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How the rich (and their kids) avoid paying taxes … forever

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For the richest Americans, Democrats want to shift toward taxing their wealth, instead of just their salaries and the income their assets generate, reports The Wall Street Journal. The personal income tax indirectly touches wealth, but only when assets are sold and become income. At the end of 2017, U.S. households had $3.8 trillion in unrealized gains in stocks and investment funds, plus more in real estate, private businesses and artwork, according to the Economic Innovation Group, a nonprofit focused on bringing investment to low-income areas. Most of the value of estates over $100 million consists of unrealized gains. Much has never been touched by individual income taxes and may never be.

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The problem, Democrats say, is that capital gains are taxed only when gains are realized through a sale and become income. An investor who buys $10 million in stock that pays no dividend and watches it grow to $50 million doesn’t pay income tax on that appreciation unless the stock is sold.

If an investor dies before selling, the unrealized gains get wiped out, for income-tax purposes. The heirs treat the assets’ cost basis as $50 million, not $10 million; they face no income tax on the $40 million of capital gains if they sell, although an estate tax may be due. This long-standing elimination of unrealized gains at death, for tax purposes, is called “stepped-up basis.”

It means the optimal tax strategy for the very rich, fine-tuned and promoted by the wealth-planning industry, is straightforward: Hold assets until death, borrow against them for living expenses and barely pay income taxes.

 

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Prying Eyes on This Side of the Border

On the southwestern end of the Tohono O’odham Nation’s reservation, roughly 1 mile from a barbed-wire barricade marking Arizona’s border with the Mexican state of Sonora, stands a small black mast-mounted with cameras and sensors is positioned on a trailer hitched to the truck. The Border Patrol’s monitoring of the reservation has been a grim aspect of everyday life, reports The Intercept. And that surveillance is about to become far more intrusive.

The vehicle is parked where U.S. Customs and Border Protection will soon construct a 160-foot surveillance tower capable of continuously monitoring every person and vehicle within a radius of up to 7.5 miles. The tower will be outfitted with high-definition cameras with night vision, thermal sensors, and ground-sweeping radar, all of which will feed real-time data to Border Patrol agents at a central operating station in Ajo, Arizona. The system will store an archive with the ability to rewind and track individuals’ movements across time — an ability known as “wide-area persistent surveillance.”

CBP plans 10 of these towers across the Tohono O’odham reservation, which spans an area roughly the size of Connecticut. Fueled by the growing demonization of migrants, as well as ongoing fears of foreign terrorism, the U.S. borderlands have become laboratories for new systems of enforcement and control. Firsthand reporting, interviews, and a review of documents for this story provide a window into the high-tech surveillance apparatus CBP is building in the name of deterring illicit migration — and highlight how these same systems often end up targeting other marginalized populations as well as political dissidents.

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Insurance Companies Encourage Ransomware Attacks

Ransomware is proliferating across America, disabling computer systems of corporations, city governments, schools and police departments. This month, attackers seeking millions of dollars encrypted the files of 22 Texas municipalities. Overlooked in the ransomware spree is the role of an industry that is both fueling and benefiting from it: insurance. In recent years, cyber insurance sold by domestic and foreign companies has grown into an estimated $7 billion to $8 billion-a-year market in the U.S. alone. While insurers do not release information about ransom payments, ProPublica has found that they often accommodate attackers’ demands, even when alternatives such as saved backup files may be available. The FBI and security researchers say paying ransoms contributes to the profitability and spread of cybercrime and in some cases may ultimately be funding terrorist regimes. But for insurers, it makes financial sense, industry insiders said. It holds down claim costs by avoiding expenses such as covering lost revenue from snarled services and ongoing fees for consultants aiding in data recovery. And, by rewarding hackers, it encourages more ransomware attacks, which in turn frighten more businesses and government agencies into buying policies.

 

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The pundit class is freaking out about socialism — and they’re utterly clueless about where politics is headed

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On Saturday, Jonah Goldberg, the well-known conservative pundittweeted approvingly an article by Jonathan Chait, the well-known liberal pundit. Chait was writing in a mode critics often call “Democrats in Disarray!” He was worried that Joe Biden might be too old to lead a party too far left to be led anywhere next year.

In the aftermath of the 2016 elections, an exotic political theory promoted by the party’s most left-wing flank suddenly gained wide circulation. The appeal of Bernie Sanders proved Democrats were ready to embrace socialism, or at least something close to it; and Donald Trump’s election proved a nominee with extreme positions could still win. These two conclusions, in combination, suggested the party would move as far left as activists preferred at no political cost (all italics mine).

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The Democrats’ weird quasi-impeachment process is basically as bad as doing nothing

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House Democrats are finally pursuing an impeachment inquiry against Donald Trump. Or maybe not. It depends on whom you ask, and when. “The House Judiciary Committee on Thursday advanced a resolution that some Democrats say amounts to opening an impeachment inquiry while others say it means nothing,” reported The Huffington Post last week. A day earlier, The New York Times had reported that “the second-ranking House Democrat, Representative Steny H. Hoyer of Maryland, was unequivocal: An impeachment investigation of President Trump is not underway.” A day later, he backtracked. On Monday, Judiciary Chair Jerry Nadler announced that a hearing scheduled for today would be designated “as an impeachment hearing.”

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Trump is a wannabe dictator in training

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In a view shared by many, it is easy to believe that what Donald Trump really wants is not to be president of the country, but dictator of it.

Indeed, he has suggested how good it might be for him to enjoy a third term, perhaps more, even though the Constitution forcefully forbids it.

In a Father's Day tweet he fantasized over the possibility, suggesting the public might “demand” that he serve a third term. The [good news], he wrote, “is that at the end of six years, after America has been made GREAT again and I leave the beautiful White House  (do you think the people would demand that I stay longer? KEEP AMERICA GREAT)….”

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