Donald Trump Engaged in Suspect Tax Schemes And Outright Tax Fraud

(THIS ARTICLE IS COURTESY OF THE NEW YORK TIMES)

Trump Engaged in Suspect Tax Schemes
as He Reaped Riches From His Father

The president has long sold himself as a self-made billionaire, but a Times investigation found that he received at least $413 million in today’s dollars from his father’s real estate empire, much of it through tax dodges in the 1990s.

President Trump participated in dubious tax schemes during the 1990s, including instances of outright fraud, that greatly increased the fortune he received from his parents, an investigation by The New York Times has found.

Mr. Trump won the presidency proclaiming himself a self-made billionaire, and he has long insisted that his father, the legendary New York City builder Fred C. Trump, provided almost no financial help.

But The Times’s investigation, based on a vast trove of confidential tax returns and financial records, reveals that Mr. Trump received the equivalent today of at least $413 million from his father’s real estate empire, starting when he was a toddler and continuing to this day.

Much of this money came to Mr. Trump because he helped his parents dodge taxes. He and his siblings set up a sham corporation to disguise millions of dollars in gifts from their parents, records and interviews show. Records indicate that Mr. Trump helped his father take improper tax deductions worth millions more. He also helped formulate a strategy to undervalue his parents’ real estate holdings by hundreds of millions of dollars on tax returns, sharply reducing the tax bill when those properties were transferred to him and his siblings.

These maneuvers met with little resistance from the Internal Revenue Service, The Times found. The president’s parents, Fred and Mary Trump, transferred well over $1 billion in wealth to their children, which could have produced a tax bill of at least $550 million under the 55 percent tax rate then imposed on gifts and inheritances.

The Trumps paid a total of $52.2 million, or about 5 percent, tax records show.

The president declined repeated requests over several weeks to comment for this article. But a lawyer for Mr. Trump, Charles J. Harder, provided a written statement on Monday, one day after The Times sent a detailed description of its findings. “The New York Times’s allegations of fraud and tax evasion are 100 percent false, and highly defamatory,” Mr. Harder said. “There was no fraud or tax evasion by anyone. The facts upon which The Times bases its false allegations are extremely inaccurate.”

Mr. Harder sought to distance Mr. Trump from the tax strategies used by his family, saying the president had delegated those tasks to relatives and tax professionals. “President Trump had virtually no involvement whatsoever with these matters,” he said. “The affairs were handled by other Trump family members who were not experts themselves and therefore relied entirely upon the aforementioned licensed professionals to ensure full compliance with the law.”

[Read the full statement]

The president’s brother, Robert Trump, issued a statement on behalf of the Trump family:

“Our dear father, Fred C. Trump, passed away in June 1999. Our beloved mother, Mary Anne Trump, passed away in August 2000. All appropriate gift and estate tax returns were filed, and the required taxes were paid. Our father’s estate was closed in 2001 by both the Internal Revenue Service and the New York State tax authorities, and our mother’s estate was closed in 2004. Our family has no other comment on these matters that happened some 20 years ago, and would appreciate your respecting the privacy of our deceased parents, may God rest their souls.”

The Times’s findings raise new questions about Mr. Trump’s refusal to release his income tax returns, breaking with decades of practice by past presidents. According to tax experts, it is unlikely that Mr. Trump would be vulnerable to criminal prosecution for helping his parents evade taxes, because the acts happened too long ago and are past the statute of limitations. There is no time limit, however, on civil fines for tax fraud.

The findings are based on interviews with Fred Trump’s former employees and advisers and more than 100,000 pages of documents describing the inner workings and immense profitability of his empire. They include documents culled from public sources — mortgages and deeds, probate records, financial disclosure reports, regulatory records and civil court files.

The investigation also draws on tens of thousands of pages of confidential records — bank statements, financial audits, accounting ledgers, cash disbursement reports, invoices and canceled checks. Most notably, the documents include more than 200 tax returns from Fred Trump, his companies and various Trump partnerships and trusts. While the records do not include the president’s personal tax returns and reveal little about his recent business dealings at home and abroad, dozens of corporate, partnership and trust tax returns offer the first public accounting of the income he received for decades from various family enterprises.

[11 takeaways from The Times’s investigation]

What emerges from this body of evidence is a financial biography of the 45th president fundamentally at odds with the story Mr. Trump has sold in his books, his TV shows and his political life. In Mr. Trump’s version of how he got rich, he was the master deal maker who broke free of his father’s “tiny” outer-borough operation and parlayed a single $1 million loan from his father (“I had to pay him back with interest!”) into a $10 billion empire that would slap the Trump name on hotels, high-rises, casinos, airlines and golf courses the world over. In Mr. Trump’s version, it was always his guts and gumption that overcame setbacks. Fred Trump was simply a cheerleader.

“I built what I built myself,” Mr. Trump has said, a narrative that was long amplified by often-credulous coverage from news organizations, including The Times.

Certainly a handful of journalists and biographers, notably Wayne Barrett, Gwenda Blair, David Cay Johnston and Timothy L. O’Brien, have challenged this story, especially the claim of being worth $10 billion. They described how Mr. Trump piggybacked off his father’s banking connections to gain a foothold in Manhattan real estate. They poked holes in his go-to talking point about the $1 million loan, citing evidence that he actually got $14 million. They told how Fred Trump once helped his son make a bond payment on an Atlantic City casino by buying $3.5 million in casino chips.

But The Times’s investigation of the Trump family’s finances is unprecedented in scope and precision, offering the first comprehensive look at the inherited fortune and tax dodges that guaranteed Donald J. Trump a gilded life. The reporting makes clear that in every era of Mr. Trump’s life, his finances were deeply intertwined with, and dependent on, his father’s wealth.

Donald J. Trump accumulated wealth throughout his childhood thanks to his father, Fred C. Trump.

By age 3, Mr. Trump was earning $200,000 a year in today’s dollars from his father’s empire. He was a millionaire by age 8. By the time he was 17, his father had given him part ownership of a 52-unit apartment building. Soon after Mr. Trump graduated from college, he was receiving the equivalent of $1 million a year from his father. The money increased with the years, to more than $5 million annually in his 40s and 50s.

Fred Trump’s real estate empire was not just scores of apartment buildings. It was also a mountain of cash, tens of millions of dollars in profits building up inside his businesses, banking records show. In one six-year span, from 1988 through 1993, Fred Trump reported $109.7 million in total income, now equivalent to $210.7 million. It was not unusual for tens of millions in Treasury bills and certificates of deposit to flow through his personal bank accounts each month.

Fred Trump was relentless and creative in finding ways to channel this wealth to his children. He made Donald not just his salaried employee but also his property manager, landlord, banker and consultant. He gave him loan after loan, many never repaid. He provided money for his car, money for his employees, money to buy stocks, money for his first Manhattan offices and money to renovate those offices. He gave him three trust funds. He gave him shares in multiple partnerships. He gave him $10,000 Christmas checks. He gave him laundry revenue from his buildings.

Much of his giving was structured to sidestep gift and inheritance taxes using methods tax experts described to The Times as improper or possibly illegal. Although Fred Trump became wealthy with help from federal housing subsidies, he insisted that it was manifestly unfair for the government to tax his fortune as it passed to his children. When he was in his 80s and beginning to slide into dementia, evading gift and estate taxes became a family affair, with Donald Trump playing a crucial role, interviews and newly obtained documents show.

The line between legal tax avoidance and illegal tax evasion is often murky, and it is constantly being stretched by inventive tax lawyers. There is no shortage of clever tax avoidance tricks that have been blessed by either the courts or the I.R.S. itself. The richest Americans almost never pay anything close to full freight. But tax experts briefed on The Times’s findings said the Trumps appeared to have done more than exploit legal loopholes. They said the conduct described here represented a pattern of deception and obfuscation, particularly about the value of Fred Trump’s real estate, that repeatedly prevented the I.R.S. from taxing large transfers of wealth to his children.

“The theme I see here through all of this is valuations: They play around with valuations in extreme ways,” said Lee-Ford Tritt, a University of Florida law professor and a leading expert in gift and estate tax law. “There are dramatic fluctuations depending on their purpose.”

The manipulation of values to evade taxes was central to one of the most important financial events in Donald Trump’s life. In an episode never before revealed, Mr. Trump and his siblings gained ownership of most of their father’s empire on Nov. 22, 1997, a year and a half before Fred Trump’s death. Critical to the complex transaction was the value put on the real estate. The lower its value, the lower the gift taxes. The Trumps dodged hundreds of millions in gift taxes by submitting tax returns that grossly undervalued the properties, claiming they were worth just $41.4 million.

The same set of buildings would be sold off over the next decade for more than 16 times that amount.

The most overt fraud was All County Building Supply & Maintenance, a company formed by the Trump family in 1992. All County’s ostensible purpose was to be the purchasing agent for Fred Trump’s buildings, buying everything from boilers to cleaning supplies. It did no such thing, records and interviews show. Instead All County siphoned millions of dollars from Fred Trump’s empire by simply marking up purchases already made by his employees. Those millions, effectively untaxed gifts, then flowed to All County’s owners — Donald Trump, his siblings and a cousin. Fred Trump then used the padded All County receipts to justify bigger rent increases for thousands of tenants.

After this article was published on Tuesday, a spokesman for the New York State Department of Taxation and Finance said the agency was “reviewing the allegations” and “vigorously pursuing all appropriate areas of investigation.”

All told, The Times documented 295 streams of revenue that Fred Trump created over five decades to enrich his son. In most cases his four other children benefited equally. But over time, as Donald Trump careened from one financial disaster to the next, his father found ways to give him substantially more money, records show. Even so, in 1990, according to previously secret depositions, Mr. Trump tried to have his father’s will rewritten in a way that Fred Trump, alarmed and angered, feared could result in his empire’s being used to bail out his son’s failing businesses.

Of course, the story of how Donald Trump got rich cannot be reduced to handouts from his father. Before he became president, his singular achievement was building the brand of Donald J. Trump, Self-Made Billionaire, a brand so potent it generated hundreds of millions of dollars in revenue through TV shows, books and licensing deals.

Constructing that image required more than Fred Trump’s money. Just as important were his son’s preternatural marketing skills and always-be-closing competitive hustle. While Fred Trump helped finance the accouterments of wealth, Donald Trump, master self-promoter, spun them into a seductive narrative. Fred Trump’s money, for example, helped build Trump Tower, the talisman of privilege that established his son as a major player in New York. But Donald Trump recognized and exploited the iconic power of Trump Tower as a primary stage for both “The Apprentice” and his presidential campaign.

The biggest payday he ever got from his father came long after Fred Trump’s death. It happened quietly, without the usual Trumpian news conference, on May 4, 2004, when Mr. Trump and his siblings sold off the empire their father had spent 70 years assembling with the dream that it would never leave his family.

Donald Trump’s cut: $177.3 million, or $236.2 million in today’s dollars.

Slovakian Reporter And His Girlfriend Shot Dead In Their Home

(THIS ARTICLE IS COURTESY OF TIME NEWS)

 

 Prague—A Slovak investigative reporter and his girlfriend were shot dead in their home in an attack likely linked to his reporting on tax evasion, Slovakia’s top police official said Monday.

The bodies of 27-year-old Jan Kuciak and his partner were found on Sunday evening in their house in the town of Velka Maca, east of the capital, Bratislava, national police force president Tibor Gaspar said.

Police went to the house at the request of a worried family member.

Gaspar said the slayings “likely have something to do with his investigative activities.” He declined to elaborate.

Slovak Prime Minister Robert Fico said if that if that were the case, it would be “an unprecedented attack on freedom of the press and democracy in Slovakia.”

Fico announced his government was offering 1 million euros ($1.23 million) to anyone who helped the authorities find the people responsible.

Reporters Without Borders, a watchdog group based in Paris, noted that Kuciak was the second journalist killed in the European Union in five months.

Daphne Caruana Galizia, a reporter in Malta who investigated corruption, was killed in October by a bomb that destroyed her car. The crime drew attention to financial corruption on the island nation.

Three Maltese men believed to have triggered the powerful bomb that killed Caruana Galizia were ordered in December to stand trial for murder. Investigators think the men were working for someone, but no mastermind has been identified.

In Slovakia, Gaspar said the reporter was shot in the chest and his girlfriend was shot in the head. He said the killings were estimated to have taken place between Thursday and Sunday.

He added that Slovakia “has never faced such an unprecedented attack on a journalist.”

Kuciak was working for Aktuality.sk news website. He focused mainly on tax evasion.

“We are shocked and stunned by the news that Jan Kuciak and his partner were apparently victims of a cruel attack,” publisher Ringier Axel Springer Slovakia, to which Aktuality.sk belongs, said in a statement.

“We mourn with the family, the friends and the colleagues; we will do everything to support the investigating authorities to bring the perpetrator to justice.”

Kuciak latest story reported on a businessman suspected of selling flats in an apartment complex to his own companies. The reporter questioned the business reason for doing that, and speculated that it could be a method of avoiding taxes.

Last year, Kuciak alleged that the businessman, Marian Kocner, threatened him following publication of a previous story. The reporter said he filed a complaint with police and alleged they failed to act.

Gaspar said everyone who had been in touch with Kuciak will be questioned. Police plan to provide protection for an unspecified number of other reporters from Aktuality.sk, he said without elaborating.

Slovak President Andrej Kiska called Monday for a quick investigation of the crime.

“We have to find those who did it as soon as possible and ensure the safety of all journalists,” Kiska said in a statement.

Editors-in-chief of major Slovak media urged the government to take necessary steps to find the people responsible for the slayings and “to create conditions for the safe work of journalists.”

Reporters Without Borders also pressed for quick action.

“We call for an investigation in order to establish the exact circumstances of Jan Kuciak’s death and we demand that the authorities shed all possible light on this case, especially as he and those close to him had been threatened in recent months,” Pauline Ades-Mevel, head of the group’s Europe and Balkans desk, said in a statement.

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The Unneeded Poor WILL BE Exterminated

The Unneeded Poor WILL BE Exterminated

 

In this article today I am going to write it as a proverbial ‘Devils Advocate’. What I mean by this is that this is not something that I want to happen yet I am making the argument to you that it is very much a possible reality as the human race continues to degenerate.

 

When it comes to politics I am an ‘Independent’, neither a Democrat nor a Republican. I believe that both of those major parties are about as crooked at the top levels as they can find a way to be. When you are a person like Hillary or Bill Clinton or a Trump or a Bush I believe that they have proven themselves to be the type of people who will do anything to win or to enrich themselves. In the past day or so thousands of documents dubbed the ‘Paradise Papers’ have surfaced showing how the super wealthy cheat their country and their people out of tax revenues. Last year the same type thing happened with the ‘Panama Papers.’ These documents show that not only are many of the ‘super wealthy’ cheating on their taxes, they also show how intertwined they are with world leaders, government officials, and the super huge global companies as they all seek to scratch each other’s backs in their efforts to get even richer.

 

Back in the mid-1970’s you used to hear people talking on the radio and TV how with the ‘new technologies’ how people were only going to be only having to work 4 day weeks because the machines will allow us to get as much done in 4 days as was currently being done in the 5 day work week. How foolish these ‘talking heads’ were. If you are the employer why would you give up the chance to make an extra 20% each week by giving your employees an extra day off? Especially if your company is on the Stock Exchange, your stockholders would quickly replace you. The business world, especially those on the Stock Exchange are only concerned about one thing, higher profits. If you have ever paid any attention at all to the stock market, you should have noticed how little these people think of the people who are actually making the products. When two companies merge the value of the stock goes up. Why, because the next thing that will happen is the new Board of Directors will be getting rid of many ‘unneeded’ employees. Doing this means that the company will take those wages as pure profit, increasing the value of its stock. When a company decides to get rid of employees, the stock value goes up. When a company breaks a Union, the stock value goes up. During these events, you should also have seen that the Board of Directors salaries and bonuses go up. When a company moves their production factories to a ‘third world’ country where they can fire all of their American workers and get child slave labor to do all the production, stock values, and executive compensation goes up.

 

The world as you know has a population growth that is unsustainable yet at this same time machines and robots (AI) are taking more and more jobs away from workers. From a business standpoint, having machines replace human workers is a very wise thing to do, and it increases your stock value and the bosses salaries and compensation. If they invest in machines they can get rid of the overhead cost of having human employees. Think about it, no more salaries to pay, no benefit packages to pay like Workers Comp, vacation pay, health insurance, retirement benefits, paid sick days, you can’t be sued by a computer, no OSHA regulations to adhere to. Folks, the list goes on and on.

 

Our planet has about seven billion people on it right now, look at the slave labor around the world right now, from Africa to Asia to the Middle-East and yes, here in the U.S. also. Is slave labor legal in a lot of these countries? No, but it still goes on. You may say why, why does it still go on but the answer is simple, pay as little for the labor as possible to increase the profits at the top and to the stockholders. You may say now wait a moment, slaves don’t cost anything but this is not totally true. Slaves still have to get some food and some water or they will die or become too weak to do the work. The more slaves you have in the ‘waiting room’ the less you have to supply to each one each day. Why, because it is in your financial best interest if all of the ‘extras’ die. If the ‘extras’ aren’t dying fast enough on their own, you assist them.

 

If the Earth has seven billion people but can only sustain six billion people because there is no way to produce enough food, what happens to the extra billion people? Who do you think are going to be the ones that are starved to death? Hint, it is not going to be the super rich who basically own everything, it will be the poorest of the poor who will be eliminated. During the early Republican Primaries last year a former ‘Speaker of the House’ Newt Gingrich spelled out the perfect Republican ‘wish list.’ As you probably know the majority of the Republicans in the Congress and the Senate, and this President wants to cut the national deficit by cutting programs like food stamps to the poor and cutting way back on Medicare, Medicaid, meals on wheels, school lunch programs and Social Security. Folks, who need these programs the most? Mr. Gingrich in a TV program last year went even further. Mr. Gingrich consider all of these programs to be ‘welfare’, yet he went further, he called military retirement pay, VA disability compensation and the VA itself ‘welfare’ programs and he said that all of these ‘Welfare’ programs need to be eliminated. There was one thing that he did not include in his list of welfare programs, that was Congressional, Senate, and Presidential retirement pay and benefits, go figure. He has been receiving taxpayer-paid benefits for decades, but I guess that doesn’t count.

 

Back in the 1950’s the top end national tax rate was 90%, during that time the U.S. was able to build city infrastructures, a National Highway program unequaled in the whole world as well as thousands of new bridges and dams. Now, our roads, bridges, dams, and cities are falling apart, why is this? Now the top end tax rate has been 35% and the President is pushing a top end tax rate of 20%. This is at the same time that corporations are swimming in cash and as they say, with nowhere to spend it. About six months ago, I think it was on CNN, that they reported that U.S. companies have about 13 Trillion Dollars sitting in offshore accounts. So, what do these Republican lawmakers want to do, take even more money out of the economy and give it to these same folks who are destroying our country from the inside? It is also these same benefactors who are filling the pockets of these same evil politicians.

 

Back in the late 1940’s and early 1950’s in China Chairman Mao put a starvation policy in place against the citizens of China. The reason was simple, 500 million people are easier to control than one billion people. Folks, these are just things that I have seen, heard, and read throughout my 60+ years. You don’t have to agree with anything that I have written in this article today, but I hope that I have been able to at least get you to think about these issues.

 

 

 

 

 

The Trump Family: Are They Guilty Of Treason And Tax Evasion/Fraud?

 

This question unfortunately could be directed at the Clinton family or even the Bush family but today I am asking this question about the President and his family. I am not a fan of any of these families as they have all proven to be power-hungry, money hungry habitual liars. I believe that most Americans knew that Hillary Clinton has had real trouble in her life with finding out a way to not lie when she opens her mouth and I believe that this is one of the many reasons that people like myself could not vote for her last November. By what I hear from other folks they said that they were willing to give Donald Trump a chance to see if he would tell the truth on domestic and foreign agendas. I know that a lot of us are now very unhappy with his ability to ever tell the truth. Part of the Presidents issues are his King Kong size ego, and his peanut size brain. During the campaign he often spoke of how intelligent he was, how he knew more that most everyone on every thing, like how he knew more than the Generals concerning the Middle-East. Now that he has been in Office for about six months he has proven to the whole world that he is pretty much nothing but an idiot, and an ass. The whole world has learned that there is no way they can trust anything that he says. Another issue with our President is his constant lying and the fact that he tells so many lies each day that he can’t remember one line of BS he has told from one morning till the afternoon. Yet this article today isn’t about his massive ignorance of almost every issue on the planet, it is about if he and his family have committed treason concerning Russia and if he is guilty of massive tax evasion and tax fraud.

 

 

These are not accusations, they are questions, very important questions that ‘We The People’ absolutely need to know the whole truth about very, very soon. To me it appears there is no doubt about President Trump and several in his inner circle have lied many times about their connections with the Russian government which in Russia means President Putin. They have tried to hide many meetings with Russian officials, lying to the Congress and the American people about those meeting and connections. There are reasons that these people have collective memory loss when it concerns Russia. Even our Attorney General who is supposed to be Americas top ‘law enforcement’ officer lied to Congress and the people more than once on this issue. Folks, do you really think that all of these folks have Dementia? I don’t, there are reasons that these people are lying to us. Just like Attorney General Jeff Sessions who is such a hardliner about putting as many poor people as possible in prisons for as long as possible, is there another reason he is like this? Turns out that Mr. Sessions has a lot of stock in the two largest ‘Prison for Profit” companies in the Country. When Mr. Sessions was confirmed to be the new AG his own personal fortune in these two stocks skyrocketed. And to think, he is the ‘top Cop’ in our Country. As you most likely noticed I said putting poor people in jail, if he was really doing his job he would have to arrest the President and several of his personal staff then resign at once and put himself in one of his own prisons. I know that I am like most folks in that I am sick and tired of these crooked habitual lying “Leaders.”

 

In the years before Mr. Trump officially announced that he was going to run for President again and even early in the campaign he used to openly brag about all of his investments in Russia and business deals he had with well-connected Russians here in the States. Remember, he used to even brag on national television how he had met President Putin before but once elected denied that he ever said that. Maybe if he could learn to be truthful all of the time then maybe his peanut brain could at least remember events correctly then, but I personally doubt it. During these past couple of days there is news coming out from the New York Times about a meeting last June at the New York Trump Tower where Donald Trump Jr., Son-in-law Jarred Kushner, and then Campaign Manager Paul Manafort had an arranged meeting with a Russian lawyer who is well-connected to the Russian government. This meeting seemed to be ‘forgotten’ by all of the Trump ‘team’ that attended, what a coincidence. Paul Manafort is extremely well-connected to the deposed President of UKraine whom was nothing but a Putin proxy who now lives in Moscow. Since Mr. Manafort was forced to step down from being Trumps Campaign Manager he has since registered as a ‘Foreign Agent going all the way back to 2012’ because of his Russian ties just like their former Nation Security Director Michael Flynn had to step down because of lies about his financial ties with the Russian government and with the Dictator Erdogan of Turkey, Flynn has also now registered as a foreign agent.

 

Last fall Jared Kushner met with the Chief Executive of the Russian State owned (VNB) in Moscow. This Bank has been sanctioned by the U.S. and NATO and once this is done we are not supposed to inner act with Officials of sanctioned banks. O, also, Mr. Kushner forgot to mention this meeting too. To me I have an issue concerning Donald Trumps tax returns. With all of these secret meetings with Russian Officials that all these folks lied about under oath it is getting more difficult to believe any thing except this President and his family are simply doing what they have always done they are putting “the Trump Bank Accounts first”, not the American people. Mr. Trump used to brag about his Florida Golf Club being worth one hundred million dollars to his guests yet on his taxes he valued it as being worth one million dollars. Just to be a member there the cost was one hundred thousand dollars per year, when he became President he upped the fee to two hundred thousand per year. If an average citizen of this Country pulled something like that on our taxes we would quickly be convicted of tax evasion and thrown into a Federal Prison for the rest of our lives. I do believe that the Congress and the Senate should do what ever they have to do to make all of the Trump advisers and the President himself required to immediately be forced to release their tax returns for the past ten years. ‘We The People’ have the absolute right to know who our Leaders serve and to know if they are the criminals they appear to be. It does appear that Mr. Trumps slogan should not have been “putting America first” as it should have been “putting the Trump family first, and only.”

 

 

Benefits of Indian cash overhaul elusive as deadline passes

 

(THIS ARTICLE IS COURTESY OF FOX NEWS)

THE AMERICAS

Benefits of Indian cash overhaul elusive as deadline passes

  • In this Thursday, Dec. 29, 2016 photo, an Indian woman, who had come to deposit money, argues with a bank officer in New Delhi, India. On Nov. 8, India yanked most of its currency bills from circulation without warning, delivering a jolt to the country’s high-performing economy and leaving countless citizens scrambling for cash. Still, as Friday’s deadline for depositing old 500- and 1,000-rupee notes draws to a close, Prime Minister Narendra Modi’s government has called the demonetization drive a great success in drawing out tax dodgers and eliminating graft. (AP Photo/Altaf Qadri)

    In this Thursday, Dec. 29, 2016 photo, an Indian woman, who had come to deposit money, argues with a bank officer in New Delhi, India. On Nov. 8, India yanked most of its currency bills from circulation without warning, delivering a jolt to the country’s high-performing economy and leaving countless citizens scrambling for cash. Still, as Friday’s deadline for depositing old 500- and 1,000-rupee notes draws to a close, Prime Minister Narendra Modi’s government has called the demonetization drive a great success in drawing out tax dodgers and eliminating graft. (AP Photo/Altaf Qadri)  (The Associated Press)

Fifty days ago, India yanked most of its currency from circulation without warning, jolting the economy and leaving most citizens scrambling for cash. As the deadline for exchanging the devalued 500- and 1,000-rupee notes for new ones hits Friday, many Indians are still stuck waiting in long bank lines.

Empty ATMs and ever-changing rules are preventing people from withdrawing money, and many small, cash-reliant businesses from cinemas to neighborhood grocery stores are suffering huge losses or going under.

Despite those problems, Prime Minister Narendra Modi says his Nov. 8 demonetization decree has succeeded in uncovering tax evasion and cracking down on graft. The Indian government is urging patience, insisting it’s playing a long game that will eventually modernize Indian society and benefit the poor.

So far, despite the widespread inconvenience and costs, most of the country’s 1.25 billion citizens appear to be taking Modi’s word for it.

Here are a few things to know about India’s massive cash overhaul:

___

HARDSHIP FOR THE POOR

Modi’s announcement that 500 and 1,000 rupee bills — making up 86 percent of India’s currency — were no longer legal tender has posed an enormous hardship for millions of people who use cash for everything from salaries to cellphone charges.

Almost immediately, serpentine lines appeared at banks and ATMs as people waited hours to deposit or exchange old currency notes for new bills. Since authorities only began printing the new bills after the policy was announced, demand vastly exceeds supply and cash machines often run dry. Daily commerce in essentials including food, medicine and transportation screeched almost to a halt.

Worst affected were the country’s hundreds of millions of farmers, produce vendors, small shop owners and daily-wage laborers who usually are paid in cash at the end of a day’s work. Many lost their jobs as small businesses shut down, compounding their poverty.

Pankaj Aggarwal, owner of a clothing shop in the Old Delhi neighborhood of Chandni Chowk says his sales crashed by 70 percent.

“You can imagine what our business is like now. It will be some time before our sales normalize,” he said.

Modi appears to have succeeded in promoting the cash overhaul as a “pro-poor” policy, tapping into deep anger among the have-nots toward wealthy elites.

“The first two months have been so bad for us, we don’t even have enough money to buy food,” said daily wage laborer Neeraj Mishra, 35. “Overall, I think Modi has done some good. People with a lot of money are the ones who have been troubled. I don’t have enough cash for it to bother me much.”

Political scientist Sreeram Chaulia, dean of the Jindal School of International Affairs in New Delhi, describes the strategy as “classic populism.”

“Some people are outraged, but are hesitant to come out and say it because they don’t want to be branded as anti-national or self-centered,” he said.

___

A BRUISED ECONOMY

The wide impact of the demonetization won’t be known until the government issues its next quarterly GDP figures in February, but the Reserve Bank of India already has shaved half a percent from this year’s GDP growth forecast, to 7.1 percent.

Since domestic commerce drives most economic activity, analysts have expressed alarm over the scale of economic and social disruption and are warning a contraction is likely in coming quarters.

“The countless unpredictable consequences that will continue to show in the coming weeks and months mean that it is, in effect, a huge gamble,” said Jan Zalewski, an Asia expert with the Britain-based risk assessment firm Verisk Maplecroft. “Inflicting such huge costs for what is an uncertain outcome is problematic.”

Real estate, tourism, transportation and gold and gems have been hit the hardest, along with informal sectors that rely mostly on cash.

Prices are forecast to rise since the cash crunch is pinching supplies of all sorts of goods.

The country’s banks, however, are seeing banner business. The central bank said old notes worth 13 trillion rupees ($191 billion) had been deposited as of Dec. 10, with many more expected by Friday’s deadline.

That should improve bank liquidity and in turn encourage more lending to boost economic growth.

___

MIXED MESSAGES, CHAOTIC RULES

The Finance Ministry and central bank have issued at least 60 different directives, some of them contradictory, about such issues as how much money can be withdrawn from bank accounts and which documents are needed for depositing old cash. The mixed messages have compounded the overall chaos and shaken investors’ confidence.

“There appears to be less trust in many institutions, including the Reserve Bank and other banks. That is one important behavioral change that has been ushered in,” said Mihir Sharma, senior fellow at the Observer Research Foundation, a New Delhi based think tank.

Financial experts are baffled about how to evaluate the move.

“One of the major problems with the demonetization move is that success is so difficult to measure,” Zalewski said. “In and of itself, it can’t end black money, stop terrorism funding and the counterfeiting of notes.”

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NEW BILLS, OLD HABITS

The idea that swapping old currency notes for new ones would wipe out tax evasion has already been proven naive. Over the last seven weeks, Indian income tax authorities uncovered more than 32 billion rupees ($477 million) in undeclared wealth held in new notes, foreign currency, gold and other commodities.

The Finance Ministry found enormous stashes of new currency bills secreted away by corrupt bank managers. Axis Bank’s CEO Shikha Sharma said she was “embarrassed and upset” after it was found managers at the bank had used the stolen funds to fake accounts and launder customers’ untaxed savings for a premium.

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A GLOBAL TREND?

A month after Modi scrapped the high-denomination notes, Venezuela’s president announced that the 100-bolivar notes that account for more than three-quarters of the country’s cash would be taken out of circulation.

Skyrocketing inflation had taken the value of the Venezuelan notes to 2 U.S. cents from 10 cents in the past year.

But while India’s cash overhaul has been relatively peaceful, Venezuela’s was not.

When no new bolivar notes appeared to replace the old ones, riots and looting erupted in towns across Venezuela, whose economy was already in shambles. Hundreds of grocery stores were damaged or destroyed. Ultimately, the government extended use of the old 100-bolivar notes until Jan. 2.

Venezuelan President Nicolas Maduro declared the abrupt cash overhaul an economic triumph, claiming people were racing to deposit the old notes into banks. He did not say how much was deposited.

In Pakistan, opposition lawmakers passed a resolution last week calling for the withdrawal of the country’s highest-denomination note from circulation. The government rejected that move, saying there was no need to discontinue the country’s 5,000-rupee note, worth about $48.

“The very notion of cancellation of such convenience in transactions is preposterous and unequivocally denied,” the Finance Ministry said in a statement.

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Associated Press writers Fabiola Sanchez in Caracas and Munir Ahmed in Islamabad contributed to this report.

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Follow Katy Daigle and Nirmala George at http://www.twitter.com/katydaigle and http://www.twitter.com/NirmalaGeorge1

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