New LA County committee to focus on complaints against sheriff's department
Arcadia voters approve $358M bond measure for school district
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How billionaires have sidestepped a tax aimed at the rich By Paul Kiel, ProPublica
Photo by Giorgio Trovato on Unsplash
when he sold the Los Angeles Clippers to Steve Ballmer for $2 billion in 2014. But others eluded the tax in ways that raise questions about how the law is being enforced. One clear target of the new tax was investment professionals who rack up capital gains. Yet ProPublica found examples in the IRS data of financiers who claimed outsize profits but did not pay the tax. Tax experts contacted by ProPublica said they couldn’t think of a legitimate reason why those individuals
were exempt. Lynn Tilton, a hard-charging private equity manager, who has been dubbed the “diva” of distressed asset investing, is one example. The biggest avoider of the new tax in the data was Jeff Yass, the Republican megadonor who sits atop one of the most profitable trading firms in the world. Both Medicare tax and its twin, the Net Investment Income Tax, as the new levy was called, are easily avoided See Tax records Page 04
by business owners. Earlier this month, ProPublica revealed how some of Wall Street’s most powerful people use a loophole to avoid paying Medicare tax on their share of their firms’ profits. Eliminating these ways around the taxes, as House Democrats proposed to do in a 2021 bill, would raise an estimated $250 billion over 10 years. Medicare, the federal program that provides health care for some 68 million seniors, is projected to run short of money in 2036. “It becomes a pretty glaring problem when you have ultra-rich individuals layering loopholes on top of loopholes to dodge both the NIIT and Medicare taxes,” said Sen. Ron Wyden, chair of the Senate Finance Committee, in a statement. “To the nurse or the janitor whose taxes come straight out of their paychecks, it’s ridiculous to see these examples of fabulously wealthy individuals enjoying huge windfalls and continuing to avoid paying a fair share.” The NIIT, together with its holes, entered the tax code as part of the Obama administration’s push to pass the Affordable Care Act. In need of ways to help pay for a major expansion of government health care subsidies, Democratic lawmakers embraced the idea of this new tax on investments. The aim was to level the playing field. All workers pay
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LA County board declares emergency over juvenile hall, defies state's shutdown order By Joe Taglieri
This story was originally published by ProPublica. ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox. Series: The Secret IRS Files: Inside the Tax Records of the .001% Fourteen years ago, Congress set out to remedy a basic unfairness in the tax code. The tax that funds Medicare, because it’s aimed mainly at wages, hits even the poorest American workers. But the wealthy could easily avoid paying their share. So lawmakers created a new type of Medicare tax to capture the kinds of income the rich often enjoy: interest, dividends and capital gains from investments. A host of billionaires — sports team owners, oil barons, Wall Street traders and others — have managed to avoid paying it, ProPublica found. To study who was actually paying the new tax, ProPublica analyzed its trove of IRS data containing information on thousands of the wealthiest Americans. We identified 17 people who, in the first six years of the law, 2013 through 2018, each shielded at least $1 billion in capital gains from the tax. Together, this small group, by collectively exempting more than $35 billion, saved about $1.3 billion in taxes. Most members of the group were able to sidestep the tax because of a huge gap written into the law, which allows owners to exempt gains from the sale of their businesses. They include Donald Sterling, the disgraced former NBA team owner who avoided the tax
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joet@beaconmedianews.com
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he Board of Supervisors declared a local emergency last week to keep Los Angeles County's one juvenile hall operating after state regulators ordered the facility to close. The Dec. 17 proclamation, introduced in a motion by Supervisors Kathryn Barger and Hilda Solis and passed with a 5-1 vote, instructs county attorneys and staff to do a series of actions necessary to keep Los Padrinos Juvenile Hall in Downey operating. Supervisors focused their call to action on increasing staffing, based on the notion that chronically insufficient numbers of probation officers during shifts are commonplace and the root of the troubled hall's problems. Supervisors heard hours of public comments calling the action racist and a failure to demand accountability prior to the proclamation, which initially called for county attorneys to take all actions necessary to prevent detained youth from being released from the facility due to the state's closure order. The board amended it to instruct the Probation Department to explore alternative options for housing Los Padrinos detainees accused of nonviolent offenses, such as release to communitybased step-down facilities See Juvenile hall Page 27
or to their homes with appropriate monitoring. Barger said the emergency declaration was a "drastic" response to a dire situation — the state ordered the Los Padrinos closure when the county has no alternative location to transfer the approximately 240 youth detained there. Los Padrinos has been plagued with management and operational issues since it reopened last year to house youth from Central Juvenile Hall in Boyle Heights and Barry J. Nidorf Juvenile Hall in Sylmar, both of which the state ordered the county to close. State regulators have identified issues at Los Padrinos that include shortstaffing, attempted escapes and allegations of violence among youths detained at the facility, sometimes witnessed by probation officers who allegedly did not intervene. In October, the Board of State and Community Corrections, which oversees detention facilities, determined Los Padrinos was unsuitable to house youth and set a Dec. 12 deadline for the LA County Probation Department to correct staffing deficiencies or close the facility. In October, the Board of State and Community Corrections, which oversees