is likely to race a serious
primary challenge.

He handily outraised both primary challengers by a factor of 6
[https://www.opensecrets.org/races/candidates?cycle=2012&id=MA01&spec=N]-to-1
[https://www.opensecrets.org/members-of-congress/alsorun?cid=N00030969&cycle=2012] in
2012 and 24
[https://www.opensecrets.org/races/candidates?cycle=2018&id=MA01&spec=N]-to-1
[https://www.opensecrets.org/members-of-congress/alsorun?cid=N00042135&cycle=2018] in
2018, thanks to big hauls
[https://www.opensecrets.org/races/candidates?cycle=2012&id=MA01&spec=N] from PACs
[https://www.opensecrets.org/races/candidates?cycle=2018&id=MA01&spec=N].
Although he represents a progressive district, Neal’s fundraising
relies to a remarkable degree on corporate PAC contributions. Neal was
one of the top eight
[https://readsludge.com/2019/01/16/meet-the-most-corporate-pac-reliant-reps-in-congress/]corporate
PAC recipients in either party in the House for the 2018 election
cycle. Only a fraction of his contributions (2.1
[https://www.opensecrets.org/races/candidates?cycle=2012&id=MA01&spec=N] percent
in 2012 and 0.73
[https://www.opensecrets.org/races/candidates?cycle=2018&id=MA01&spec=N] percent
in 2018) came from small dollar donors. 

This paints a picture not of a deeply popular politician with a
committed base, but of one whose corporate fundraising prowess
successfully suppresses challengers. This is a shame, because
Trump’s tax practices cry out for a serious investigation.

While it is cheap and easy
[https://www.theatlantic.com/business/archive/2016/04/how-rich-do-you-have-to-be-for-a-shell-company-to-be-useful/477384/] to
set up an LLC, the services of those that can help you use it add up
quickly, meaning that the parallel world of accounting tricks and
loopholes is only available to those that can pay the price. Many of
the country’s wealthiest individuals pay millions
[https://www.nytimes.com/2015/12/30/business/economy/for-the-wealthiest-private-tax-system-saves-them-billions.html] of
dollars for expert advice on how to escape tens or hundreds of
millions of dollars in obligations. 

The authorities charged with punishing those that cross the line from
“aggressive tax planning
[https://www.nbcnews.com/politics/congress/house-democrats-prepare-effort-request-trump-tax-returns-n978246]”
to tax evasion simply cannot keep up. The IRS, for instance, has
decreased the rate at which it audits the country’s wealthiest
individuals by almost three quarters
[https://www.propublica.org/article/how-the-irs-was-gutted] over the
last decade. Due to the complexity of these individuals’ finances,
these audits require a tremendous outlay of time, resources, and
expertise. And yet decades of effective lobbying by some of the
richest and most shameless people and corporations have ensured that
the IRS budget is paltry compared to its needs.  

Meanwhile, that “aggressive tax planning” goes almost entirely
unscrutinized. While these tactics are currently legal, it is not
clear that they are fair, nor that they should continue to be
permissible. Consider, for instance, last year’s _New York Times_
report
[https://www.nytimes.com/interactive/2018/10/02/us/politics/donald-trump-tax-schemes-fred-trump.html] about
the Trump family’s extensive efforts to avoid inheritance taxes.
While those tactics might have seemed shocking to you or I, tax law
professor Lee-Ford Tritt told Vox
[https://www.vox.com/the-goods/2018/10/3/17934360/trump-taxes-illegal-new-york-times-expose] that
85 percent of those maneuvers would have been “a yawn for the
uber-wealthy estate planners.” 

That this type of behavior is routine for a select few, however,
should not distract from the severe consequences that it has for the
rest of our society. Between 2008 and 2010 (the last years for which
it released figures) the IRS estimated that it lost $458 billion
[http://fortune.com/2016/04/29/tax-evasion-cost/] annually to tax
evasion. It does not release estimates for how much revenue is lost to
legal, but questionable maneuvers like many of those described in _The
New York Times_ report. Based on the fact, however, that the Trump
heirs alone avoided (through mostly legal but probably also some
illegal tactics) $500 million
[https://www.nytimes.com/interactive/2018/10/02/us/politics/donald-trump-tax-schemes-fred-trump.html] dollars
in taxes in 1996 dollars (just under $800 million today), it is likely
a significant sum.

This is exactly the sort of injustice that Democrats should be
interrogating through aggressive oversight. Democrats’ win in 2018
was a repudiation of Trump, but it was also a rejection of the system
that created him. That system aggressively pursues people who dare to
claim the Earned Income Tax Credit
[https://www.propublica.org/article/earned-income-tax-credit-irs-audit-working-poor],
while turning the other cheek as the ultra-wealthy spirit millions of
dollars out of the government’s reach. 

If House Democrats are serious about fixing the system that produced
Donald Trump, they will need to understand its architecture, which
means they cannot throw up their hands in the face of its complexity.
Instead, Ways and Means should gather the tools necessary for the
task. That starts with hiring enough staff, including experts who have
the specialized knowledge needed to decode Trump’s tax returns.
Other committees have boasted of expert hires in areas such as ethics
(Norm Eisen
[https://www.politico.com/story/2019/02/12/norm-eisen-house-judiciary-committee-1165711]),
banking misconduct (Bob Roach
[https://www.bloomberg.com/news/articles/2019-02-07/wall-street-nemesis-to-join-house-panel-s-deutsche-bank-probe]),
and antitrust (Lina Khan
[https://www.thedailybeast.com/lina-khan-a-top-anti-trust-thinker-joins-democratic-staff-in-the-house-putting-silicon-valley-on-alert])
while Ways and Means has announced no such oversight-targeted
employment decisions. 

March is the month when Committee chairs go before the House
Administration
[https://firstbranchforecast.com/2019/03/11/2019-03-11/] Committee to
make the case for their budget requests for the coming two years.
Rather than bemoaning the complexity of oversight, Neal must recognize
that current resources are adequate for investigating Trump’s
returns, but not for the breadth of issues his Committee should be
overseeing. Neal should take this opportunity to obtain the funds that
his committee will need to do its broader job, because the oversight
that the American people demand starts, but does not end, with the
president’s tax returns. 

The Committee also has jurisdiction over trade policy, as well as
Medicare and Social Security.

Viewing Trump’s financial records will inevitably raise other
questions for which Ways and Means should also seek answers and begin
developing remedies.  

For example, if President Trump is guilty of tax evasion on the scale
that is alleged, why was he not caught sooner? Who else has benefited
from this weak enforcement? Minority-bound Democratic senators on the
Banking Committee have already been seeking answers to precisely these
questions, but lacking subpoena power, are unable to do more than send
a letter
[https://www.documentcloud.org/documents/5763904-March-Letter-to-IRS-About-Enforcement.html?utm_content=buffer3f179&utm_medium=social&utm_source=twitter&utm_campaign=buffer] to
the IRS questioning enforcement priorities. In contrast, Ways and
Means can, and should, force Executive Branch officials to furnish
answers to these important questions. 

By shining a light on uneven enforcement and chronic understaffing,
Ways and Means could build support for increasing the agency’s
budget. Not only would this be one of the most effective ways to
increase revenue (for each dollar in additional funding that the IRS
receives, it regains between $6 and $9
[https://www.foreffectivegov.org/node/11986]) it would also likely
enjoy bipartisan support, if not among lawmakers than among the
general populace, a majority of whom view the agency favorably
[http://www.people-press.org/2018/02/14/majorities-express-favorable-opinions-of-several-federal-agencies-including-the-fbi/]. 

Fixing enforcement, however, will only be the start. A thorough
investigation of Trump’s tax returns will also certainly make clear
that there are structural deficiencies in our laws that allow the
wealthy to consistently achieve better outcomes. Why, for example,
should income from LLCs receive a 20 percent deduction
[https://www.taxpolicycenter.org/taxvox/treasury-left-door-open-20-percent-tax-deduction-pass-through-businesses]?
Why should individuals be able to hide their identity
behind anonymous shell companies
[https://thefactcoalition.org/fact-sheet-anonymous-shell-companies-august-2017?utm_medium=policy-analysis/fact-sheets],
allowing them to violate the law without consequences?  

The Ways and Means Committee must not only investigate Trump because
he is a corrupt president, but because Trump’s celebrity make him a
worthy vehicle for highlighting the unjust and corrupt system that
created him. Failure to request the business returns demonstrates a
lack of seriousness about understanding and dismantling this rigged
system. It is not only Trump, but every rich tax evader in America who
is breathing easier with Richard Neal as Chairman.

JEFF HAUSER and ELEANOR EAGAN work at the Revolving Door Project,
where Hauser is the founder and director. 

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