World’s 19th largest economy – San Francisco Bay – now qualifies for Opportunity Zone status, because its median income is “only” $117,000

It’s tax season for the peons, but while you are wondering where your money is going, a few developers and bankers are chuckling.

San Francisco Bay has been designated an official Opportunity Zone – containing areas where you can invest, make a fortune and pay no taxes – income or otherwise. The IRS describes the deal this way:

Opportunity Zones are designed to spur economic development by providing tax benefits to investors.

First, investors can defer tax on any prior gains invested in a Qualified Opportunity Fund (QOF) until the earlier of the date on which the investment in a QOF is sold or exchanged, or December 31, 2026.

… if the investor holds the investment in the Opportunity Fund for at least ten years, the investor is eligible for an increase in basis of the QOF investment equal to its fair market value on the date that the QOF investment is sold or exchanged.

In short, if you hold your investments and profits (could be billions!) for ten years or more, you pay no capital gains or any other tax during the ten years or when you sell.

Sea Cliff house, San Francisco

The goal of establishing Opportunity Zones is to get capital to struggling low-income census tracts.

So, how did the San Francisco Bay area qualify, considering its annual GDP is $748 billion, just behind the Netherlands’ $822 billion?

The answer – the Bay Area has many residents living below the poverty level of $118,000 for a family of four.

That’s correct. Not $11,800, but really, actually, $118,000.

The state decided that $100,000 average income would be the cutoff, resulting in these areas designated for the free tax ride:

The Bay has a median household income twice that of an average American, so the cutoff for creating a zone is twice as high. The richer the neighborhood, the more likely it will qualify.

Willard st., Philadelphia

Of course, this is nuts, so I decided to check out where I grew up (1918 E. Willard st., Philadelphia) and see if it made the cut.

No luck. The white house on right – the four-room row we rented – didn’t make it.

What’s behind this obvious ripoff of the taxpayers?

One answer is that Nancy Pelosi is the member of Congress representing San Francisco, and some of the world’s richest companies are headquartered in the Bay area.

These ultra-wealthy firms should be bottom-line happy, now that the government will boost their local economies, insulating rich shareholders from any extra expense.

This Bay Opportunity Zone area already has more investors than liver pills, and boasts the world’s richest firms. The following is a list of just the tech firms:

Trickle, trickle, fools we are, to trust the rich, now flush with cash, will share with us their bounty

The inlaid walnut table in the corporate boardroom held 12 on either side and two or three at each end, and the execs were all perched, prepped to pounce, when I dragged in my 2001 budget – 1015 pages of spreadsheet and other sheet.

As division CEO of a NYSE-listed publishing company with nearly a billion dollars sales, my pitch was explain how I would increase sales, restrain costs and improve the value of the newspapers I published.

What could go wrong? In the past year sales were up, but more important, the bottom line jumped from about a $200,000 loss to an $860,000 profit before taxes.

Since most of my employees were salaried – meaning they worked long hours without overtime compensation – my proposed budget included a four percent average pay increase. That four percent, I was told, was a big mistake. Continue reading “Trickle, trickle, fools we are, to trust the rich, now flush with cash, will share with us their bounty”

Lies about “repatriation” from the media and elites. Most of the targeted cash is already in U.S. banks.

Stagnant wages. Windfalls for the politically connected. A new tax plan primarily for the rich.

Just 13 years have passed since the 2004 tax repatriation holiday, which created nearly no new jobs for American workers, but was instead used almost entirely by multinationals for stock dividends and buybacks. Many corporate execs and shareholders became instantly rich from this tax holiday, while workers’ wages were stagnant.

The GOP’s new plan is more of the same for one simple reason:

That $2.6 trillion, which every politician and media pundit loves to cite as a boon to America,  cannot come back to the United states, because the vast majority of the money is already here.

This cash is invested in U.S. Treasury notes, U.S. agency securities, U.S. mortgage backed securities, or U.S. dollar-denominated corporate notes and bonds. And no corporate income tax has been levied on these trillions of dollars. Continue reading “Lies about “repatriation” from the media and elites. Most of the targeted cash is already in U.S. banks.”

Trump financials detail his vast business holdings; reducing value of studying individual tax returns

While the study of tax returns may have meaning for individuals, it has far little information than the assets and liabilities of a business. I learned this in the process of buying and selling newspaper companies in the 80s and 90s.

donald-trumps-penthouse-apartment-trump-tower-new-york-profileDonald Trump’s holdings are vast, and they are so diversified that any analysis of how each of hundreds of corporations makes a profit, would take yards of paper and millions of entries.

But Trump’s required election bid financial disclosure form shows how his empire works and could provide many hours of conjecture. Continue reading “Trump financials detail his vast business holdings; reducing value of studying individual tax returns”

Trump card is the minimum wage. My bet: he just lost any chance of winning the Republican Presidential nomination

serfIn the Middle Ages an average duke or earl’s property was about 38,000 acres, and the “little people” grew the food and paid taxes to these aristocrats of yore, and the humble were called serfs and lived like dogs to support the castles for the very few.

The present crony capitalism is different. Our aristocrats elect public officials, set prices by corporations, and there are no serfs, just the “working class.”

Today’s lords and masters also make the dukes of old look like the pikers that defended them. Donald Trump, for example, boasts about $9 billion in wealth. That wouldn’t just buy him 39,000 acres, but at $10,000 an acre, he could acquire 900,000 acres or 1,400 square miles – enough to fit all New York City’s boroughs inside – four times – and still have 200 square miles remaining for golf courses and towers. At that size, Trump’s land could hold 40 million inhabitants at NYC density.

Asked if he is in favor of raising the minimum wage this week:

trumpDONALD TRUMP: I can’t be, Neil (Cavuto). And the reason I can’t be is [that] we are a country that is being beaten on every front economically, militarily. There is nothing that we do now to win. We don’t win anymore. Our taxes are too high. I’ve come up with a tax plan that many, many people like very much. It’s going to be a tremendous plan. I think it will make our country and our economy very dynamic. But, taxes too high, wages too high, we’re not going to be able to compete against the world. I hate to say it, but we have to leave it the way it is. People have to go out, they have to work really hard and have to get into that upper stratosphere. We can not do this if we are going to compete with the rest of the world. We just can’t do it. – most recent Republican debate

Donald Trump has a mixed bag of economic solutions, many bereft of the international Continue reading “Trump card is the minimum wage. My bet: he just lost any chance of winning the Republican Presidential nomination”