May 10, 2019
By Robert Kuttner | May 10, 2019
Trump Got That Right. When The New York Times unearthed ten years of Trump’s tax returns showing losses in excess of $1 billion, Trump indignantly tweeted that this is simply how the real-estate game is played—pile up those paper losses while you make real money.
Trump is right about that. The developer scam allows you to take deductions for depreciation while the property is actually appreciating, and find some other way to offset the capital gain when the building is sold. Not to mention deductions for interest, the “loss” of paying yourself management fees, and a lot more.
It’s a racket, and Trump is the biggest real-estate racketeer of all.
Speaking of which, did you see what Zillow is up to? Zillow has more information on property sales and values than anyone else. Until now, Zillow has profited by using click-bait to generate ads and other digital income.
Now, however, Zillow is in the business of buying and selling properties, on the premise that it knows more about real-estate markets and flipping properties than any of the locals. It’s exactly the same conflict of interest that Amazon engages in when it both provides the platform for other companies’ sales, and markets wares itself, armed with superior knowledge of consumer buying habits.
Senator Elizabeth Warren has proposed a common carrier rules where you either provide the platform or sell products on the platform, but not both. Zillow is the latest example of this abuse.
Earth to the Federal Trade Commission ... anybody home?