The battle between Trump and the Democrats in the House of Representatives shows no signs of abating and is in fact getting worse.
The House Ways and Means Committee issued a demand followed by a subpoena for Trump’s tax returns. The White House, Treasury and IRS all refused to provide the returns on the basis that the House had no legitimate legislative purpose and was only requesting the information to harass the president. That matter is currently in litigation.
But Trump’s enemies were not prepared to wait out the litigation. As reported in this article, the Democrat-controlled legislature in New York state and Democratic Gov. Andrew Cuomo worked together to pass a new law that permits the New York tax authorities to hand over state tax returns upon the request of committees of the U.S. House.
Since state and federal tax returns contain many similar entries, this is a backdoor way to deliver Trump’s personal tax returns to his enemies by using state returns instead of federal returns. Where there’s a will, there’s a way!
This New York state law provision may be unconstitutional under the U.S. Constitution as an illegal “bill of attainder.” That’s a law aimed at a single individual (Trump) rather than the population as a whole. No doubt, that argument will form the basis of even more litigation.
Even if the law is upheld, it’s a signal to investors that your tax information is not safe in New York and if you are singled out as a political enemy, you can expect the same treatment. That’s a good reason to avoid New York entirely when it comes to business expansion and new investment.
More to the point, it shows the war between Trump and his political enemies is now at a point where the federal government has become dysfunctional. That’s a good reason to avoid stocks and risky assets while increasing allocations to cash, hard assets and private equity.
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