Will the sky fall for charities under the new tax law?

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Charities and much of the media are screaming bloody murder about the potential negative impacts of the new 503-page tax reform legislation.

“The tax code is now poised to de-incentivize the heart of civic action in America,” Dan Cardinali, president of Independent Sector, which represents charities, told the Washington Post.

“The GOP tax reform will devastate charitable giving,” shrieked the Los Angeles Times.

Stacy Palmer, Editor of “The Chronicle of Philanthropy,” said on Public Television’s Newshour that as much as $20 billion might not be given in 2018 next year because of the tax law change. An Indiana university study estimated the reduction would be $13 billion.

This apocalyptic vision fits in nicely with the attempt by Democrats to demonize the tax reform law and the Republicans who voted for it in hopes of reaping benefits in the 2018 elections.

But is charitable giving really going to implode? I think not.

The primary concern among the nattering negative cadre appears to be that the number of Americans who qualify for the charitable tax deduction will drop sharply now that the standard deduction has been doubled to $12,000 for an individual, $24,000 for couples. This will result in fewer people itemizing their deductions, and you can only deduct donations if you itemize, a key factor motivating charitable giving, according to the doomsayers.

But this ignores the fact that an awful lot of people already give generously from the heart without claiming a charitable deduction. According to the most recent IRS data, 68.5 percent of households chose to take the standard deduction under the old system, leaving them unable to claim a charitable deduction, but a lot of them made donations anyway. In 2016, the largest source of charitable giving was individuals at $281.86 billion, with two thirds of households giving money to non-profits.

It is estimated that under the new tax law, the share of people itemizing deductions could drop to as few as 5 percent.

It seems highly unlikely that individuals who haven’t been itemizing or those who won’t itemize under the new tax system will decrease their charitable giving when the standard deduction is doubled. In other words, the vast middle class will still probably give, though charities may want to ramp up their appeals.

What looks considerably more threatening for charities is changes in the estate tax under tax reform.

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Before the tax reform law, the estate tax applied only to estates worth at least $5.49 million for individuals and $10.98 million for married couples. The estate tax applied a 40 percent tax rate to estates worth more than those amounts.

In other words, the wealthy have been encouraged to make charitable donations because these donations were not taxed. If their money was left to heirs instead, the estate would pay taxes on amounts greater than about $5.5 million dollars for an individual or $11 million for a couple.

The new tax law tax doubles the annual exclusion amount (the exemption) for estate taxes to $10 million. Couples who do proper planning could double that exemption.

Only 0.2% of all estates ended up being hit with the estate tax under the old formula. The Tax Policy Center estimates that some 11,310 individuals dying in 2017 will leave estates large enough to require filing an estate tax return.

Under the new law, it’s likely that fewer than 1,000 estate tax returns will be filed per year with a tax due. In other words, just 10,000 individuals may be less likely to make charitable donations to avoid estate taxes.

But those individuals control a lot of wealth and many may be people who were previously motivated to give by a desire to avoid estate taxes.

According to the National Committee for Responsive philanthropy (NCRP), study after study shows that tax policy matters in charitable giving and that the estate tax is one of the most important motivators for those at the top of the income distribution. “Rather than see a sizable portion of their estates subject to taxation, wealthy families give while living to reduce the size of their estates; and they also give in the form of bequests upon their death, “ the NCRP says.

The Chronicle of Philanthropy has compiled detailed data on publicly reported charitable gifts of $1 million or more in each state. The largest recipients include private and community foundations, colleges and universities, healthcare programs, the arts, museums and libraries. The Chronicle assumes that a large proportion of those donations is motivated by estate tax planning.

So Oregon charities relying on big gifts may be in for a harder struggle going forward.

The Chronicle data shows the following significant gifts of $1 million or more to Oregon institutions just in 2017 and 2016:

2017

Donor Recipient Gift Value
Anonymous U. of Oregon (Eugene) $50,000,000
Anonymous Oregon State U. at Corvallis $25,000,000
Robert W. Franz Providence Health and Services (Portland, Ore.) $20,000,000
Michael and Arlette Nelson U. of Portland (Ore.) $10,000,000
Anonymous Oregon State U. at Cascades (Bend) $5,000,000
Fariborz Maseeh Portland State U. (Ore.) $5,000,000
Jordan Schnitzer Family Foundation (Jordan Schnitzer) Portland State U. (Ore.) $5,000,000
Anonymous U. of Oregon, Jordan Schnitzer Museum of Art (Eugene) $2,250,000
Keith and Julie Thomson U. of Oregon (Eugene) $2,000,000
Tim and Mary Boyle Providence Foundations of Oregon (Lake Oswego) $2,000,000
Tykeson Family Foundation (Don Tykeson) Oregon State U. at Cascades (Bend) $1,000,000
Robert W. Franz Blanchet House of Hospitality (Portland, Ore.) $1,000,000
Charles McGrath Oregon State U. at Cascades (Bend) $1,000,000

Note: Most of the bequests listed in this database are estimates. In many cases, donors’ bequests are announced long before their wills are settled.

 

2016

 

Donor Recipient Gift Value
Philip H. and Penelope Knight U. of Oregon (Eugene) $500,000,000
Gary and Christine Rood Oregon Health & Science U. (Portland) $12,000,000
Charles and Gwendolyn Lillis U. of Oregon (Eugene) $10,000,000
Philip H. and Penelope Knight Fanconi Anemia Research Fund (Eugene, Ore.) $10,000,000
Tim and Mary Boyle U. of Oregon (Eugene) $10,000,000
Allyn C. and Cheryl Ramberg Ford U. of Oregon (Eugene) $7,000,000
Edward and Cynthia Maletis U. of Oregon (Eugene) $5,000,000
Roberta Buffett and David Elliott Oregon Shakespeare Festival (Ashland) $5,000,000
Don and Willie Tykeson John G. Shedd Institute for the Arts (Eugene, Ore.) $2,000,000
Tim and Mary Boyle Reed College (Portland, Ore.) $2,000,000
David and Anne Myers Columbia River Maritime Museum (Astoria, Ore.) $1,000,000

 

Note: Most of the bequests listed in this database are estimates. In many cases, donors’ bequests are announced long before their wills are settled.

Source: Philanthropy.com; http://bit.ly/2lljb8m

 

 

 

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Lobbying for foreign interests: where are the patriots?

 

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All for a few coins.

Michael Flynn, President Trump’s former national security advisor, had a lucrative $530,000 lobbying contract with Inovo BV, a Netherlands-based consulting firm owned by a Turkish national.

Trump’s former campaign chairman Paul Manafort and Manafort’s former business partner Rick Gates have pleaded not guilty to federal charges, including failing to register for lobbying they did for Viktor Yanukovych, the thoroughly corrupt former president of Ukraine, and his pro-Russian political party. A popular uprising ousted Yanukovych in 2014.

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Anti-government protesters clash with the police at the central Kiev square in the Ukraine

Thousands of Syrians were dead and Jordan, Lebanon and Turkey were hosting Syrian refugees as Syria’s president, Bashar al-Assad, pursued a war to new heights of brutality.

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Syrian refugees.

But the war and refugees weren’t U.S. lobbying firm Brown Lloyd James’ concern. For a fee of $5,000 a month, the firm promoted a positive image for Bashar al-Assad and his wife, Asma. The firm’s efforts paid off when American Vogue magazine published “A Rose in the Desert”, a fawning article about Asma, her British roots, designer fashions and good works.

ASMA

“Asma al-Assad is glamorous, young, and very chic—the freshest and most magnetic of first ladies.” Asma al-Assad: A Rose in the Desert, Vogue.

The Vogue story praised the Assads as a “wildly democratic” family-focused couple who vacationed in Europe, fostered Christianity, were at ease with American celebrities, made theirs the “safest country in the Middle East,” and wanted to give Syria a “brand essence.”

American lobbying firms and so-called think tanks have shown time and time again that they have no compunction about fronting for vile foreign donors or representing foreign countries trying to minimize criticism of their human rights abuses or advance positions potentially inimical to American interests.

 

At least 77 U.S. firms have represented 170 governmental or pseudo-governmental entities of the Soviet Union/Russia trying to influence U.S. policy since 1950, according to the Center for Responsive Politics.

Early this year, the Egyptian government hired Washington, D.C.-based firm Weber Shandwick and then-subsidiary Cassidy & Associates to enhance public perception of Egypt and its intelligence agency.

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Egyptian President Abdel-Fattah el-Sissi

Since Abdel-Fattah el-Sissi took office as president, the internal intelligence agency, Amn al-Watany, has lived up to its reputation for harassing veteran activists, worker organizations, professional unions and what remains of the student activist movement, according to World Politics Review, which analyzes critical global trends. Prominent dissidents—including iconic figures from the 2011 uprisings, such as the leaders of the April 6 Youth Movement—continue to be held in prisons or are subject to surveillance and control by the state security forces.

The Foreign Agents Registration Act (FARA) governs registration of agents for foreign interests. In its 2017 FARA filings, BLJ Worldwide said it represents the China-United States Exchange Foundation (CUSEF) a non-profit based in Hong Kong that describes itself as engaging in promoting relations and facilitating exchanges between China and the United States.

According to the filing, BLJ was very busy promoting China’s interests in the first half of 2017. The firm supported trips to China by reporters from all these U.S. media outlets: Slate; Quartz NFR; The Daily Beast; NBC News; Bloomberg; Businessweek; The New Yorker; The Des Moines Register; the Grand Rapids Free Press; the Chicago Tribune; and Independent Journal Review.

BLJ also hosted a dinner for representatives from CNN, Financial Times, the Economist, Associated Press, Bloomberg and CNBC.

AL-Monitor, which analyzes the trends shaping the future of the Middle East, won the 2017 Online Journalism Award for Explanatory Reporting for a series on how the Gulf States have been throwing money left and right in an effort to undercut Qatar in the eyes of President Donald Trump and undo Obama’s fledgling reconciliation with Iran.

According to Maplight, a non-profit which works to reveal the influence of money in politics, lobbyists for foreign interests gave more than $4.5 million to federal lawmakers and candidates during the 2016 election. Foreign lobbyists and their firms’ political action committees were also responsible for packaging a total of $5.9 million in donations for candidates and party committees, through an influence-enhancing tactic known as “bundling.”

Because the donations come from foreign governments’ U.S.-based lobbyists, they effectively circumvent American laws designed to bar direct foreign donations, Maplight reported. Under federal law, foreign nationals are prohibited from donating to any federal, state, or local campaigns, or political parties. But foreign governments frequently hire U.S. citizens to represent their interests, and those people face no such contribution ban.

Sen. Chuck Grassley (R-IA), chairman of the Senate Judiciary Committee, thinks he has a way to address all this. He wants to strengthen FARA. To that end, he has introduced legislation that would substantially increase FARA disclosure requirements.

But in my view the issue isn’t just disclosure. It’s also the willingness of American businesses to put the interests of foreign powers over those of the United States.

As citizens of the United States we should respect others and try to understand different viewpoints, but that doesn’t mean American lobbyists should take foreign money to advance the influence of foreign thugs and undermine U.S. interests.

Have they no shame?

 

 

 

 

 

 

 

 

 

 

 

Ron Wyden’s shapeshifting on corporate taxes.

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Democrats are savaging Republicans for passing the tax overhaul bill. A key criticism is its reduction in the corporate tax rate. Sen. Ron Wyden (D-OR) is leading the chorus. But a few years ago he proposed a bill that included a similar change.

Politically motivated deceit? Duplicity? You decide.

                                                             2013-14

“Senator Ron Wyden (D-OR), who is poised to become the new chair of the Senate Finance Committee, is the sponsor of a major tax reform plan…(that) would cut the corporate rate to 24 percent from 35 percent.” —Tax Policy Center, Urban Institute & Brookings Institution, December 26, 2013

“The U.S. is stuck with a 35% corporate tax rate—one of the highest in the world—and a painfully complicated and outdated tax code… I continue to believe that reducing the current corporate tax rate by approximately one-third will bring the U.S. in line with other developed countries that long ago recognized the need to evolve their policies to compete globally while growing their domestic economies.” — Senator Ron Wyden, Wall Street Journal, May 8, 2014

“Senator Ron Wyden, the chairman of the Senate Finance Committee, said he wants to cut the corporate income tax rate to 24 percent from 35 percent, chiefly by eliminating loopholes. Wyden has advocated this proposal for years.” — Reuters, June 17, 2014

 

                                                                       2017

“The details leaking out… paint a clear picture of an unprecedented tax giveaway for the most fortunate and biggest corporations.” — Senator Ron Wyden, Accounting Today, Sept. 19, 2017

“Massive handouts to corporations does not mean higher wages or more jobs for the middle class. Corporations are already swimming in cash.” — Senator Ron Wyden, Facebook post, Nov. 30, 2017

“U.S. Sen. Ron Wyden says he wants to muster the same public outcry that sank Republican attempts to repeal the Affordable Care Act to turn back Republican plans for tax cuts benefiting corporations and high-income earners.”— Senator Ron Wyden, Woodburn Independent, Dec. 19, 2017

 

Trump’s seven words: Who you gonna believe?

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It’s not easy being right.

The Washington Post reported on Dec. 6 that, “The Trump administration has informed multiple divisions within the Department of Health and Human Services that they should avoid using certain words or phrases in official documents being drafted for next year’s budget.”

According to the Post, officials at the Centers for Disease Control and Prevention were told seven words or phrases were prohibited in budget documents: “vulnerable,” “entitlement,” “diversity,” “transgender,” “fetus,” “evidence-based” and “science-based.”

I’ve no doubt the two reporters who wrote the Post’s story, Lena H. Sun and Juliet Eipperin, were roundly celebrated for the scoop by their colleagues in the newsroom. It’s also likely that the Post was pleased to see its story picked up by multiple other major and minor newspaper, television and social media outlets.

I thought it was fascinating, too, partly because it tied in with all the current discussion about the misuse of words and the 1984 parallels.

“We’re becoming Venezuela, where doctors are warned not to diagnose a patient as suffering from ‘malnutrition’, likely because it would highlight the widespread hunger in the country where, according to a horrific story in the New York Times, starving children are regularly brought to hospital emergency rooms,” I wrote in a post on my blog.

But was the Washington Post’s story true?

On Dec. 18, National Review, a conservative publication said emphatically, “No”.

In a story titled, “No, HHS Did Not ‘Ban Words’,” Yuval Levin, the editor of National Affairs, a quarterly journal of essays on domestic policy and politics, forcefully challenged the Post’s version of events.

Levin, after talking with some HHS officials, argued that the budget office at the Department of Health and Human Services (HHS) sent divisions of the department a style guide to use in their budget-proposal language and “congressional justification” documents for the coming year. That style guide set out some words to be avoided, Levin said, because they are frequently misused or regularly overused in departmental documents. “The style guide does not prohibit the use of these terms, but it says they should be used only when alternatives (which it proposes in some cases) cannot be,” Levin wrote.

Why avoid certain terms? “The common practice of substituting the term “vulnerable” for “poor”, for example, has a long history of annoying some Republicans on Capitol Hill, and presumably that accounts for the instruction to avoid it in congressional-justification documents,” Levin said. In other words, he said, it wasn’t that retrograde Republicans in the Trump administration ordered career CDC officials not to use these terms but that career CDC officials assumed retrograde Republicans would be triggered by such words and, in an effort to avoid having such Republicans cut their budgets, reasoned they might be best avoided.”

“If all of that is correct… it does make for an interesting story,” Levin said. “But it’s not nearly as interesting as the Washington Post made it seem, and it doesn’t point to quite the same lessons either. In fact, it probably tells us more about the attitudes and assumptions of the career officials in various HHS offices than about the political appointees of the administration they are now supposed to be working for.”

So, slightly modifying the Ghostbusters line, “Who you gonna believe?”

With all the attention being given to so-called “fake news,” it’s becoming harder to know what’s true and what’s not. Sure, there are carefully planted tweets and Facebook posts that are clearly false, items posted not to inform but to sway public opinion. But what about all the stories by so-called legitimate media sources that, when closely examined, seem to some to be more an effort to advance an ideological agenda

The Post and the New York Times, for example, have come under fire from critics arguing that they are increasingly functioning as public relations arms of the Democratic National Committee. Equally, Fox News is routinely accused of just the opposite.

“Since its 1996 launch, Fox has become a central hub of the conservative movement’s well-oiled media machine,” says FAIR, a group that criticizes media bias from a progressive viewpoint. “Together with the GOP organization and its satellite think tanks and advocacy groups, this network of fiercely partisan outlets—such as the Washington Times, the Wall Street Journal editorial page and conservative talk-radio shows like Rush Limbaugh’s—forms a highly effective right-wing echo chamber.”

Perhaps we are just returning to the beginning.

The first newspaper produced in North America was Publick Occurrences, Both Foreign and Domestick, published on September 25, 1690, by Boston printer Benjamin Harris. The colonial government objected to Harris’s negative tone regarding British rule and the newspaper was banned after one issue.

Subsequent newspapers printed during the colonial period were highly opinionated, generally arguing one political point of view or aggressively pushing the ideas of whatever party subsidized the paper.

Mitchell Stephens, a New York University journalism professor and the author of History of News, said the purpose of newspapers “changed to the political and polemical after 1765—around the time of the Stamp Act-as tensions snowballed.”

 

“As the century began, the fledgling colonial press tested its wings,” James Breig, a newspaper editor, wrote in the Colonial Williamsburg Journal. “A bolder journalism opened on the eve of the Revolution. And, as the century closed with the birth of the United States, a rancorously partisan and rambunctious press emerged.”

It looks like it’s back.

George Carlin was ahead of his time: Trump’s 7 Words.

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Back in 1972, ages ago to many of you, comedian George Carlin achieved some notoriety when he crafted a monologue, “Seven Words You Can Never Say on Television”. (For the uninformed, the words were shit, piss, fuck, cunt, cocksucker, motherfucker, and tits. Can you write those in a blog post even today?)

“Those are the heavy seven,” Carlin said. “Those are the ones that’ll infect your soul, curve your spine, and keep the country from winning the war,” he said facetiously.

Now the Trump administration has come up with its own list of seven prohibited words. According to news reports, the Centers for Disease Control and Prevention has been banned from using the following seven words/phrases in budget documents: “vulnerable, entitlement, diversity, transgender, fetus, evidence-based and science-based.”

We’re becoming Venezuela, where doctors are warned not to diagnose a patient as suffering from “malnutrition”, likely because it would highlight the widespread hunger in the country where, according to a horrific story in the New York Times, starving children are regularly brought to hospital emergency rooms.

Or maybe we’re becoming like Turkey, where you still can’t refer to the massacre of at least 1.5 million Armenians living in the Ottoman Empire during 1915-1923 as genocide.

In some cases, alternatives to Trump’s banned words were suggested to CDC analysts. Instead of saying “science-based” or ­“evidence-based,” the analysts were given options like, “CDC bases its recommendations on science in consideration with community standards and wishes,” the Washington Post reported.

As overused as the 1984 parallel can be these days, the instructions to CDC remind me of Orwell’s dystopian novel’s reference to Newspeak, where words mean what the government wants them to mean. In Newspeak, “blackwhite”, for example, means to believe that black is white, to know that black is white, and to forget that one has ever believed the contrary, and “joycamp” is a forced labor camp.

In his essay “Politics and the English Language,” Orwell observed that language is “an instrument which we shape for our own purposes.” In that respect, he said, “political language “is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind.” He was convinced that the language of government was often vague and misleading because its intent was to cloud and/or distract from the truth.

The Trump Administration’s conscious decision to undermine reality goes back at least to January 2017 when Kellyanne Conway, a Trump adviser, used the term “alternative facts,” what Open Culture has called “the latest Orwellian coinage for bald-faced lying.”

The newly announced CDC policy is also part of the corrosion of public policy language in general, what British writer Patrick Cockburn referred to as “the use of tired and misleading words or phrases, their real purpose being not to illuminate but to conceal” and what Orwell called “the defence of the indefensible.”

” The Blair government’s use of a buzzword such as “conversation” – to be conducted with the British people about some issue of policy – was geared to suggest chattiness and fake intimacy, “Cockburn wrote. “In practice, it reinforced people’s sense that they were about to be diddled again by a phoney sense of participation and that the real decisions had already been taken.”

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Can we still say “Moron?”

 

 

 

 

 

 

 

 

 

 

 

 

 

Reducing the home mortgage interest deduction: enough with the crocodile tears

 

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A Christie’s International Real Estate warning.

The tax bill just passed by the Senate would let new homeowners continue to claim a deduction for the interest they pay on mortgage debt of up to $1 million. Under the House bill, existing homeowners could continue writing off interest paid on mortgage debt up to $1 million, but new mortgages would be subject to a $500,000 cap.

The House provision would be calamitous, tragic, disastrous, critics argue.

Reducing or eliminating the mortgage interest deduction “will hurt millions of hard-working American families and marginalize homeownership,” said Granger McDonald, Chairman of the National Association of Realtors.

Slicing the home mortgage interest deduction could lead to a housing recession, said Jerry Howard, CEO of the National Association of Home Builders.

Let’s get real here.

The change proposed by the House wouldn’t really mean much to many taxpayers. You have to itemize deductions to claim the deduction on your tax return now. Only about one-third of taxpayers now itemize and only three-quarters of those claim a mortgage interest deduction, according to the Urban-Brookings Tax Policy Center.

But that would change because the tax bill would almost double the standard deduction, from $12,700 to $24,000 for married couples and from $6,350 to $12,000 for single filers. With this change, fewer taxpayers would benefit from the mortgage interest deduction. The Tax Policy Center figures the share of households claiming the home mortgage interest deduction would drop to 4 percent. That’s right. Just 4 percent.

That drop would also reflect the fact that, despite a lot of high cost homes in the Portland Metro Area, it’s pretty easy to buy a home for less than $500,000 in most of the rest of Oregon and the nation.

For example, the median home value is $251,100 in Tillamook, $336,600 in Corvallis and $162,300 in Pendleton.

According to the Mortgage Bankers Association, Americans who applied for a mortgage to buy a home in January 2017 were looking for a loan sized at an average of $309,200. The median home value in the United States is only $203,400, according to Zillow.

 

State Home Values

NAME MEDIAN Zillow Home Value Index
California $469,300
New York $267,100
Florida $192,600
Illinois $163,100
Texas $159,000
Pennsylvania $155,000

 

Georgia $149,300
Michigan $126,100
Ohio $122,400

Only 5.4% of all loans originated in 2017 have been for more than $500,000, according to ATTOM Data Solutions. That’s just 325,000 loans, most of which went to the wealthy.

Want to know the median list price by city, state, zip code, and neighborhood? Zillow’s Home Value tool provides that data.

The three states with the highest percentage of home mortgage loans over $500,000 in 2017 have been Washington, D.C. (35.1%), Hawaii (15%) and California (11.5%), followed by Delaware, Massachusetts and Washington state at about 9%.

They’re the ones who would see their ox gored under the House bill, and it’s the members of Congress from these states in the forefront of wanting to preserve the $1 million level.

In Democrat-dominated California, the pain would be noticeable. In the San Jose metropolitan area, 75% of new mortgage loans as of early November 2017 were for more than $500,000 and the median home price was more than $1 million, according to an analysis by CoreLogic Inc. In the San Francisco metro area, 60% of new loans were for more than $500,000.

“I think that harming the ability for Americans to own their home is like attacking motherhood and apple pie,” Rep. Judy Chu (D-Monterey Park), who represents an area that includes Pasadena and much of the San Gabriel Valley, told the Los Angeles Times.

So what the Senate is doing is defending a tax break that mostly benefits a small number of affluent homeowners and distorts the housing market?

The distortion occurs because the tax reduction increases the price of housing. Well-off buyers are willing to pay more because they anticipate deducting their mortgage interest, effectively lowering their monthly house payments.

”… there’s good evidence that cutting back the mortgage-interest deduction would lower prices in high-cost areas, where newcomers find it difficult to move nowadays,” asserts Howard Husock, vice president for research and publications at the Manhattan Institute.

So enough with the weeping and wailing. Reducing the home mortgage interest deduction would be a good thing.

Wells Fargo: Rotten to the Core  

Bruce Plante Cartoon: Wells Fargo Bank

In April 2017, Wells Fargo launched a new campaign, “Building Better Every Day,”  to reset its public image after apologizing profusely about cheating some customers and agreeing to pay restitution.

It looks like the bank needed more than an expensive rebranding effort.

According to the Wall St. Journal, the federal Office of the Comptroller of the Currency (OCC) sent a letter to Wells Fargo in November saying it is weighing a formal enforcement action against the bank over improprieties in its auto-insurance and mortgage operations.

The letter said the bank repeatedly failed to correct problems in a broad range of areas.

The letter came after other allegations against the bank. According to NASDAQ, some of Well’s Fargo’s business customers were cheated when an internal review found that out of approximately 300 fee agreements for foreign exchange trades, only about 35 business clients were charged the actual price they had been quoted by Wells Fargo bankers for the trades. Some of the bank’s foreign exchange bankers were motivated by the fact that, unlike at other big banks, they were paid bonuses based solely on how much revenue they brought in.

Wells Fargo has fired four foreign-exchange bankers, while federal investigators have opened their own investigation of the operation.

In august 2017, Warren Buffet, Chief Executive Officer and Chairman of Berkshire Hathaway, a large investor in Wells Fargo, said he expected bad news to keep coming from the bank. “There’s never just one cockroach in the kitchen,” he told CNBC on Squawk Alley, a CNBC news program.

He was right.

Wells Fargo has a history of malfeasance.

In 2015, the Department of Justice’s U.S. Trustee Program entered into a national settlement agreement with Wells Fargo Bank N.A. (Wells Fargo) requiring that the bank pay $81.6 million for its repeated failure to provide 68,000 homeowners with legally required notices related to mortgage payments. Wells Fargo’s actions violated federal bankruptcy rules, thereby denying homeowners the opportunity to challenge the accuracy of mortgage payment increases.

“When creditors fail to comply with the bankruptcy laws and rules, they compromise the integrity of the bankruptcy system and must be held accountable.,” said a Department of Justice release on the settlement.

In the summer of 2016, Wells Fargo admitted to the OCC that it improperly charged customers for collateral-protection insurance on their cars financed through the bank.

In July 2017, the bank said it had found 800,000 customers potentially affected by the improper charges, with 274,000 of them forced into delinquency on their car loans as a result and 25,000 cars wrongly repossessed. Wells Fargo said it would refund customers about $80 million in charges.

In Sept. 2016, Wells Fargo settled for $24.1 million with the Justice Department and the OCC over the improper repossession of cars owned by members of the U.S military.

The Servicemembers Civil Relief Act requires a court order to repossess a vehicle if a service member took out a loan and made a payment before entering military service.

“We all have an obligation to ensure that the women and men who serve our country in the armed forces are afforded all of the rights they are due,” U.S. Attorney Eileen M. Decker of the Central District of California told the Los Angeles Times. “Wells Fargo failed in that obligation.”

That same month, Wells Fargo agreed to pay $185 million to settle lawsuits related to the bank’s creation of customer accounts without the customers being aware of the activity. The sham accounts were created by employees under pressure to perform or be fired.

Wells Fargo said initially that the practice involved the creation by employees of up to 2.1 million sham accounts. In Aug. 2017, Wells Fargo said it found 1.4 million more sham bank and credit card accounts, bringing the total up to 3.5 million.

As Bloomberg’s Matt Levine put it, “…the Wells Fargo scandal took a lot of coordinated nefarious effort.”

Wells Fargo also found that thousands of customers were enrolled in online bill pay programs without their authorization. Wells Fargo said it found 528,000 potentially unauthorized online bill pay enrollments. Wells Fargo employees set up the accounts to meet product sales goals. In this case, the bank said it would return $910,000 to people enrolled in those accounts without their permission.

With all this, there’s no question that Wells Fargo is guilty of a gross betrayal of its customers’ trust.