How Wealthy Americans Are Already Trying To Game Trump"s Tax Bill

Earlier this month, Trump touted the idea that, under his tax plan, 1,000"s of Americans would be able to "file their taxes on a single, little beautiful sheet of paper."  Of course, this so-called "postcard" that Trump and Paul Ryan have referenced repeatedly over the past several months is basically nothing more than a 1040EZ shrunken down to fit on a smaller piece of paper but who are we to rain on their parade?

That said, while many Americans will enjoy an easier tax filing in 2018, or at least as easy as the 1040EZ, others, especially high-income folks living in high-tax states like New York and California, are suddenly scrambling to retain accountants to figure out how they might best game the new tax code to avoid higher rates. 

Of course, one of the key opportunities for "gaming" results from the new taxation rules for "pass-through" entities.  Unlike high-income earners filing as individuals who lost a substantial portion of their deductions, pass through entities, with the exception of certain professionals like doctors, lawyers and stockbrokers, are still eligible for a 20% deduction from their earnings.  To put that into perspective, a 20% deduction reduces Trump"s top marginal tax rate for pass-through entities to 29.6% from the 37% that will be paid by individual filers.

Not surprisingly, as CBS points out, the change has pretty much everyone suddenly plotting a post-holiday discussion with their boss to see if they can be fired and promptly re-hired as an independent contractor.

First, you convince your boss to let you quit and hire you back as a contractor after you"ve set yourself up as a sole proprietorship. Assuming you can do that and your tax treatment is better, you can offer your ex-employer the same services for less -- the company does not have to worry about giving you benefits or paying its share of your Social Security and Medicare taxes. That latter part is the iffy one for you, and the numbers would have to work out. "Do you really want to go without health care and a 401(k)?" asked online financial adviser group Betterment"s tax expert, Eric Bronnenkant.

Meanwhile, even lawyers, who are specifically excluded from the pass-through rules, could qualify by leaving their law firms and pursuing a position as an in-house counsel.

An end run works like this: A law partner, sick of the barricade to a kinder tax rate other pass-through people enjoy, moves over to be in-house counsel at an engineering firm, which is not on the ban list. "Now she"s no longer in a specified service," wrote Ari Glogower, a law professor at Ohio State University, on Vox.com. "Voila, she may qualify for the pass-through deduction."

As we pointed out earlier this week (see: Why Wall Street Is Furious At The Trump Tax Plan), for others who can"t game the pass-through system, like most of the traders earning big bucks on wall street, the best option might be to simply move from New York to a lower-taxed state like Florida or Texas.

Still others are considering a move to lower-taxed states like Florida and Texas which, as Todd Morgan, chairman of Bel Air Investment Advisors in Los Angeles notes, sounds like a great idea right to the point that you realize that actually entails uprooting your entire family and starting a whole new life in a different part of the country...something that generally doesn"t go over well with teenage kids..."If you’re already rich why would you move to another state and live a different life just to save some money on taxes?  What are you going to do with the money? Buy more clothes? Eat more food?"

Finally, the tax bill could even influence decisions on if/when people decide to get a divorce.  As Bloomberg points out, starting January 1, 2019 divorce suddenly becomes way more attractive for the recipients of alimony and punitive for payers as the payments will not longer be counted as income or allowed as a deduction.

Tax considerations are even changing for those getting a divorce.

 

Under the law, divorced taxpayers who pay alimony would no longer be able to deduct those payments from their income, and recipients of alimony would also no longer need to report the money as income. However, the provision doesn’t go into effect right away and instead applies to divorces finalized after Dec. 31, 2018. So, depending on whether you’re set to pay or receive alimony, you might want to speed up or slow down those divorce proceedings.

...which may or may not have been a clause specifically added by Melania...

"It Feels Like America Is Descending Into Chaos..."

Authored by John Podhoretz

I turned 7 in 1968, and though my memories are necessarily fuzzy, I can still sum up a queasy sense of the chaos that pervaded the year as it streamed out of the 12-inch black-and-white television in our dining room.

The president announcing he wouldn’t run for re-election. Assassinations, first of Dr. King and then of Bobby Kennedy. Urban riots showing neighborhoods burning along with nightly footage of the war in Vietnam. Massive demonstrations against the war, and Columbia, the university in my neighborhood, shut down by a sit-in.

The long, hot summer, concluding with Chicago cops clashing with protesters outside the Democratic National Convention. The year 1968 was characterized by violence at home and violence abroad, and a sense that America itself was on fire.

My son turns 7 in a month. Forty-nine years from now, will he summon up a similar feeling of chaos when he thinks back to 2017?

The first five months of the year have certainly felt like a time of political disorder in the United States, a disorder that some have welcomed as the cost of changing the country’s direction and others have found enervating and frightening. It’s been bad, but not 1968-level bad.

But then came Wednesday’s ghastly shooting spree at the congressional Republican baseball practice.

This was a planned act of political slaughter to make what appears to be an ideological point — the first such major event since the assassins’ spree that began with JFK in 1963, reached an apogee in 1968, and came to an end with the nearly successful attempt on Ronald Reagan in 1981.

Will this prove to have been a lone event? Or is it the beginning of another long, hot summer my son will remember forever — the herald of a new kind of chaos with a signature frighteningly reminiscent of 1968?

Even the fact that I can ask this question, and that I’d wager you are not immediately scoffing at it, suggests we may be at the precipice.

We all know the kindling is there. The baseball-field shooter was a consumer of far-left anti-Republican media; it would only take one consumer of media on the other side to seek to equalize the suffering to ignite a national powder keg.

I don’t want to invoke all the clichés of the past decade, but you know them all — we’re a divided nation, we’re all living in our own bubbles, we don’t even accept the same facts and we hate each other.

The problem is these clichés are largely true.

“Americans tend to belong to their political ‘tribe’ not so much because they love its ideas but rather because they despise their opponents,” David French has written in National Review.

French says we are not headed toward civil war but we appear to be heading for a divorce along red/blue, right/left lines, and that the grounds for divorce seem to be utter incompatibility.

It is certainly more pleasant to think about divorce than war, especially since there’s no chance of an actual sovereign division of the United States. But divorces can turn destructive and emotionally violent as the parties seek to take vengeance on each other rather than find a pleasant but distant way to be apart.

The fight for control of the marital assets is often less about securing them for yourself and more about denying them to the hated other. And if the fight goes on long enough, the assets themselves are frittered away entirely in the process.

The United States is in a time of great danger. It is not my son’s happy boyhood memories that are at stake. It is his future, and all of ours.

13yo Boy Sentenced to 90 Days for Not Wanting to Be With His Mom

Jackson County, OR – A thirteen-year-old Oregon boy was sentenced to 90 days for not wanting to associate or communicate with his mother. The boy claims that his mother bit his ear and that she is now denying doing so. This young man did nothing wrong, yet he has basically been incarcerated without having committed any crime whatsoever – unbelievable!

On February 1, 2017, Brian Hegler, under court order by Jackson Co. Circuit Court Judge Timothy Gerking reluctantly drove his thirteen-year-old son to New Vision Wilderness Therapy, almost 200 miles away from their home in Medford, OR. The court order stated that Brian’s son would have to attend the program which specializes in, “treating issues of adoption, trauma, anxiety and addiction,” for 90 days, or until completion.

According to witness statements, the February 1st court date was originally meant to be a brief custody hearing between Brian and his ex-wife Carla regarding Brian’s parenting time with their daughter, as Brian only has full custody of their son. With a swift change of events, after parenting time with the young girl was heard, the court then switched gears and went into another issue – Brian’s son. Brian was completely caught off guard as he didn’t have legal representation at the time, and more importantly, he was confused by the court’s actions. In an instant, his son was pulled away from his family, friends, school and sports under court order by Judge Timothy Gerking. The boy’s father and legal custodial parent was helpless. The boy was told he would be spending the next 90 days in a program that typically deals with troubled youth, some of which have drug habits.

One problem with the program is that the son doesn’t have drug habits. He wasn’t failing in school, nor was he in trouble with the law. So why would the son be forced into a program against his will, and the will of his Father? A man by the name of Scott Banderoff was part of that reason. Dr. Banderoff (Psychologist) was recommended by Family Therapist Blondine Leavitt who was hired by the boy’s mother, Carla. Banderoff met with the boy and produced a report that focused on the boy being taken from his father. Carla and Brian have been fighting in court to maintain their rights as parents since they were divorced a few years ago.

Shortly after the divorce, the boy claimed that his mother Carla had bitten his ear during a dispute. When police were contacted, Carla reportedly lied and stated she had never bitten her son. Since then, the boy has not wanted a relationship with his mother according to witnesses. To this very day, Carla has yet to admit she actually had bitten her son’s ear. So, the question remains – why is the boy being punished and stripped from everything he’s ever known? According to Psychologist Banderoff, the boy has a problem with authority, something close relatives reported as, “a blatant lie.”

Causing more concern was Dr. Banderoff’s own statements to Judge Gerking while testifying at the hearing where the boy was ordered to attend the program. Although Dr. Banderoff never testified regarding the boy’s concerns about his mother Carla biting him, Dr. Banderoff was able to tell the judge that he’s, “…not an expert on (parental) alienation,” which is one of the allegations against the boy’s father becuase the boy doesn’t want to see his mother until she confesses. Dr. Banderoff also stated, “I’m not following (son’s) school performance closely,” which caused greater concern for the boy’s father. Brian stated, “Why would a judge take my son from me – out of my custody, and remove him in the middle of a school year when he’s been gradually doing better, not worse?” Furthermore, the real reason for taking the boy was because of a flawed relationship with his mother Carla, not an authority problem according to witnesses.

A strong allegation against Dr. Banderoff’s recommendation for the boy to attend Wilderness Therapy was reported by one witness who stated, “he (Bandoroff) is biased and likely has a financial connection to the program.”

During testimony, Dr. Banderoff stated, “I’m obviously biased, I’ve spent over thirty years in wilderness therapy…” Dr. Banderoff claimed he was previously the clinical director for a wilderness therapy program. Continuing, Banderoff said, “These programs aren’t inexpensive. Although this is one of the more reasonably priced programs… If every kid would go to a wilderness program, we’d have a much better world – unless you’re gonna have to pay for it, then you’d have that to lose (laughing). I think they’re $450.00 a day. I would think (the son) would need closer to 90 days… would be my prediction.”

Not only was the boy placed in a “therapy” jail against his will, and his Father’s, there is likely to be an enormous bill due that any normal parent would likely not be able to afford – all ordered by Judge Gerking.

In the last few weeks, it was reported that the boy had medical issues while confined to the program. His father Brian reportedly suffers from Raynaud’s disease, which is also likely what his son is suffering from. Raynaud’s (ray-NOHZ) disease causes some areas of your body — such as your fingers and toes — to feel numb and cold in response to cold temperatures or stress. Worried about his son being outdoors in Bend, OR. during extreme cold temperatures, combined with him potentially having Raynaud’s, Brian reportedly contacted the boy’s doctor and inquired further. It was stated that the boy’s primary doctor wanted to examine him. Out of concern for his son, Brian drove the nearly 400 mile round trip attempting to bring his son home so that he could get the medical attention he deserves, with a doctor that Brian trusts – his son’s primary doctor.

Brian was told his son was fine when he finally made contact, but he wasn’t allowed to see his son, or provided with any medical documents to ensure him that his son was okay. Instead, Brian was sent home. His concerns for his son’s health were essentially written off when Brian received a letter in the mail just a few days after his return home. The letter, written by Judge Gerking stated that a psychologist and counselor from the program had advised him that his son is exhibiting “neurological symptoms suggestive of Raynaud’s Syndrome which they felt could be treated locally in Bend, if necessary…” The judge also stated that he was told Brian was, “not entirely cooperative in the Program; and (Brian) has made statements that he wants/intends to remove (his son) from the Program.”

The problem with Judge Gerking’s letter is that he was reportedly deceived by the Wilderness Therapy representatives. Is seeking medical treatment for your child considered, “not entirely cooperative?” Brian was being cooperative. Brian was simply worried about his son’s health and voiced his concern, only to be met with opposition by someone who doesn’t even have a child of their own (counselor at the program). Brian was told he could not take his own son to see the Dr. of his choice – again, the boy’s own doctor.

Judge Gerking finished his letter by stating, “Until further order of the court, (your son) shall remain in the Program…”

This entire mess has caused deep concerns for the boy’s family about his wellbeing. It was reported that all of this was caused by the boy’s own mother, Carla. Brian’s son is deeply upset with Carla according to witnesses and his being confined to a program that he didn’t need will only cause a deeper disconnect in their relationship, according to one relative.

As of today, the young boy is still confined to the Wilderness Program. If the court does not intervene and allow him to be seen by his own doctor, then his stay at the program could be indefinite according Judge Gerking. One thing is certain, once the 90 days is up, there will be a bill for over $40,000.00! Several witnesses have stated that the boy’s mother, Cala Hegler, could put a stop to this if she wanted to.

Editor’s Note: What was simply a custody dispute has turned into a destructive act against a child. If this boy can be imprisoned like this without having committed a crime, any of us can. We are currently preparing an in-depth article on this case, based on two months of investigating and surveillance.