DC Report

Republicans have a friend in the company that counts their votes

After initially focusing on the surprisingly lopsided results of the senatorial election in Kentucky, DCReport broadened our scope to look at the electronic vote-counting software and electronic voting systems that we rely on to tally our votes. This prompted us to raise questions about Electronic Systems & Software (ES&S), America's largest voting machine company. What we found was a revolving door between government officials and ES&S.

Voting results in three states that saw surprising majorities by vulnerable incumbent Republican senators—Maine, North Carolina and South Carolina—were almost all tabulated on ES&S machines.

Trump and his inept legal team barely have mentioned ES&S, focusing almost exclusively on Dominion Voting Systems.

Team Trump has been so vigorous in going after Dominion that it prompted us to look into how ES&S operates. What we have found so far is far from comforting.

Trump attorneys Rudy Giuliani and Sydney Powell and Fox hosts have been making such bold and naked claims against the ES&S competitors, without any substance or evidence, that Fox News, NewsMax and OAN have all been threatened with litigation unless they fully retract their claims and correct a number of egregious factual errors.

Team Trump has been so vigorous in going after Dominion that it prompted us to look into how ES&S operates. What we have found so far is far from comforting.

  • Owned by a private equity firm, ES&S has been elusive about identifying the people in its ownership.
  • A number of ES&S executives and lobbyists have ties to top GOP election officials and politicians.
  • The ES&S executive in charge of the security previously worked in the Trump administration as a government executive at Health and Human Services before leaving under a cloud.
  • Forty of the 50 states use ES&S to cast and count some of their votes.
  • Of the 25 states Trump won, all but 3 either partially or fully relied on ES&S machines. The states where Trump won that didn't use ES&S machines were Oklahoma, Louisiana and Alaska.
[caption id="attachment_21864" align="aligncenter" width="620"] Counties that used ES&S equipment in the 2020 elections. (Verified Voting)[/caption]

Concerns about the reliability of vote-counting software are not new, dating back to the 1980s. Having the ability to audit votes, and making sure ballots are counted properly, has long been a major concern of computer scientists, politicians and election officials.

In December 2019, Democratic lawmakers sought answers from those top three voting machine vendors which "facilitate voting for over 90% of all eligible voters in the United States."

Three separate letters were sent to the private equity firms who reportedly own or control each of these vendors, with very limited information available in the public domain about their operations and financial performance.

Elections at Risk

In the second letter, addressed directly to the McCarthy Group, the private equity firm that owns ES&S, lawmakers wrote, "Voting machines are reportedly falling apart across the country, as vendors neglect to innovate and improve important voting systems, putting our elections at avoidable and increased risk."

In requesting details about the ownership of ES&S, the lawmakers specifically noted, "We are particularly concerned that secretive and 'trouble-plagued companies,' owned by private equity firms and responsible for manufacturing and maintaining voting machines and other election administration equipment, 'have long skimped on security in favor of convenience,' leaving voting systems across the country 'prone to security problems'."

DCReport placed numerous calls and emails to ES&S at its headquarters on John Galt Boulevard in Omaha. Only once was the phone answered. Someone who would not put us through said, "They are not going to be able to talk to you." DCReport was directed to ES&S's website. We submitted the form repeatedly but got no reply.

Understanding the Software

Our democracy now relies on private companies, which build proprietary electronic systems, to reliably count our votes. It seems reasonable, if not crucial, to understand who is behind these companies as a standard to ensure election integrity. Without such knowledge we run the risk that zealots, investors with financial stakes in who wins elections or those susceptible to bribery have an incentive to use subtle software programming techniques to deliberately miscount votes to guarantee an outcome. In close elections, software code that invalidates or miscounts a mere sliver of ballots can change the outcome.

One of our concerns is ES&S providing junkets and gratuities to election officials, as uncovered in June 2018 by McClatchy newspapers. For at least 11 years, the voting equipment and software company curried favor with election officials by paying for trips to Las Vegas, tickets to shows and gifts.

"As many as a dozen election officials" attended a meeting in Las Vegas, with a number of them accepting airfare, lodging and meals, McClatchy reported. A company spokeswoman told McClatchy the junkets were "immensely valuable in providing customer feedback. One of our key results is customer satisfaction, and this is how we achieve that."

Marci Andino, the current executive director of the South Carolina State Election Commission, received more than $19,000 worth of flights, hotels and meals from ES&S since 2009, according to South Carolina Ethics Commission disclosure forms.

Andino's influence extends beyond the Palmetto State. She is also a member of the U.S. Election Assistance Commission's Standards Board and has testified on election issues. She is a former president of the National Association of State Election Directors. To have an election official tied to a voting company creates concerns about conflicts.

Executives with Political Ties

DCReport also looked into the careers of some key ES&S executives. What we found is concerning.

Kathy Rogers, ES&S's senior vice president for government affairs, landed at ES&S after controversy over her work as a Georgia state elections official. She opposed legislation trying to ensure vote counts could be verified.

In 2019, The New Yorker wrote about her actions in "How Voting-Machine Lobbyists Undermine the Democratic Process."

"In 2006, a bill requiring a verifiable paper record of each ballot, introduced in the Georgia legislature at the urging of election-integrity advocates, failed after the state's elections director, Kathy Rogers, opposed it," the magazine reported.

Georgia used ES&S machines in 2018 but now relies on Dominion equipment.

Georgia's 2018 gubernatorial race is noteworthy because it was overseen by Brian Kemp, who was then in charge of Georgia elections as secretary of state. That year, Kemp also ran for governor while overseeing his own election, a conflict of interest he disregarded.

Kemp won a narrow victory over Democrat Stacey Abrams, but only after his office blocked 53,000 voter registration applications using a strict name-matching protocol comparing state records to voter registration forms.

Kemp's Conflicts

Registrations were tossed if, for example, a person used a first name, middle initial and last name, on one form, but then used all three names in full on another. This invalidated a huge number of voter registration applications.

After Kemp won, a federal judge declared Georgia had to implement a completely new voting system in time for the 2020 elections, replacing what the judge called "unsecure, unreliable and grossly outdated technology." Kemp tried to keep using the ES&S equipment for future elections, prompting Peach State Democrats to assert cronyism in the Kemp administration.

In January 2019, the Georgia Democratic Party challenged the integrity of voting machines that did not create an auditable paper trial, a policy he pursued through the creation of the Secure, Accessible & Fair Election or SAFE Commission.

The Democrats demanded a delay on recommendations for a new voting system "following the discovery that a leading vendor under consideration, whose machines are currently being investigated in a lawsuit due to errors in the 2018 election, has deep connections to Brian Kemp's office." That vendor was ES&S. The deep ties were due to Kemp having hired a longtime associate who was a registered lobbyist for ES&S.

As Politico characterized it at the time: "Georgia likely to plow ahead with buying insecure voting machines." It also reported, "Critics argued that the bill appeared to be written with one vendor in mind: the voting technology giant Election Systems & Software, whose former top lobbyist, is now Kemp's deputy chief of staff."

How many other states are conducting elections on grossly outdated or otherwise unreliable ES&S technology in 2018 and in 2020? This is an issue we are still investigating.

In Georgia, it was Brad Raffensperger, a Republican who succeeded Kemp as the elections overseer, who announced Dominion Voting Systems as the new elections vendor.

A Clean Election

The most recent Georgia election seems to be the first election in recent Georgian history not marred by voting-machine controversy other than Trump's nakedly false claims of vote stealing and corruption aimed at Republican Raffensperger.

The 2020 voting took place on a new system with an auditable paper ballot system. Three recounts, including an audit requiring "roughly 5 million votes in that contest to be recounted by hand" and as Secretary of State Raffensperger stated, showed results as close as imaginable.

"We have now counted legally cast ballots three times, and the results remain unchanged," Raffensperger said. Furthermore, a judge declared Trump's legal team produced "precious little proof" in their pleadings.

ES&S's revolving door policy means its lobbyists are taking top government official positions as well as government political appointees are becoming ES&S executives.

One of these is Chris Wlaschin, who left the Trump administration in March 2018. He was the chief information security official in the Health & Human Services Department. A few weeks later he landed at ES&S as "its new vice president of systems security responsible for the company's security efforts."

HHS to ES&S

Wlaschin abruptly left the Trump administration after HHS Secretary Alex Azar received a letter from a lawyer representing two HHS executives. The letter asserted that Wlaschin improperly had removed the pair and cited an eye-popping false claim Wlaschin used to justify disciplinary action.

"Mr. Wlaschin has stated that my clients were removed from their positions in order to protect an ongoing OIG investigation," wrote lawyer I. Charles McCullough, a former inspector general for the National Security Community.

"You can, therefore, imagine the shock and surprise of my clients when they were both recently advised, unequivocally and categorically, by senior investigators from the HHS OIG, that neither of them are currently or were at any time in the past under investigation" by the inspector general's office, McCullough wrote.

The letter was dated March 12, 2018. Wlaschin's resume says he joined ES&S the next month.

The integrity of voting systems, and especially the ability to audit vote counts, has been the subject of public debate for more than four decades. But most of the recent attention has been focused on one company, Dominion Voting Systems, most recently because of frivolous lawsuits filed by Trump lawyers Rudy Giuliani and Sydney Powell and others. But is that simply a distraction.

We think the issue of who counts our votes, how they are counted, and what ties the companies selling these systems have to politicians deserves more attention. Politicians who must win elections, in order to wield power, must not be able to exert influence on the companies we rely on to tally our votes. We need serious scrutiny over our elections so we can be assured that they represent the will of the people, not of the politicians themselves, and the companies they hire to process our ballots.

There's a secret message buried in Trump's pardons everyone seems to have missed

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The 24 pardons that Donald Trump granted last week drew a lot of attention, but no one seemed to notice the message Trump sent by not issuing pardons. Trump's choices made it clear that he is a white-collar crime boss.

Trump pardoned four mercenaries who murdered Iraqi civilians, but not Jeremy Ridgeway the soldier-for-hire who plead guilty to manslaughter, testified against the others, and was sentenced to a year and a day in federal prison.

Trump pardoned Roger Stone, his dirty trickster confidant; General Michael Flynn his national security adviser who was on the Kremlin payroll; and his 2016 campaign manager Paul Manafort, but not Manafort deputy Rick Gates, who turned state's evidence and confessed to his crimes.

He also pardoned Rod Blagojevich, the former Illinois governor convicted of trying to sell a Senate seat. But there was no pardon for Michael Cohen, Trump's lawyer, and longtime fixer who confessed to committing felonies at the direction of unindicted coconspirator "Individual 1," identified in federal court as Trump.

A future president could use the pardon power to protect elaborate criminal schemes, to subvert the Bill of Rights, to frame political opponents, and even direct political murders.

The pardons of the mercenaries, who worked for Trump ally Erik Prince who supplies hired armies, of campaign aides Stone and Manafort, of Flynn and of Blagojevich carried a clear message. You can bet that lawyers for others considering ratting out Trump or who are already working with authorities to rein in the Trump crime family got the message.

The message: the boss takes care of friends and allies if they lie for the boss or keep silent, but does nothing for those who cooperate with law enforcement. Give Trump's many attacks on the FBI and other law enforcement, this should surprise no one, especially journalists -- and yet it eluded them.

Missing The Story

How is it that none of our major news organizations figured this out? Hint: they rely too much on the official version of events, official announcements and access instead of thinking and exercising reportorial authority, afraid they will be seen as tendentious. If Trump declared that the Sun rises in the West many news organizations would flee from reporting that was false, crazy, or nonsense, and some would focus on how the Sun only appears to rise, never mind that it appears to rise in the East.

The pardons issued so far and more that are no doubt coming in the next three weeks, raise grave questions about the future of our democracy that have received less comment than outrage over the brazen abuse of the pardon power, especially as part of a scheme to obstruct justice.

Think about what will happen the next time someone as lawless as Trump becomes president. Imagine a president with much more skill, smarts, and vigor than Trump, and one with better lawyers. A future president could use the pardon power to protect elaborate criminal schemes, to subvert the Bill of Rights, to frame political opponents, and even direct political murders so long as they were committed in federal jurisdictions so no state-level charges could be brought. The presidential pardon, remember, applies only to federal crimes.

Trump behaved last week exactly as any crime boss would act if he could exercise the powers of the American presidency: show mercy to criminals, especially criminals who have aided your crimes or whose supporters may be useful to you in the future but do nothing for those who did the right thing once they were caught and helped bring others to justice.

Trump Helps Cocaine Trafficker Buddy

This is exactly what Trump, as a private citizen, did in a series of extraordinary favors for a major international cocaine and marijuana trafficker with whom he had extensive and close business ties.

In that case, Trump sought mercy three-time felon Joseph Weichselbaum. The trafficker personally managed and piloted Trump's helicopter in the 1980s, supplied Trump with a fleet of helicopters to ferry high rollers to Atlantic City, and rented a luxury Manhattan apartment from Trump under an unusual lease that obscured how much rent was actually paid.

In a 1986 letter to the sentencing judge, Trump called Weichselbaum "a credit to the community." Trump wrote that Weichselbaum should serve no prison time for a long-running scheme in which the mules – people who drove cars and vans loaded with drugs from Miami to Cincinnati – got 20 years.

Read carefully, Trump's letter was really directed not at the judge, but at Weichselbaum.

Trump's clear message to his buddy: don't rat me out and I'll take care of you.

Trump took excellent care of his cocaine trafficker buddy. Weichselbaum spent just 18 months in a Manhattan prison, paid only a token sum on his $30,000 federal fine because he said he was broke and yet he moved into a $2.4 million double apartment at Trump Tower upon his release. Weichselbaum said the Trump Organization also gave him a new job -- as Trump's helicopter consultant.

Now is the time to demand that Congress act to protect us from a future lawless president so he or she cannot use the pardon power balm to criminal pals and an ax to eviscerate our liberties and our control of our government.

There's a secret message buried in Trump's pardons everyone seems to have missed

Corporations take a back seat as Joe Biden readies government takeover

Among the many challenges Joe Biden's administration will have to confront after Donald Trump ends his temper tantrum is deciding what posture to take toward big business.

There will be a battle for the soul of the new president as corporate Democrats vie with progressives to influence policy in areas such as regulation and antitrust.

Initial signs are encouraging.

The Biden transition just released a list of some 500 individuals who will be staffing the Agency Review Teams charged with preparing the way for a transfer of power in all parts of the executive branch.

Most of the people are from academia, state government, law firms, non-profits, unions, think tanks and foundations.

Surveying the list of affiliations, I found only about 20 for large corporations. Most of the people are from academia, state government, law firms, non-profits, unions, think tanks and foundations.

It is likely some of the law firms are there to represent specific corporate interests, but the numerous representatives from progressive public interest, environmental and labor groups should serve as an effective counterweight.

Unions in Labor Department

In the Labor Department list there are no law firms or corporations; in their place are representatives from five different unions along with people from the National Employment Law Project and other progressive groups.

What is particularly significant is the near absence of people affiliated with Wall Street banks.

The Defense Department list has someone from JPMorgan Chase; Homeland Security has a representative from Capital One; and the International Development group includes someone from U.S. Bank. There is no one from Bank of America, Goldman Sachs, Citigroup, Wells Fargo or Morgan Stanley.

The Treasury Department group is led by someone from Keybank, which is based in Cleveland and ranks about 29th among U.S. banks. Fortunately, the Treasury group also includes representatives from places such as the Center for American Progress, the American Economic Liberties Project and the AFL-CIO.

Environmentalists at EPA

Other balancing acts include the list for the Environmental Protection Agency, which includes a representative from Dell Technologies but also from Earthjustice (the lead person) and The Sierra Club.

Some of the corporations show up in surprising places. Walt Disney is represented on the Intelligence Community list. The cosmetics firm Estee Lauder has someone on the State Department list. Someone from Airbnb is in the National Security Council group.

Tech Companies at OMB

Looking at current corporate villains, the one that stands out is Amazon.com. It shows up on two lists—the one for the State Department and the one for the Office of Management and Budget.

Lyft and Airbnb are also on the OMB list, along with some academics, a consultant, state officials and someone from Meow Wolf, a Santa Fe-based non-profit that produces immersive art experiences.

Given that OMB oversees regulatory policy, the absence of public interest, union and environmental people raises a concern. Otherwise, it appears that the Biden team is limiting corporate influence in the emerging administration.

Let's hope it stays that way.

Here's why you don't want to live in a Republican-run state

As infection rates surge, Democrats still are outpacing Republicans in thwarting coronavirus spread according to my interpretation of data.

A few weeks back I noted in a post that states governed by Republicans had the highest positive COVID-19 test rates, while the states with the lowest positive rates mostly were governed by Democrats.

I argued that positive test rates are a good measure of how serious, or not, governors are in trying to bring the pandemic under control.

While leaders can take measures to limit the actual spread, such as longer and stronger lockdowns and mask requirements, many factors determining the spread are outside their control.

By contrast, they do have control over the amount of testing, although legislatures can play a role since they can appropriate or restrict funding.

Testing also has become a political issue since Donald Trump explicitly said that he wanted to see testing slowed to reduce the number of cases identified.

I thought it was worth an update to see what the story looks like as the country is experiencing a huge surge in infections.

Here's the more recent picture showing the 10 states with the highest infection rates and the 10 states with the lowest rates, based on the John Hopkins Coronavirus Resource Center, seven-day moving averages. (Data are for Oct. 26, 2020.)

Source: John Hopkins Coronavirus Resource Center


Eight of the 10 states with the highest rates have Republican governors. Kansas and Nevada, which come in eighth and ninth, both have Democratic governors.[1] While Democrats also control the legislature in Nevada, the legislature in Kansas is overwhelmingly Republican.

The story is more mixed among the states with the lowest positive rates, with five having Democratic governors and five having Republican governors. However, it is worth noting that all five of the states with Republican governors have legislatures that are controlled by Democrats.

In short, by this measure of efforts at getting the pandemic under control, Democrats seem far more serious than Republicans.

[1] The 100 percent positive rate shown for Mississippi is the result of the way John Hopkins reports the data. It shows the number of positives as a percentage of the tests given in the period, not as a percentage of the results reported that day.

Texas leads fight to end protections for Native American children

The top legal officers of Texas, Louisiana and Indiana—all Republicans—are trying to end legal protections that make it more difficult for child welfare agencies to tear apart Native American families.

Texas Attorney General Ken Paxton argued that the Indian Child Welfare Act violates the equal protection guarantee of the Fifth Amendment because children are put into one of two child welfare systems based on whether they are Native American.

"The ICWA unlawfully attempts to coerce state agencies and courts to carry out an unconstitutional and illegal federal policy of deciding custody based on race," Paxton said.

Congress set up this dual system in 1978 after decades of native American families being destroyed by child welfare agencies. Twenty-five percent to 35% of all Native American children had been separated from their families and placed in adoptive homes, foster care or institutions.

Native American children are still more likely to be removed from their families by state child welfare systems.

The act, signed by President Jimmy Carter, requires that state agencies use "active efforts" to try to prevent the breakup of Native American families, notify people of pending proceedings and their right to intervene and keep records and make them available for inspection.

When a Native American child is removed, preference in placing the child must be given to the child's extended family, then to the child's tribe and then finally to other Native American tribes.

Chad and Jennifer Brackeen, a Fort Worth couple who have adopted a Native American boy and are trying to adopt his half-sister, are also plaintiffs in the suit. Chad Brackeen said in a court hearing that he had concerns about the Native American relative who also wanted to adopt the baby girl, including her smaller house.

"I don't know what that looks like—if she needs space, if she [the child] needs privacy," he said. "I'm a little bit concerned with the limited financial resources possibly to care for this child, should an emergency come up."

In October 2018, federal judge Reed O'Connor ruled the act was unconstitutional, but that decision was reversed by a panel of three Fifth Circuit judges. Paxton asked for all the judges of the Fifth Circuit to hear the case; oral arguments were held in January. Even Team Trump, which has presided over losing track of the migrant parents of 545 children, supports the Indian Child Welfare Act, writing that Native American children were removed by "abusive practices" by state and private agencies.

Psychiatrist Joseph Westermeyer told Congress before the act was passed that Native Americans he treated who had been removed from their families often did reasonably well in early childhood. But as teenagers, they frequently tried to kill themselves, used drugs and ran away.

"It's been my own experience that the vast majority of social workers called to assist Indian families when there is a crisis or distress, do a very poor job," Westermeyer said. "They do not work to keep the family intact."

The act widely is considered a"gold standard" in child welfare policy and provides rights to Native American families that other families in our country don't have such as requiring expert witness testimony before a judge approves placing a child in foster care.

Even with the extra protections, Native American children are still more likely to be removed from their families by state child welfare systems.

Our nation's Children's Bureau founded more than a century ago under President William Howard Taft, spends about $9.8 billion a year to support and monitor child welfare agencies.

All that money hasn't done much to improve justice for children and families in the child welfare system, said law professor Vivek Sankaran.

More than 250,000 children were removed from their parents in fiscal 2019, many who may have never needed to be separated from their parents. Less than half of children are reunified with their parents, and judges are terminating parental rights at a higher rate.

How Trump gets away without paying taxes

To understand how Donald Trump got away with paying little to no income taxes for many years, even after he forged at least one income tax return, it helps to first understand the risks wealthy Americans face for cheating.

Let's start with IRS audits of the 23,400 richest American households, average income $30 million each. In 2018 the Trump administration audited seven. You read that right—seven. That's an audit rate of 0.03%.

If American police detected murders at the same rate it would mean that they would become aware of just five of the 16,214 reported homicides that year. Of course, not everyone is a tax cheat, but audits are about detecting taxes due, whether through error or intent.

Under Obama in 2015, America's richest households were 270 times more likely to be audited than under Trump.

It also helps to know that about 1 million rich Americans didn't even bother to file income tax returns during Barack Obama's last years in office. America's tax police, the near toothless Internal Revenue Service, are so short-staffed that the inspector general says they aren't even trying to make the scofflaws pay the estimated $47.5 billion they owe.

There's no question Trump is a tax cheat because he has done it again and again. He cheated on New York City sales taxes in 1983, for which Mayor Ed Koch said Trump should have served 15 days in jail. He went to extreme, even farcical lengths to evade $3 million of payments he owed in lieu of taxes to New York City.

Trump has been tried twice for civil tax fraud. He lost both times, a story I broke four years ago but you may not know about because America's major news organizations have not reported it except for one passing mention in the wedding announcement section of The New York Times. Two years ago, however, that newspaper did an exhaustive report showing years of calculated gift tax cheating by two generations of Trumps. In recent weeks income tax information that newspaper reported revealed many badges of tax fraud.

So why hasn't Donald Trump been brought to justice? After all, everyday radio and television commercials tell us of the power the IRS has to garnish our wages, seize our bank accounts and even take our homes. Surely brazen tax cheats live in fear of arrest and losing their mansions, jets and yachts, right?

[action]

This is the first of four articles examining the failure of our country to adequately tax and police the wealthy, like Donald Trump. Next: The suspected tax cheats our Justice Department does pursue, and why.

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Auditing the Working Poor

Now let's compare the audits of people in Trump's income class with the working poor, defined as households with incomes under $25,000. They were the subject of almost a third of all IRS audits even though average income was just $12,600.

The audit rate for poor families is 0.28%. That's nine times the audit rate for the richest Americans.

This is a dramatic shift from the recent past. Under Obama in 2015, America's richest households were 270 times more likely to be audited than under Trump, my analysis of IRS Data Book tables data shows. That year 8.16% of these households had their tax returns audited, not 0.03%.

These vast disparities are just one aspect of a many-sided story about the myth of the all-powerful IRS and how a particular class of rich Americans, a class that includes Trump, almost always wins when they play what in tax world is called audit roulette.

The cold hard truth is that the richest Americans today face a teensy-weensy risk of being detected if they cheat. The hardest tax cheating to detect involves people in a particular class. It is a class with privileges Donald Trump lobbied for and testified about to Congress. The taxpayers who are by far the hardest to identify as cheats share these characteristics the IRS is ill-equipped to address:

  • Own their enterprises lock, stock and barrel, giving them total control with no independent verification of revenue
  • File tax returns that appear on the surface to be accurate, even clean as a whistle
  • Make use of hundreds and in some cases thousands of separate corporations and partnerships in many different locations, a tax evasion helper that will be explained later in this series
  • Operate domestically and abroad where tax treaties, rules on delaying reporting income on tax returns and mismatches between rules of different governments create opportunities to hide money
  • Own commercial real estate because the gains from selling property are not automatically reported to the IRS, unlike wages and dividends

Trump fits those conditions to a T. Later in this series, we'll explore just how he always benefitted from the ways our Congress has instructed the tax police to operate.

Presidential Powers

Now add to all this Trump's powers as president. He appoints the Treasury secretary and the IRS commissioner, who had been a Beverly Hills specialist in helping suspected tax cheats avoid indictment. Trump also recommends how much money the IRS gets and how it will be allocated among various functions such as processing refunds and collecting unpaid taxes. This and more means Trump exercises enormous power and influence over which potential tax cheats, if any, will be found. Because he also appoints America's attorney general, Trump influences which suspected tax cheats will be prosecuted.

In addition, Trump's administration is violating an anti-corruption law enacted 96 years ago after the Teapot Dome scandal. That law gives certain people in Congress the same right he has to inspect any income tax return. At least three staffers on the Congressional Joint Committee on Taxation work at the IRS just to inspect tax returns, especially those seeking individuals refunds of $2 million or more, for badges of fraud. Trump got a nearly $73 million refund; he recently confirmed the IRS wants it back.

Trump refuses to allow the chairman of the House Ways and Means Committee, which writes our tax laws, to inspect his tax returns. The committee is suing for access. It is the only known case of a tax return being withheld by any president since 1924 when Calvin Coolidge was president. That sentence is qualified only because the IRS is stalling on DCReport's Freedom of Information Act request for a single number – how many times has the IRS refused or declined to turn over a tax return request in writing by the appropriate lawmakers and staff.

Who Gets Audited

That 0.03% audit rate for America's richest families is misleading. It overstates the risks to people in Trump's situation.

Many in that highest income group have very limited opportunities to cheat. About a sixth of these rich Americans are CEOs of publicly traded companies or otherwise employed at huge salaries. Their pay is independently reported to the IRS. This means that they are more like Joe and Joan Sixpack whose taxes are withheld before they get paid.

Opportunities for workers to cheat almost nonexistent, even for those making more than $50 million in salary and bonus as more than 200 workers have each year under Trump.

We cite these facts to give you a lens through which to focus as this DCReport series examines the state of Trump's taxes and the capacity of the Internal Revenue Service, our national tax police department, to enforce the tax laws.

DCReport's investigation into how Trump and others like him enjoy robust opportunities to cheat on their taxes with little risk of detection shows how for decades Congress has handcuffed our tax police. It's as if your local mayor and city council told their police officers to focus on tricycle thefts, not violent crimes, and wouldn't pay for testing equipment and chemicals in the crime lab.

We relied in part on a database maintained by the TRAC, the Transactional Records Access Clearinghouse at Syracuse University. DCReport donors generously contributed money to purchase access to that database and to pay a Rochester Institute of Technology student to organize the data for analysis. Much of the data TRAC gets had to be extracted from our government through litigation over the public's right to know what our government is doing.

Tax Prosecutions Vanishing

From various official documents and interviews with tax officials, tax defense lawyers and accountants we found our government operates a system of tax law enforcement with these features:

  • Tax prosecution, never a major government activity and generally slipping for decades, collapsed under Trump
  • In 2016, the last Obama year, the IRS referred 2,744 tax cases for prosecution. Since Oct. 1, 2019, the IRS has referred just 231 cases
  • Justice rejected 162 of those cases, or 70%, for "insufficient evidence," an extraordinarily and hard to believe justification since on average each case involved more than a year of detective work
  • Justice rejected an additional 28 cases because prosecuting suspected tax criminals isn't a "national priority"
  • Justice Department's own data shows it is pursuing just 29 new cases
  • More than half of IRS criminal cases in the last decade were about illicit proceeds from narcotics trafficking, money laundering and other criminal activity, not tax cheating by people who underreport their income from lawful activities or overstate their deductions
  • Last year Justice Department prosecutors obtained just 530 guilty pleas and convictions after trial, making the odds of an American adult being found guilty of a federal tax crime about one in 473,000
  • The public never heard about most of those cases because the Justice Department failed to publicize them
  • Almost 900,000 high-income Americans didn't even file a tax return in the last three years of Obama
  • Virtually no effort is being made to collect the estimated $47.5 billion these prosperous-to-rich Americans owe. An Inspector General report says the IRS already dropped 42,600 cases and it is unlikely that any of the others will be pursued

Defunding America's Tax Police

The reality is Congress has defunded America's tax police. The IRS in 2018 had less than half the resources it did, relative to the size of the economy, as when Ronald Reagan was president in 1988, my analysis of federal budget data shows.

Over several decades, as anti-tax activist Grover Norquist persuaded Republicans to sign ironclad pledges to never raises taxes, these same officeholders have worked to make sure the IRS doesn't have the tools or staff to make sure people and companies pay what the law says they owe. Trump personally lobbied for one key change creating an entitlement program for real estate investors that lets them live tax-free if they are rich enough and follow the rules, making his own tax behavior all the more curious.

The beneficiaries of this throttling of the tax police budget and hobbling its operations have been the thin and increasingly rich slice of Americans at the top, especially people who like Trump exert total control of their business affairs.

Republicans persuaded enough Democrats to go along in handcuffing our tax police through laws, some of them based on bogus testimony by people who said they were victims of abusive IRS tactics. By law, the IRS could not respond to the Senate testimony. Congress' Government Accountability Office later wrote a secret report that showed the hearings were unreliable, Ryan Donmoyer of Tax Notes Magazine revealed in 2000. However, subsequent investigations by The Wall Street Journal, Tax Notes Magazine, The Virginian-Pilot and by me when I was the tax reporter for The New York Times showed the hearings were a sham from start to finish.

In response to the 1997 and 1998 Senate Finance Committee hearings led by the late Sen. William Roth of Delaware, and other hearings, Congress imposed all sorts of restrictions on IRS audits. Here are three telling examples we will explore later in this series:

  1. IRS auditors who notice that a taxpayer reports income of under $100,000 but has mansions, fine art and more cannot use that to begin a "lifestyle audit." One man was caught only because a mistress, furious that he didn't keep a promise to buy her a condo, ratted him out to the IRS
  2. Corporations must be told in advance what issues will be examined. If auditors find along the way evidence of tax owed for other reasons they cannot expand the audit unless they uncover clear evidence of criminality
  3. While Congress authorizes what look to be major cash awards to whistleblowers who report tax cheating the program has added less than $1 to every $5,000 in taxes Uncle Sam collects and it takes more than a decade on average to pay these awards

The costs of these favor-the-rich policies even when they cheat are borne by the other 99% of taxpayers. Tax burdens could otherwise be eased through reductions in government spending for their benefit and in added federal debt.

Institutional Corruption

The Framers of our Constitution were concerned deeply with corruption, but not the way they think of it today. They were well aware of the personal venality that today permeates the news from supermarket tabloids to the network news programs. But the Framers focused on how to ensure against institutional corruption ruining our democracy and our society. Law professor Zephyr Teachout explained it in plain English in her book Corruption in America: From Benjamin Franklin's Snuff Box to Citizens United.

Congress pretty much has imposed on the IRS the same institutionally corrupt approach that New Jersey casino regulators employed when Trump dominated Atlantic City gambling.

New Jersey officials created the impression of zealous law enforcement by noisily going after small fries and others who lack the resources to fight back. Or the regulators announced actions raising questions about the behavior of casino owners in dealings with mobsters, cocaine traffickers and money launderers while working hard to avoid making inquiries that would expose wrongdoing by those at the top.

My first book, Temples of Chance, revealed this institutionally corrupt strategy with many examples like cheating novice roulette players at one Trump casino. Another tack was giving favors to gamblers connected to the Yakuza criminal gangs in Japan or the Medellín drug cartel. Casinos owned by Trump and others even extended credit, comped suites, provided liquor and sent limousines to empty the trust accounts of rich child gamblers.

Actually, Congress has gone much further to hobble America's tax police.

The IRS is so short-staffed it cannot even send refunds it acknowledges are owed from 2017 tax returns. Instead of a refund check, some beleaguered taxpayers have shown me form letter after form letter directing them to not ask about their refund for yet another 60 days. An IRS that is not even staffed to refund people's overpayments is going to have a much harder time enforcing the tax laws when it comes to sophisticated tax cheating.

E.R. Brydalski analyzed the TRAC data used in this report.

Mike Pence told a whopper about Trump's economy -- which was plummeting before the pandemic

There's fresh evidence that the robust economy Donald Trump inherited from Barack Obama was faltering before the pandemic.

State personal consumption spending growth slowed sharply in 2019 compared to the year before, the federal Bureau of Economic Analysis reported Thursday morning. The growth rate plummeted by a fifth.

Personal expenditures grew in 2019 but by only 3.9%, down from 4.9% in the previous year.

Counting on Trump to sign a new relief package would be like trusting that he actually knows how to improve the economy for all Americans, not just the already rich.

This official data comes just hours after Mike Pence told a whopper about American incomes during the vice presidential debate Wednesday night, a lie that escaped the notice of our major news organizations. That's because no official announced the numbers and mainstream journalists rely way too much on what officials tell them instead of doing their own analyses of official government data.

Pence said, "the average household income for a family of four increased by $4,000 following President Trump's tax cuts."

Incomes Down, Not Up

In fact, the average income for the bottom 50% of income taxpaying households in 2018 averaged $300 less than in 2016, Obama's last year in office, as DCReport showed more than a month ago from the Trump administration's own official data. Please note this is not the poorest third of Americans but the poorest third of people who made enough to pay income taxes.

Less income under Trump wasn't limited to the poorest third of taxpayers.

Consider the 9% of taxpayers making $75,000 to $100,000. Their average income in 2018 was $128 lower than in 2016 after adjusting for inflation, my analysis of IRS Table1.4 shows.

Total income reported by all Americans did grow, but the benefits were highly concentrated near the top of the national income ladder.

In real terms income reported on tax returns increased by almost $1 trillion over those two years. On the surface that's good. But only those in the top 7%, those making more than $200,000 and up, saw their share of the national income pie grow. Every group making less had to get by on less.

Almost half of the trillion-dollar gain flowed to the 1%, those making $500,000 and up. But even among the one=ercenters the gains were not widely shared.

Just one in 285 taxpayers makes $1 million or more. This very rich and very tiny group took in three of every four dollars of increased income flowing to the one-percenters. Under Trumpian policies, it's good to be rich and very bad to be poor or middle class. But Lying Mike Pence bore false witness by telling you all people are doing well

Useful Maps

When it comes to increased spending in 2019 you can learn how your state did by looking over this useful series of graphic maps at this government website. The first map shows how much the rate of spending declined in 2019 compared to 2018. The data excludes money that state residents spend overseas.

The economic weakness under Trump, pre-pandemic, wasn't limited to the incomes of the vast majority or to spending by everyone. Job growth under Trump, pre-pandemic, ran about 3% below the rate of Obama after the Great Recession ended and job growth resumed in early 2010.

Candidate Trump promised to grow the economy by at least 4% annually and insisted that he could achieve as much as 6% growth in Gross Domestic Product, which measures our country's total economic output. Those of us who study these matters found Trump's claim either laughable or a lie. Time proved we were right as Trump underperformed the average of the previous 70 years.

In 2017, still basking in the glow of the Obama economy, our inflation-adjusted or real Gross Domestic Product grew 2.3% compared to 2016. Growth reached almost 3% in 2018 as the Trump/Radical Republican tax giveaway to big corporations gave a brief kick to economic growth. In 2019, however, GDP growth slid to under 2.2%

And Thursday morning brought the latest job loss numbers. Last week 840,000 Americans filed initial claims for unemployment benefits. There were also 464,000 claims for pandemic unemployment aid.

In all, 25 million Americans are without work right now and many more will join them soon because Trump decreed Tuesday afternoon that he would not sign any new coronavirus relief bill until after the election and then only if he wins. The stock market instantly sank, prompting Trump to do a partial flip-flop. But counting on Trump to sign a new relief package would be like trusting that he actually knows how to improve the economy for all Americans, not just the already rich.

Will Republican cultists die for their dear leader?

Donald Trump is covering up just how he and 18 White House aides and supporters got the coronavirus. That's the latest proof that he doesn't care about you or anyone else.

Instead of shooting someone on Fifth Avenue, spraying lead bullets out of a gun, Trump sprayed the deadly coronavirus with every word coming out of his unmasked mouth.

Among those whose lives are now at risk – the seven children of Judge Amy Coney Barrett, who sat mask-less in the Rose Garden on Sept. 26 when Trump announced their mother was his Supreme Court nominee. As an exercise in atrocious judgment bringing children to a crowded event during a pandemic and not masking them should be enough to establish that Barrett is unfit to sit on any bench.

Then there's the infected Kellyanne Conway, who said that she quit the White House to be with her troubled teenage daughter.

And what about the 11-month-old baby of Kayleigh McEnany, Trump's press secretary? McEnany has tested positive after again and again showing her fealty to the imaged great leader by going mask-less. Does anyone doubt that if McEnany were a poor black or brown woman—or a Jew or Muslim in a Bible Belt county—that child protective services would be investigating whether to remove the infant Blake for her own safety?

Accepting sickness

This is what happens when a cult arises. The leader is special and believers most demonstrate without even being asked that the messages the leader conveys have been internalized. And if he uses tricks and deceits to fool the public you must go along to remain in his good graces even if it exposes you and your newborn to sickness, lifelong health problems and even death.

The reason, rationality and civil debate envisioned by our Founders and Framers have no place in Trump's anti-democratic cult. All that matters is loyalty to the leader, a loyalty that runs only one way.

As for lies, it's hard to top what Trump tweeted Monday before his skillfully timed departure from Walter Reed hospital, a staged event that consumed the entire evening news broadcasts of ABC, CBS and NBC.

Irresponsible

"Don't be afraid of COVID," Trump tweeted before the brilliantly staged pageantry began in what may go down as his single most irresponsible advice during the pandemic that has claimed more American lives in well under a year than combat in World War I, Korea, Vietnam, Afghanistan and Iraq.

That tweet, the flags and dramatic lighting at the White House as the sun set while Trump, his face and hair professionally pampered, posed triumphantly were all part of a propaganda pageant slicker than any event staged by Il Duce, Adolf or Trump's personal heroes, Putin and Kim.

When it comes to using images to kill rationality and stir cultish emotions, Trump has outdone even Leni Riefenstahl. Hitler, incidentally, at least had the smidgen of decency to not expose his beloved propaganda filmmaker to the risk of death by virus, as Trump did his photographer and videographer, among others, at the White House Monday evening.

Coverup

The Trump virus spreading coverup can be seen in the highly restricted contract tracing being undertaken by the White House medical staff. Trump has coronavirus tracers looking only for who was within death shot of his breath, but only since Thursday, Oct. 1.

That's after the Tuesday night debate in Cleveland where Trump and his family arrived late, were not tested and sat mask-less. Did they do it because they knew or had reason to suspect that at least one of them was infected? We don't know because the Trumps aren't talking about it. Eventually, we will find out.

We do know that, so far, Joe Biden and his family have tested negative. Trump's reckless disregard in exposing Biden to the virus is morally indefensible and verges on the criminal.

And what about Trump's rally in Duluth on Wednesday where he pumped up a crowd of mask-less fans?

Minnesota Public Health Department officials are telling the 3,000 attendees to self-quarantine if they were near the president. State Sen. Paul Gazelka, the majority leader, State Rep. Kurt Daudt, the House minority leader, are in quarantine. The My Pillow guy, who spoke at the rally, said he was never close to Trump that night.

Careless Trump believers

Three Minnesota Congressmen, Republicans all, flew back to Washington with Trump on Air Force One and then returned to the Gopher state on Delta Airlines in apparent violation of its rules for those exposed to the coronavirus. This is how disregard for the sanctity of human life spreads like waves from a rock dropped in a pond or, worse, that sinks after skipping across the surface like a candidate touching down for campaign rallies.

Oops, not rallies. Trump says his gatherings of fans are better described as protests against mask-wearing.

But he is using his departure from the hospital, no doubt against medical advice, in a crass appeal to raise money while discouraging people from following the well-established science of how to stop spreading the virus, knowledge that dates to the mid-)19th Century.

Trump Money Plea

That letter is the drugs talking. The powerful steroids Trump was given can make you rage with emotions and feel invincible for a time. I know because it happened to me a dozen years ago, a terrible side effect that afflicts some people given steroids for sound medical reasons.

Trump draws crowds because the majority of Americans have real economic grievances, as I've written about for decades including these recent DCReport pieces. Indeed, Trump ran for office using many of the phrases he heard me say on television about how Washington policies hurt 90% of Americans.

While he pledged in his inaugural address that "the forgotten men and women of our country will be forgotten no longer" his actions documented by DCReport show that he never gave them a thought.

Household staff at risk

Trump also pledged that "at the center of this movement is a crucial conviction: that a nation exists to serve its citizens" and "this American carnage stops right here and stops right now."

Trump doesn't care about the health of the nearly 100 White House household staff, many of them men and women of color, who served loyally one president and his family after another. He doesn't care about the Secret Service agents he made ride in an SUV so he could wave at his fans outside the hospital. When each Secret Service agent pledged to forfeit their own life it was to defend a president under assault, not preening for the television cameras. They are to him what you are, not a human being but an object to be used, abused and then conveniently cast aside or literally buried.

When he took office, Trump expressed a belief that "we are one nation – and their pain is our pain. Their dreams are our dreams; and their success will be our success. We share one heart, one home, and one glorious destiny."

Trump's lack of regard, lack of decency and rejection of medical science may give us one destiny, but it will be anything but glorious now that coronavirus cases have moved back up to 43,000 a day and rising.

"From this day forward, a new vision will govern our land," Trump proclaimed when he took office. "From this moment on, it's going to be America First."

And it is now first. It's America first in coronavirus deaths, in needless pain, in unnecessary economic suffering. Especially, Trump has made America first in unwanted death.

Will Republican cultists die for their dear leader?

Donald Trump is covering up just how he and 18 White House aides and supporters got the coronavirus, the latest proof that he doesn't care about you or anyone else.

Instead of shooting someone on Fifth Avenue, spraying lead bullets out of a gun, Trump sprayed the deadly coronavirus with every word coming out of his unmasked mouth.

Among those whose lives are now at risk – the seven children of Judge Amy Coney Barrett, who sat mask-less in the Rose Garden on Sept. 26 when Trump announced their mother was his Supreme Court nominee. As an exercise in atrocious judgment bringing children to a crowded event during a pandemic and not masking them should be enough to establish that Barrett is unfit to sit on any bench.

Trump doesn't care about the health of the nearly 100 White House household staffers, many men and women of color, who have served loyally one president and his family after another.

Then there's the infected Kellyanne Conway, who said that she quit the White House to be with her troubled teenage daughter.

And what about the 11-month-old baby of Kayleigh McEnany, Trump's press secretary. She has tested positive after again and again showing her fealty to the imaged great leader by going mask-less. Does anyone doubt that if McEnany were a poor black or brown woman—or a Jew or Muslim in a Bible Belt county—that child protective services would be investigating whether to remove the infant Blake for her own safety?

Accepting Sickness

This is what happens when a cult arises. The leader is special and believers most demonstrate without even being asked that the messages the leader conveys have been internalized. And if he uses tricks and deceits to fool the public you must go along to remain in his good graces even if it exposes you and your newborn to sickness, lifelong health problems and even death.

The reason, rationality, and civil debate envisioned by our Founders and Framers have no place in Trump's anti-democratic cult. All that matters is loyalty to the leader, a loyalty that runs only one way.

As for lies, it's hard to top what Trump tweeted Monday before his skillfully timed departure from Walter Reed hospital, a staged event that consumed the entire evening news broadcasts of ABC, CBS and NBC.

Irresponsible

"Don't be afraid of COVID," Trump tweeted before the brilliantly staged pageantry began in what may go down as his single most irresponsible advice during the pandemic that has claimed more American lives than combat in World War I, Korea, Vietnam, Afghanistan, and Iraq.

That tweet, the flags and dramatic lighting at the White House as the sun set while Trump, his face and hair professionally pampered, posed triumphantly were all part of a propaganda pageant slicker than any event staged by Il Duce, Adolf or Trump's personal heroes, Putin and Kim.

When it comes to using images to kill rationality and stir cultish emotions, Trump has outdone even Leni Riefenstahl. Hitler, incidentally, at least had the smidgen of decency to not expose his beloved propaganda filmmaker to the risk of death by virus, as Trump did his photographer and videographer, among others, at the White House Monday evening.

Coverup

The Trump virus spreading coverup can be seen in the highly restricted contract tracing being undertaken by the White House medical staff. Trump has coronavirus tracers looking only for who was within death shot of his breath, but only since Thursday, Oct. 1.

That's after the Tuesday night debate in Cleveland where Trump and his family arrived late, were not tested, and sat mask-less. Did they do it because they knew or had reason to suspect that at least one of them was infected? We don't know because the Trumps aren't talking about it, but eventually, we will find out.

We do know that, so far, Joe Biden and his family have tested negative. Trump's reckless disregard in exposing Biden to the virus is morally indefensible and verges on the criminal.

And what about Trump's rally in Duluth on Wednesday where he pumped up a crowd of mask-less fans?

Minnesota Public Health Department officials are telling the 3,000 attendees to self-quarantine if they were near the president. State Sen. Paul Gazelka, the majority leader, State Rep. Kurt Daudt, the House minority leader, are in quarantine. The My Pillow guy, who spoke at the rally, said he was never close to Trump that night.

Careless Trump Believers

Three Minnesota Congressmen, Republicans all, flew back to Washington with Trump on Air Force One and then returned to the Gopher state on Delta Airlines in apparent violation of its rules for those exposed to the coronavirus. This is how disregard for the sanctity of human life spreads like waves from a rock dropped in a pond or, worse, that sinks after skipping across the surface like a candidate touching down for campaign rallies.

Oops, not rallies. Trump says his gatherings of fans are better described as protests against mask-wearing.

But he is using his departure from the hospital, no doubt against medical advice, in a crass appeal to raise money while discouraging people from following the well-established science of how to stop spreading the virus, knowledge that dates to the mid 19th Century.

Trump Money Plea

That letter is the drugs talking. The powerful steroids Trump was given can make you rage with emotions and feel invincible for a time. I know because it happened to me a dozen years ago, a terrible side effect that afflicts some people given steroids for sound medical reasons.

Trump draws crowds because the majority of Americans have real economic grievances, as I've written about for decades including these recent DCReport pieces. Indeed, Trump ran for office using many of the phrases he heard me say on television about how Washington policies hurt 90% of Americans.

While he pledged in his inaugural address that "the forgotten men and women of our country will be forgotten no longer" his actions documented by DCReport show that he never gave them a thought.

Household Staff At Risk

Trump also pledged that "at the center of this movement is a crucial conviction: that a nation exists to serve its citizens" and "this American carnage stops right here and stops right now."

Trump doesn't care about the health of the nearly 100 White House household staff, many men and women of color, who served loyally one president and his family after another. He doesn't care about the Secret Service agents he made ride in an SUV so he could wave at his fans outside the hospital. When each Secret Service agent pledged to forfeit their own life it was to defend a president under assault, not preening for the television cameras. They are to him what you are, not a human being but an object to be used, abused and when conveniently cast aside or literally buried.

When he took office, Trump expressed a belief that "we are one nation – and their pain is our pain. Their dreams are our dreams; and their success will be our success. We share one heart, one home, and one glorious destiny."

Trump's lack of regard, lack of decency, and rejection of medical science may give us one destiny, but it will be anything but glorious now that coronavirus cases have moved back up to 43,000 a day and rising.

"From this day forward, a new vision will govern our land," Trump proclaimed when he took office. "From this moment on, it's going to be America First."

And it is now first. It's America first in coronavirus deaths, in needless pain, in unnecessary economic suffering, and especially Trump has made America first in unwanted death.

Real tax reform never had a chance under Trump and this GOP

In the wake of the New York Times' revelation that Donald Trump paid no federal income taxes in 10 of the previous 15 years, some of his staunch supporters are saying, "Well, wasn't he just doing what our tax laws allow?"

We may never entirely know whether he followed or broke the law because Republicans in Congress have so thoroughly gutted the IRS that the agency seems incapable of catching up with wealthy investors like Trump.

Congress is certainly to blame both for providing a ridiculously lenient tax code for the super-wealthy and for preventing the IRS from enforcing even the existing weak limits in the law on tax avoidance.

One person is primarily responsible for the farce that is Donald Trump's tax dodging, and that is Donald Trump.

But make no mistake, one person is primarily responsible for the farce that is Donald Trump's tax dodging, and that is Donald Trump. For years, he has actively and loudly supported special tax breaks and tax shelters, making him anything but a passive bystander to their creation.

Many tax experts look to the Tax Reform Act of 1986 as a model of loophole-closing, simplifying tax reform (even if it failed to raise needed revenue). But in 1991, Donald Trump testified before a congressional committee that "this tax act was just an absolute catastrophe for the country and for the real estate industry." He called it "the 1986 catastrophe of the Tax Reform Act."

Trump criticized the very notion of simplifying the tax code by eliminating special breaks. "They thought the word tax shelter was a bad thing," he complained of congressional tax writers, "as opposed to saying it's an investment in real estate."

In 1993, Trump and the real estate industry convinced Congress to revive some of those breaks.

So, it is no surprise that when Trump became president and led the first major rewrite of the tax code in decades, the result was the opposite of a simplified tax system free of special breaks and loopholes.

(With one exception—see a related blog post on the one thing in the 2017 tax law that could have limited Trump's tax dodging and how Congress has already reversed it.)

Here are some types of special breaks available to real estate investors, which we explained in an ITEP report that the 2017 tax law did not touch.

First, real estate investors can use losses more easily than other taxpayers to reduce their tax bills.

Trump regularly reports losses that likely exceed any investment of his own money into business ventures. Investors in other types of business are subject to stricter rules barring them from claiming losses that exceed what they really invested—what they have "at risk." But real estate is subject to looser rules to determine what constitutes "at risk" or a "passive loss."

Second, real estate investors can defer reporting capital gains and other income more easily than other taxpayers can.

Usually whenever an investor sells an asset at a profit, it is a capital gain subject to income tax. But real estate investors who can afford sophisticated tax planning can arrange to trade an appreciated property for another property and avoid reporting income to the IRS because, technically, no sale occurred. The Times reported two years ago that Jared Kushner's family uses this tactic and the Trump Organization likely does as well.

These "like-kind" exchanges are just one of the methods that are available to major real estate investors to defer reporting profits. The 2017 tax law eliminated like-kind exchanges—except for real estate.

Third, real estate investors can more easily avoid reporting debt forgiveness as income.

In general, forgiveness of debt is considered income that is subject to income tax. Without such a rule, the income tax would be very easy to avoid. For example, workers could ask their employers to change their compensation to loans that are later forgiven, so that their compensation would not be subject to income tax.

But major real estate investors can achieve this result because the rules for debt forgiveness are less strict for them. The new Times revelations about Trump touch upon this, explaining that the "I.R.S. considers forgiven debt to be income, but Mr. Trump was able to avoid taxes on much of that money by reducing his ability to declare future business losses."

Fourth, real estate investors benefit from depreciation deductions when the value of their property is climbing.

Owners of assets can claim deductions for depreciation, which is supposed to reflect the fact that assets wear out and lose their value over time. Investors in real estate can depreciate buildings they own even though they sometimes then sell them at a profit, reflecting the fact that their value increased rather than fell.

The benefit of this would be limited to a degree if the rules ensured that profits reflecting amounts already depreciated were taxed at "ordinary" income tax rates rather than a special, low capital gains tax rate, as is the case today.

The Times report does point out that many of Trump's properties would be running at a loss even aside from depreciation deductions. On top of all the tax breaks for wealthy real estate investors, Trump is also just a terrible businessperson who does generate real losses on most ventures he is involved in.

But he also benefits from a tax code that has allowed him to live like a billionaire without paying any taxes in most years and he actively worked, both before and during his presidency, to ensure that the tax code continues to allow this. In hindsight, it obvious the real tax reform never had a chance under this president.

The Institute of Taxation and Economic Policy is a non-profit, non-partisan tax policy organization that conducts rigorous analyses of tax and economic proposals and provides data-driven recommendations on how to shape equitable and sustainable tax systems. Steve Wamhoff is ITEP's director of federal tax policy.