Obama's Enemies Face Tax Scrutiny

Job-creators who dare to criticize President Obama are routinely greeted with tax scrutiny.

Billionaires thinking of becoming politically active on the right side of the political spectrum be warned: the press will want to know how much you pay in taxes.

President Nixon tried to get the IRS to audit the taxes of his liberal political enemies. The press, the public, and historians rightfully found that to be an affront to the rule of law and to the spirit of liberty.

But now President Obama and his allies at The New York Times are targeting politically active right-of-center billionaires for tax scrutiny, and hardly anyone seems ready to rise for the principle that one should be able to exercise one’s First Amendment rights to engage in speech, association, and petition without having to pay the penalty of a public tax examination.

The opening move came in August 2010, when a “senior Obama administration official” briefing reporters about corporate taxation offered up Koch Industries as an example of a “multibillion dollar business” that doesn’t “pay any corporate income tax.” Koch Industries is run and owned by Charles and David Koch, who are big funders of, among other things, libertarian-oriented political and idea-oriented organizations and programs.

Then, in November 2011, came a front-page assault by The New York Times on Ronald Lauder, a Reagan administration official who is chairman of the Jewish National Fund and of the World Jewish Congress and of New Yorkers for Term Limits. The Times article faulted Mr. Lauder for using legal techniques to minimize his taxes, but it didn’t mention that the Sulzberger family that owns the Times uses the same techniques. Nor did the Times explain or disclose how it got the idea to focus on Mr. Lauder’s taxes rather than those of the many other Americans, including liberals like the Sulzbergers, who use the same techniques.

Tax-exempt Columbia University rewarded the Times with a Pulitzer Prize for the article about Ambassador Lauder’s taxes. The prize, alas, seems to have had the effect of encouraging another such attack. It came this Sunday in an editorial that spent much of Sunday and Monday on the Times list of most e-mailed articles. Headlined “What Sheldon Adelson Wants,” the editorial offered up Mr. Adelson, the CEO of Las Vegas Sands, as “the perfect illustration of the squalid state of political money.”

The Times editorial claimed that what Mr. Adelson “really fears is Mr. Obama’s proposal to raise taxes on companies like his that make a huge amount of money overseas. Ninety percent of the earnings of his company, the Las Vegas Sands Corporation, come from hotel and casino properties in Singapore and Macau. …Because of the lower tax rate in those countries (currently zero in Macau), the company now has a United States corporate tax rate of 9.8 percent, compared with the statutory rate of 35 percent. President Obama has repeatedly proposed ending the deductions and credits that allow corporations like Las Vegas Sands to shelter billions in income overseas, but has been blocked by Republicans.”

This is breathtaking. First of all, it’s not a “shelter” for a company to pay overseas tax rates on money that is legitimately earned overseas. This isn’t a case of some American company declaring itself to be headquartered in a post office box in Bermuda or Grand Cayman. It’s not even an American company putting its patents or other intellectual property, for tax purposes, in the name of some Swiss or Ireland-based subsidiary. This is an American company with huge buildings, employees, customers, and revenues genuinely located in these foreign countries.

Second, there’s a double standard. As I pointed out last week in defending Mr. Adelson from a similar attack launched by Senator McCain, 85% of chip-maker Intel’s revenues come from overseas. If the problem is American companies with large overseas revenues, why doesn’t the Times go after Intel? Maybe if there were greater appetite overseas for the Times’s left-wing journalism, the Times itself would have some more overseas revenues instead of the trickle it derives from the sales of the Times-owned International Herald Tribune. If the problem is a low effective American tax rate for an American company, why doesn’t the Times have a look at Wynn Resorts, another firm that, like Mr. Adelson’s Las Vegas Sands, has gaming and resort operations in Macau and Las Vegas? Wynn’s effective tax rate for 2011, according to its Form 10K, wasnegative 2.4%, far lower than that of Las Vegas Sands.

The answer, of course, is that what really bothers the Times isn’t Las Vegas Sands’ overseas revenues or its tax rate, but the fact that Mr. Adelson and his wife choose to participate in the American political process. That’s why the Times singles out Mr. Adelson rather than Intel or Mr. Wynn.

It is hard to take seriously an editorial that is so riddled with factual inaccuracies. The tax rate in Macau is not “zero,” as the Times claims it is. There’s a 35% tax on gross gaming revenue. The Times claims $60 million spent by Mr. Adelson is “greater than any political donation in history,” ignoring the $93 million reportedly spent on election efforts in 2010 by the American Federation of State, County, and Municipal Employees and the $100 million that AFSCME says it will spend in 2012. Also unmentioned in the Times editorial is the $100 million that George Soros gave to Human Rights Watch, a group with a political anti-Israel tilt that counters the pro-Israel views of Mr. Adelson, views that so rankle the Times that the newspaper wants to contravene the Constitution to impose limits on their expression.

What is worth taking seriously—and what the Times and its sources seem to be hoping for—is the chilling effect on any successful American businessman thinking of following in the footsteps of the Kochs, Lauder, or Adelson. When Connecticut hedge fund manager Clifford Asness ended his May, 2009, “Unafraid in Greenwich, Connecticut” essay with the line “I am ready for my ‘personalized’ tax rate now,” it was a laugh line. Three years later, we’re at the point where job-creators who dare to defend the free-enterprise system, advocate for a strong and friendly U.S.-Israel relationship, or criticize President Obama are routinely greeted with tax scrutiny.

Ira Stoll is editor of FutureOfCapitalism.com and author of Samuel Adams: A Life.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Hugh Akston||

    See? Who needs campaign finance laws when you have the IRS and the media ready to turn the screws at the president's pleasure?

  • Bucky||

    well, if you want to use "Forward" you really should follow what Uncle Joe did...

  • Mo||

    "Ambassador Lauder"

    Does he still have a job with the Obama administration? Otherwise he's just Mr. Lauder. Have political appointments now become like titles of nobility?

  • R C Dean||

    That's one of my pet peeves.

    There's lots of ex-office holders who seem to have kept the title. The media sycophants still refer to Bill Clinton as "president" Clinton.

  • Brutus||

    I think offices like President retain the honorofic even as an ex-officio.

  • R C Dean||

    I think offices like President retain the honorofic even as an ex-officio.

    That's the point, though. They shouldn't. Its a job title, not a patent of nobility.

  • Pro Libertate||

    I agree completely. It's a bad practice that has no place in our system.

  • The Hammer||

    Didn't we go through this during the GOP IgnorePaulandJohnsons, um, I mean, debates? Is't President retained because it's a singular title, like Speaker Titties?

  • BakedPenguin||

    That goes along with not putting the faces of ex-Presidents or political officials on coins. A tradition (actually, I believe it was a law) that went by the wayside.

  • Nicholas Card||

    The tradition was, and always has been, not putting the faces of living officials on coins.

  • Mo||

    This annoyed the crap out of me during the primary. Everyone was governor, senator or speaker when most of them haven't held that title for anywhere from 4 years to over a decade. Paul and Perry were the only ones who still held their title. You can't call Nancy Pelosi, "Speaker Pelosi", there's already a guy with that job. She's Minority Leader Pelosi or, preferably, just Representative Pelosi.

    The media is pretty consistent though, they still call W HW President Bush.

  • Rich||

    And don't forget this little exchange.

  • perlhaqr||

    "My apologies. Mendacious Cunt Boxer..."

  • Mr. FIFY||

    "Mendacious", in this case, is unnecessary.

    The rest of the sentence, however, is just fine.

  • Bill||

    Did he say yes sir at the end? LMAO.

  • C. S. P. Schofield||

    Or better yet, Inmate Pelosi.

  • T o n y||

    Per George Washington's precedent and the etiquette rules of the universe, only one person is correctly referred to as "President so-and-so" at a time. The same goes for any other unique office. For non-unique offices former holders take the title of the highest office in which they served.

    So Bill Clinton and George W. Bush are correctly called Governor Clinton and Governor Bush.

  • Pro Libertate||

    They're more correctly called Fuckhead Clinton and Fuckhead Bush.

  • ||

    Huh, I never heard that. Is it codified in some etiquette guide somewhere?

    I'm not doubting you, just curious.

  • T o n y||

    This is according to Judith Martin aka Miss Manners, who is the universe's final authority on etiquette.

  • Almanian's Evil Twin||

    So, she's a fucking Tory. I KNEW it!

  • Pro Libertate||

    Well, I'm with Tony on this one--Miss Manners is the final arbiter. Without appeal.

  • BakedPenguin||

    So she went with "Fuckhead"? I'm a little surprised by that, but whatever.

  • Mr. FIFY||

    So, we can look forward to the day when we can use the phrase "former president Obama".

    Maybe there IS a future after all.

  • ||

    Then shouldn't "former president Obama" more correctly be called "Senator Obama" when the time comes?

  • T o n y||

    Yes.

  • Sevo||

    T o n y|6.25.12 @ 5:55PM|#
    "This is according to Judith Martin aka Miss Manners, who is the universe's final authority on etiquette."

    AMAZING!
    A comment from Tony that includes no lies, misdirection, strawmen of other dishonesty!
    Thank you, Tony!

  • T o n y||

    Yet the same substanceless nothing from Sevo.

  • Mr. FIFY||

    He actually was right on the money, Tony.

    Oh, and fuck Judith Martin.

  • ||

    Miss Manners indeed rulez.

  • Bill||

    No, that's completely true. You are supposed to call them fuckhead.

  • Brutus||

    I can't wait for the wonderful things that will come from these same people having all our medical records.

  • Paul.||

    You don't trust the Post Office with your healthcare?

  • Brandybuck||

    It's the bedside manner of the IRS that worries me

  • Hugh Akston||

    But they should at least have the accuracy of the DoD.

  • Almanian's Evil Twin||

    Close enough for horseshoes and hand grenades.

    Now we'll start on your corneal implant!

  • T o n y||

    Billionaires and "job creators" are not synonymous, except in Republican talking points.

  • Paul.||

    Billionaires and "job creators"

    The President is discovering this too. Hopefully it'll give him pause the next time he cuts another check to some fly-by-night solar panel maker.

  • EDG reppin' LBC||

    This is a libertarian website, dude. Not a Republican website. You've been around here long enough to know this. Your inability to understand this means you are either learning disabled, or deliberately obtuse. If the former, I would recommend you get some sort of therapy. If the latter, I would recommend you go fuck yourself.

  • T o n y||

    I agree completely. Hence my utter shock at this libertarian website using Republican talking points.

  • Raistlin||

    Points that even if correct, due to their source must be villified. Commence fucking thyself.

  • Sevo||

    T o n y|6.25.12 @ 5:39PM|#
    "I agree completely. Hence my utter shock at this libertarian website using Republican talking points."

    So Tony posts one honest comment above, and shithead immediately blows it.
    Way to go, shithead.

  • T o n y||

    Not agreeing with your infantile talk radio-derived political beliefs is not the same thing as lying. The more you know!

  • Mr. FIFY||

    You're capable of being in all our cars, monitoring what we listen to?

    You. Are. God. Tony.

  • Brandybuck||

    Bill Gates and Paul Allen did not create one single job. Shame on them.

  • T o n y||

    I didn't say no billionaires are job creators, I said the terms are not synonymous. Some billionaires got there by streamlining workforces. It's a Republican euphemism and nothing else. It's so they don't have to go around saying we can't raise taxes on billionaires.

  • califernian||

    That may be true but as a general rule, a billionaire created a lot of jobs getting there. It is not an empty talking point. It summarizes a lot of truths to point ou this fact, which makes it a convenient talking point. It just so happens that Republicans are right on this one. One of the few things and even then they are only paying lipservice and don't mean it. Of course.

  • The Craig||

    Can you at least concede billionaires create more jobs than poor people?

    Who am I kidding, I'll just cut right to "go fuck yourself Tony."

  • T o n y||

    Billionaires hire more people than poor people, but the entire outlook of employment-as-charity is grotesque. The real driver requires positive feedback of employment and increased consumer demand/broad prosperity.

    "Job creator" rhetoric is so sloppily euphemistic it's embarrassing for it to be deployed here. But there is a real ideology behind it, one incredibly, distastefully worshipful of wealth. Because it's wealth and only wealth--the tax cuts go to you not because you have earned your wealth in a productive way, or even earned it at all, but because you are wealthy. Wealth=virtue. Jesus would be so proud.

  • Mr. FIFY||

    Leave religion out of this, Tony.

  • califernian||

    ", but the entire outlook of employment-as-charity is grotesque. "

    You and your strawmen. Whoever said such a thing on this blod?

  • BigT||

    ", but the entire outlook of employment-as-charity is grotesque. "

    Agree. That's why stimuli, bailouts, and govt projects suck so much. And why "da bro' gotta go!"

  • fish||

    You tell them T o n y!

    Why would you want a job writing software, designing buildings, or healing a puppy when you could be touching peoples naughty bits in airports?

  • ||

    Nice!

  • Bill||

    Streamlining work forces .... Which may have kept the company from going bankrupt and may put it on a path to expand in one of its strengths instead of keeping a dead branch (so to speak). Jobs created or SAVED. Does that help?

  • Brutus||

    I think there are a few people that work for Sheldon Adelson. Maybe he should send them home, being a bad guy and all.

  • Apparently a 'statist'||

    You think Adelson wants the US to cut defense spending as much as a micron, do you?

  • C. S. P. Schofield||

    On the other hand 'Liberal Democrat' and 'Job Destroyer' have been functionally the same thing at least since 1972.

  • T o n y||

    Compare job creation stats for the last few Republican and Democratic presidents. Republicans don't create jobs. They create recessions. It's all a load of utter horseshit. And you people are stupid enough to eat it up.

  • Mr. FIFY||

    Where are the jobs now, and why were we in a recession with Barry at the helm?

    Is he secretly a Republican?

  • Greg F||

    Republicans Politicians don't create jobs.

    There ... fixed fer ya.

  • Mr. FIFY||

    Politicians only create government jobs.

    Just fine-tuning, Greg.

  • kinnath||

    Barak Obama: Dumber than Carter; Dirtier than Nixon

  • R C Dean||

    Dumber than Carter W; Dirtier than Nixon

    Amirite?

  • ||

    ...more inept than Carter would be more accurate.

  • BakedPenguin||

    But less pithy.

  • Mr. FIFY||

    That would make a great bumper-sticker, kinnath.

  • perlhaqr||

    Brak Obama?

  • Brutus||

    Isn't it funny how supposedly "confidential" information about political foes of Barack Hussein Obama seem to wind up in the public domain? Blair Hull, Jack Ryan, the Kochs, Sheldon Adelson...it's like there's a covert push to intimidate would-be critics and opponents.

  • Raven Nation||

    And even ol' Joe the Plumber

  • Brutus||

    There ya go. When fascism came to America, they called it anti-fascism.

  • Mr. FIFY||

    If Barry hadn't been walking down that particular street, he never would have had that encounter with "Joe the Plumber".

    Therefore, it's Barry's fault.

  • The Derider||

    Why shouldn't a free market promulgate knowledge about political actors/financiers of the day?

  • Ted S.||

    The informatoin isn't free. It's stuff these people have been forced to hand over to Big Government.

  • Bill||

    And there should be no double standard.

  • C. S. P. Schofield||

    Is anybody actually surprised? After all, what the Liberals objected to about Nixon wasn't anything he did, judging by how many of their own they have tolerated doing much the same. Their objection to Nixon was purely that he wasn't one of THEM.

  • Brutus||

    And they were still sore over Alger Hiss.

  • C. S. P. Schofield||

    Who was as guilty as a cat in a goldfish bowl.

  • Sevo||

    The hung jury in the first trial says little (or maybe too much) about juries.

  • Juice||

    So I see a lot of reference to the NYT bringing up rich conservatives taxes, but where is the IRS auditing them? And this article makes reference to a “senior Obama administration official” saying something to reporters about Koch Ind. And? Yeah, it's stupid politics, but what am I supposed to be outraged about?

  • Mike M.||

    Although audits are supposed to be random, I suspect that most (if not all) billionaires are probably in fact being audited at least once a year, regardless of which party is in the White House.

    But there really is no good reason at all for either the government or the media to be going out their way to publicize the tax returns of people in private industry just because they're rich. If someone is breaking the law, then go ahead and prosecute him. Otherwise, just shut the fuck up.

  • Mr. FIFY||

    Yeah, they're supposed to be random, but I'd bet a weeks' salary these kinds of audits are "randomly" triggered by a wink and a nod (e-mails and phone records are subpoena-able).

  • Apparently a 'statist'||

    Easy bet, since no one will ever be able to prove you right or wrong.

    This is subhuman rumor-mongering. The IRS *could* be used as a political weapon, so *of course* it is you naive sheeple.

    Climate scientists *might* be in it for the money, so *of course* they are, silly libs.

    Of course, this is all cynical speculation from a bunch of pubescent, paranoid ideologues, but somebody has to protect the sheeple from fascism, no?

  • Bill||

    A newspaper only picking out enemies or those on what they perceive as the wrong side and writing exclusively about them and ignoring other equally valid examples from their own side is not good or fair journalism. Can we agree on that? This is the NY Times, not Mother Jones.

  • DJK||

    Oh, Statist. How right you are. The media have never been involved in journalistic witch hunts or providing cover for political pet projects.

    "Remember the Maine, to Hell with Spain!"

  • Mr. FIFY||

    The Statist is such a trusting soul when it comes to government; it can never do wrong, at least while it's run by his Team.

  • NotSure||

    He got some good lessons from the Russian government, going after rich enemies is what being head of state is all about.

  • Mr. FIFY||

    "President Nixon tried to get the IRS to audit the taxes of his liberal political enemies. The press, the public, and historians rightfully found that to be an affront to the rule of law and to the spirit of liberty."

    It ought to be a minimum prison time of fifty years, for anyone who orders or carries out an IRS audit for political reasons.

    That means EVERYONE involved, from the top down.

    And, make it retroactive to past offenders.

    Tony, will you finally agree on something one of us "Republicans" says?

  • T o n y||

    Destroy the fuckers. Imagine if a swarthy Arab was trying to buy the country for his personal benefit. Perhaps we should drone strike Sheldon Adelson?

  • Mr. FIFY||

    Wow. You had three good words in that paragraph, and you blew them by using them all at the beginning.

    Who the fuck cares about Sheldon Adels- um, wait... it's because he's not the Right Kind of Rich Man. I forgot.

  • Mr. FIFY||

    Oh, wait... you're in favor of "destroying the fuckers" who approve of politically-based IRS revenge audits?

    You, sir, are a true Team Blue trooper.

  • Mr. FIFY||

    Shit... fail. You approve of the fuckers using IRS audits against the enemies of the state.

    There. That's better.

    Wish I could ditch this goddamn headache... I can't focus.

  • joy||

    Nor did the Times explain or disclose how it got the idea to focus on Mr. Lauder’s taxes rather than those of the many other Americans, including liberals like the Sulzbergers, http://www.riemeninnl.com/riem-ferragamo-c-15.html who use the same techniques.

  • ||

    Tax-exempt Columbia University rewarded the Times with a Pulitzer Prize for the article about Ambassador Lauder’s taxes. The prize, alas, seems to have had the effect of encouraging another such attack. It came this Sunday in an editorial that spent much of Sunday and Monday on the Times list of most e-mailed articles. Headlined “What Sheldon Adelson Wants,” the http://www.lunettesporto.com/l.....-3_14.html editorial offered up Mr. Adelson, the CEO of Las Vegas Sands, as “the perfect illustration of the squalid state of political money.”

  • Mr. FIFY||

    "The Times article faulted Mr. Lauder for using legal techniques to minimize his taxes, but it didn’t mention that the Sulzberger family that owns the Times uses the same techniques. Nor did the Times explain or disclose how it got the idea to focus on Mr. Lauder’s taxes rather than those of the many other Americans, including liberals like the Sulzbergers, who use the same techniques."

    1. It's okay when liberals do it.

    2. "Fuck You, That's Why."

  • The Derider||

    Some people here seem pretty confused.

    Media scrutiny of tax documents =/=
    politically punitive tax audits.

  • Ted S.||

  • Mr. FIFY||

    No confusion at all, Derp. I merely pointed out that there have been, and will continue to be, politically-motivated IRS audits of people considered to be enemies of the state.

  • 35N4P2BYY||

    I think you mean criminally punitive...

    However, there clearly is political intent behind this, and it is an effort to erode the political position, credibility and influence of Mr. Adelson.

    But this further drives home the point that there is a significant problem where government has the power to audit and other wise hassle individuals with whom those in power are displeased by.

  • jason||

    The obama government is implementing the new tax policies which bring the new revolution in the government money bank.

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