Check The Math

The hyper-literate Matt Yglesias swings into action:

I'm not sure I understand the emphasis -- from both the pundits and from the Clinton campaign itself -- on money at this point. Didn't we just learn that the Clintons have a fortune of over $100 million?

Whoa, wake me up - did I sleep through a tax repeal or something?  No wonder libs are so irked with Bush's tax cuts for the rich.

Check your next paystub, Matt, and see if there is a difference between "gross" and "net".  Or if tedium is your thing, check the Clinton's returns and see whether they actually paid any tax on that famous $109 million of earnings.  The first key number in the Clinton press release is "taxes paid", followed by "charitable contributions", so this is should not remain an utter mystery.  In fact, the press release tells us that their after tax earnings were $57 million off of a gross income of $109 million.  Not too shabby, but still.

Now, depending on how their investments have performed it is entirely possible that they do in fact have a fortune in excess of $100 million, but no, we did not just learn that to be the case.

As to the substance of Matt's question - why doesn't Hillary put her money where her mouth is and write a big check to her own campaign - who knows?  As I recall she was very funny about money in the Whitewater investment; something about Chelsea's college fund, which is obviously no longer an issue.  In any case, I would guess that a loan to her own campaign would make more financial sense, since subsequent fund-raising even years later could let her recoup the loan.

GROAN:  Mickey too?  he had it right on April 5th:

Clintons' Tax Returns: The press is focused on where all that money ($109 million) came from. Fair enough. But where did it all go? This seems like a genuine mystery. It's not as if the Clinton's live especially lavishly, or own huge estates. It's not like Bill has to pay for all his hotels and travel. The Clintons only gave about $44 million to the IRS and to charities (including their own). Where's the rest of it?

Comments

[cathyf]

$5 million, $50 million, $500 million... It's all pretty much the same after a certain point -- a really big number.

[clarice]

I was about to note that Kaus had made the same mistake but you beat me to it. He really does know better.

[sbw]

But what does it MATTER?! *throwing hands up at the Dems in disgust*

[Abner]

Naturally Andy Sullivan, who has trouble counting beyond the number of flatulent explosions in his household in a typical hour, jumps all over the number that the blogosphere's own numbnuts has publicized, that silly $109 million number. Where on earth does The Atlantic do its recruiting...at the local gymn or the loony bin??

[glasater]

Well--there you are. The D's never have understood the difference between gross income and net income.

It does appear that the Clintons did not have very good tax advice.

[BC]

But, but, Abner! You're telling me that Barack Obama is not, like Andy has been saying, the conservative candidate?

[Appalled]

glaster:

Good tax advice means taking advantage of loopholes. And that's not good politically. The Clinton's value power over wealth

[Robbins Mitchell]

Well,as John D. Rockefeller once told Andrew Carnegie: "You need to get yourself $300-400 million and sock it away for a rainy day."

[Robbins Mitchell]

Well,as John D. Rockefeller once told Andrew Carnegie: "You need to get yourself $300-400 million and sock it away for a rainy day."

[bgates]

Appalled - are you contending the man who asked what the meaning of 'is' is avoids loopholes, and Princess Cattle Futures stays away from the ethically questionable acquisition of wealth because it's not good politics?

[Steve-o]

I thought the low after-tax figure was due to a massive "donation" to the Clinton's own foundation. This is a standard tax dodge used by wealthy people (more wealth be upon them). I don't object to it, I'm jsut noting it. Michael Moore and Norm Chomsky use similar techniques. Remember, these people don't think they should pay high taxes, they think YOU should pay high taxes so they can use your money to enforce their will and shape society. Norm Chomsky admitted to this in an interview a few years back. Conservatives believe in American exceptionalism. Liberals believe in personal exceptionalism.

[Ralph L]

I got a phone message Monday that Bill would speak in Elon, NC, (4 miles away) today. Channel 8 reported he will be two hours late to his next appearance in Asheboro. They haven't learned to factor in Bill-time after all these years.

Neither area has a lot of white Democrats, and Elon is a college town. We are older than average, however.

[Appalled]

bgates:

The difference between 50 million and 100 million does not matter much to these people. What matters is power.

(Cattle futures was the difference between being broke and being well-off. That's more substantial.)

[glasater]

bgates--What you said.

Appalled--If those "loopholes" are legal--it is just stupid not to take advantage of them.

Thirteen per cent difference is a whale of a bunch of money in their income bracket.

[CS]

What would have been "good tax advice" here? If you have a way to achieve significant savings with this much of this kind of income over this short a period, please share.

And no, "good tax advice" doesn't mean "taking advantage of loopholes." Think of it as identifying and using efficient reaction mechanisms.

As for Iglesias' question,how does it look for a Dem to self-fund? Guys like Romney just look effete and spendthrift, but wouldn't it be fatal for for a donk? HC took enough flak for merely lending that $5m back in the winter, iirc.

[Ralph L]

how does it look for a Dem to self-fund?
Worked for Sen. Corzine and some woman in Washington state, IIRC, to say nothing of both JFKs. Didn't hurt Perot in a national race.

[JM Hanes]

The part that amuses me is hearing Hillary et al talking down the economy. Obama rakes in $4.x million for a book about himself while the salaries of CEO's are a moral outrage. Smoke that pipe!

[Bill Woods]

IIRC, Jay Rockefeller jokes about having bought his Senate seat. Wikipedia says he spent $12 million,, back in 1980 when that was a lot of money.

[the wolf]

Whoa, hang on...are you suggesting someone is paying Yglesias?

[Rocco]

This is scary

Another potential source of controversy, income and potential conflict of interest for Sen. Clinton is that donations for presidential libraries are currently not required to be disclosed, can be unlimited and are open to corporations, foreign entities and individuals alike.

"The former president has a library that raises money in unlimited, undisclosed amounts, and his wife is in the Senate and running for president," Massie Ritsch, communications director at the Center for Responsive Politics, notes with some alarm. "There's never been a situation like this. It raises questions never raised before. There aren't provisions to account for this."

[Rick Ballard]

"are you suggesting someone is paying Yglesias?"

I'm sure not. He's a cow in the land of free milk.

[glasater]

"The former president has a library that raises money in unlimited, undisclosed amounts, and his wife is in the Senate and running for president,"

Let's save that tidbit for if and when RW gets the D nomination.

By the way--she got ten mil in donations in a twentyfour hour period after winning PA.

[JM Hanes]

Rocco:

I guarantee you that donor list will never see the light of day in any form that can survive a giggle test. Every skeleton the Clintons have to their names is locked up in that library closet.

[Rocco]

That link also contains a graph listing Clinton Assets including an organization called "Citibank Deposit Accounts" with a value of 5-25 million. This value coincidently? jives with a report from Lucy Komisar from the Tax Justice Network examining Citigroup's history of tax evasion.

The Private Bank accepts only very wealthy clients – with $5 million minimum and generally more than $10 million in deposits. It has about 25,000 of such “special clients,” also known as high-net-worth individuals, or HNWIs, and it gives them hand-holding treatment, even finding them maids and baby-sitters. The Private Bank does investment guidance, estate planning, assistance to minimize taxes, and also sets up off-shore accounts, and complicated schemes designed to secure the confidentiality of financial transactions, among them transactions aimed at evading taxes.

[Denny, Alaska]

Sen. Obama (D-McGovern) lost, oh, probably half the thinking, voting population when he posited that it would be a good idea to raise the capital gains tax from 15% to 30% or so.

Told that general government revenues had gone up when the capital gains tax had been cut to 15%, the well-tutored Barry noted that hedge fund managers make lots of money.

Is Krugman advising this guy?

[Rocco]

Or stuffed down Sandy's pants, JM! When the Burkle story broke and Dubai mentioned, I couldn't help think about Elias Aburdene, Wilson's former boss at Rock Creek Corporation. Nosing around, I found this SEC filing from 98 registered to Brothers Gourmet Coffees Inc.

In February 1998, the Board formed a Special Committee. The Special Committee consists of Messrs. Aburdene, Bolduc, Moore and Rudy. The purpose of the Special Committee is to oversee the engagement of Schroder & Co, Inc. ("Schroder"), to evaluate transaction opportunities presented by Schroder, to report the results of their evaluation(s) to the Board and to oversee the negotiation, documentation and consummation of any transaction approved by the Board.

The Board currently consists of Messrs. Aburdene, Bolduc, Breen, Moore, Newton (who is resigning from the Board effective May 14, 1998) and Rudy. The Board held four (4) scheduled meetings and four (4) special meetings in fiscal year 1997. Each director attended at least 75% of the aggregate number of meetings of the Board and committees on which he served during 1997.

Schroder's history

1994 Acquires the remaining 50 percent ownership in Wertheim Schroder & Co. The name is later changed to Schroder & Co. Inc.

2003
April 7: Citigroup renames Salomon Smith Barney, and by extension Schroder Salomon Smith Barney, Citigroup Global Markets Limited.

Citigroup: a culture and history of tax evasion

Here is a list of offshore subsidiaries listed in Citigroup’s annual SEC filing. The corporation’s past behavior raises questions about its continued use of the offshore secrecy system which was central to the cases described in this report.

Citigroup Global Markets (International) Finance AG Switzerland
CitiEquity Pan Europe Smaller Companies Luxembourg
Citigroup Global Markets Holdings GmbH Switzerland
Salomon Brothers Asia Growth Fund Limited Cayman Is.
Citigroup Global Markets Hong Kong Holdings Limited Hong Kong
Citigroup Global Markets Asia Limited Hong Kong
Citigroup Global Markets Hong Kong Futures and Securities Limited Hong
Kong
Citigroup Global Markets Hong Kong Nominee Limited Hong Kong
Salomon Brothers Asset Management Asia Pacific Limited Hong Kong
Umbrella Asset Services Hong Kong Limited Hong Kong
Salomon Brothers Overseas Inc Cayman Is.
Citigroup Global Markets Asia Capital Corporation Limited Ireland
Citigroup Global Markets China Limited Hong Kong
Cheapside Holdings (Jersey) Limited Jersey, Channel Is.
Citigroup Global Markets (Guernsey) Limited Guernsey, Channel Is.
Citigroup Global Markets Mauritius Private Limited Mauritius

[section9]

What, you think the Clinton Donor list is going to reveal names connected with the ODESSA?

We should be so lucky!

[Walter]

What would have been "good tax advice" here?

I threw out a quick one good for at least a bit of tax savings when we last discussed it.

Currently, the Clintons are carrying some $5 million in debt on their two principal residences. Mortgage interest may be deducted as such only to the extent that the total indebtedness does not exceed $1 million.

The Clinton's tax advisers dutifully filled out the form and denied the deduction for some 80% of the interest.

Now, investment interest is deductible (with certain limitations). I don't recall exactly how much interest or portfolio income they reported, but a more aggressive practitioner would have thought for a bit about whether the Clintons could structure their mortgage debt so as to enable them to treat most of the excess as investment loans.

Probably good for a million or so in lower taxes over the last seven years.

Not to mention that they are entitled to a deduction for tax preparation fees*, but list none on Schedule A.

*Of course, they make too much to meet the 2% threshold. Doesn't stop them from claiming other disallowed miscellaneous deductions, though.

Could be I'm blowing smoke on the last one and Hillary! has mentioned the value of the prep fees as a gift on her Senate disclosure forms.

[JM Hanes]

"Or stuffed down Sandy's pants, JM!"

LOL, or stashed at Citibank then too I now gather. Clearly, I underestimated the sheer proliferation of available closets -- if not the quantity of skeletons in lockup. Somebody somewhere should be paying you for oppo research, Rocco! Speaking of which, does anybody know if we've seen Hillary's 1st Lady calendars in their full glory yet?

[Ann]

"...seen Hillary's 1st Lady calendars in their full glory yet?"

I have terrible pictures running through my head, JMH. I immediately thought of full glory as "naked". I am going to have nightmares tonight.

Our style commentary would be fun though! :)

[JM Hanes]

Probably not safe for work though, Ann!

[Rocco]

Thanks JM, I enjoy it...Here's another filing by Brothers Gourmet Coffees Inc from 97. Does this link Aburdene to Burkle?

"CASH FLOW COVERAGE RATIO" shall mean, for any fiscal period, the ratio of (a) EBITDA for such period, PLUS Slotting Fees amortization during such period, MINUS Slotting Fee Payments during such period, MINUS Capital Expenditures during such period, MINUS income and franchise taxes paid during such period to (b) the aggregate of all interest paid in cash during such period, PLUS current maturities of long-term debt during such period; PROVIDED that any calculation of the Cash Flow Coverage Ratio under SECTION 7.11 which includes any Accounting Period in Fiscal Year 1997 shall exclude (i) Slotting Payments made by the Borrower to Yucaipa during Fiscal Year 1997 in an amount not to exceed $8,000,000, (ii) Capital Expenditures made by the Borrower during Fiscal Year 1997 with respect to Yucaipa stores in an amount not to exceed $853,000, and (iii) Capital Expenditures made by the Borrower during Fiscal Year 1997 with respect to the Borrower's Houston, Texas manufacturing facility in an amount not to exceed $2,500,000 (collectively, the "Excluded Expenditures"); PROVIDED FURTHER that, for purposes of calculating the Cash Flow Coverage Ratio for any fiscal period, any such Excluded Expenditure or portion thereof shall be included in any such Accounting Period only to the extent that such Excluded Expenditure or portion thereof was actually paid or disbursed in such Accounting Period."

[Walter]

Appalled,

Just a thought: If Hillary's loan to her campaign is interest-bearing, and she does not win the nomination, can she claim a bad-debt loss to the extent that she does not expect to be repaid? Would that be short-term if she declares it worthless within a year of the loan advances?

If so, why don't other self-financed wealthy individuals use loans rather than donations to finance speculative campaigns?

After all, we have government-subsidized campaign finance for poor people like McCain--why not a smaller (but still substantial) subsidy for rich folks?

Come to think on it, there are probably regulations that prohibit these type of non-trade debts to third parties (Soros, Bass, et al). I haven't seen any with regard to those in the business (Penn, media buys, etc.). But it seems candidates themselves are excepted.

These sort of questions are why JoM does not have a 527 or PAC at this point.

If you are going to Denver--whether or not you wear flowers in your hair (youtube)--we should consider a for-profit news-gathering organization established to fund (and profit from) a joint* documentary/remote broadcasting/blogging endeavor to sponsor Clarice, Jane and HnR** on their bus trip to Denver (investment deductible on the off-chance that it does not make everyone involved fabulously wealthy), or a 501(c) (contributions deductible) public interest educational organization sponsoring a fact-finding tour.

Just saying.

We would have to expand the scope of the mission statement to cover the underlying causes of immigration/emmigration in order to cover the leg through San Diego on to Cabo.

*See, Boris, there's a spot for you on the bus. They'd need someone to spell JMH for the late night driving after she's hit the DoT limits. (Kidding!)

**Think of the pay-per-view proceeds alone...

[glasater]

Have been pondering buying a video camera to compliment the repetoire of still cameras and am trying to justify the expense in my little business.

If I were hired to visually record this described Denver junket--I could deduct the cost of the camera plus travel expenses. Have enough material to put a travelogue together--plus have a little blackmail "stuff" on hand to keep the above mentioned folks in line:-)