Trump Has a Bad Day on the Tax Front

Not everyone is going to agree with that headline. In fact, after the Supreme Court issued (semi-)rulings in Trump v. Vance and Trump v. Mazars, most commenters are framing the result as a "mixed bag," with some good news for Donald Trump and some bad news. We really don't see it that way.

Let's start with the Court's rulings. In Vance, the case that asks whether a president can be criminally investigated while in office, a seven-person majority decreed that, in general, a criminal investigation of a sitting president is acceptable. That said, Roberts—writing for himself and the four liberal justices—noted that there may be some specific investigations that are not acceptable if the president can demonstrate that the particular investigation interferes with their ability to do their job. Justices Brett Kavanaugh and Neil Gorsuch agreed with the overall finding, but wrote a concurrence arguing for a broader range of circumstances in which an investigation could be unacceptable. Consequently, Vance was remanded back to the lower court to figure out if this is one of the instances where a criminal investigation should be quashed. Legal analysts broadly agree that Trump will not be able to make that case. Of course, Trump will appeal the lower court's ruling and in a couple of years the Supremes will get it again. They could have cut out the middle man and just ruled right now, but they didn't. Still, it's only a matter of time until New York County District Attorney Cyrus Vance and his grand jury get the returns.

In Mazars, the case that asks whether Congress has the right to subpoena the president's returns, the decision was also 7-2, with Roberts also writing the majority opinion, and the same justices (Thomas and Alito) dissenting. The Court found that Congress does have broad investigative powers, including subpoena powers, but that those powers must be "related to, and in furtherance of, a legitimate task of the Congress." The Chief Justice attempted to give some guidance on this point, writing that courts must "perform a careful analysis that takes adequate account of the separation of powers principles at stake, including both the significant legislative interests of Congress and the 'unique position' of the President." Put another way, he seems to be saying that all the branches of the federal government are equal, but some are less equal. As with Vance, Roberts remanded the case back to the lower courts, so they can try to figure out exactly what he means, and whether or not Congress' subpoena power is valid in this case. There is little chance that the matter will be resolved anytime soon, and once Jan. 3, 2021, rolls around, the subpoenas expire and would have to be reissued. Given all of these potential roadblocks, Congress almost certainly won't see Trump's taxes before the election, and they may never see them at all, particularly if he becomes ex-president Trump and they decide his returns are no longer of interest.

There is one small wrinkle left in the matter of Trump's taxes, but we think it is not likely. New York State passed a law stating that the chairman of the House Ways and Means Committee, currently Rep. Richard Neal (D-MA), has the right to anyone's New York State tax returns. Trump fought this in court and lost. What Neal could now do is write a letter asking for Trump's New York tax returns and have his chief of staff quietly and personally hand-deliver it to the New York Dept. of Taxation and Finance along with an empty USB stick. He should then wait there until he gets the return. What Neal should absolutely not do is announce his plan. All that will do is trigger another lawsuit and 2-year delay. The NYS law as currently written gives Neal access to the return. All he has to do is ask politely. But we doubt that he will do it.

As soon as the decisions were announced, Trump was on Twitter claiming victory, in the sense that he's in a war with the Deep State, and that he's managed to fight off their latest assault:

The Supreme Court sends case back to Lower Court, arguments to continue. This is all a political prosecution. I won the Mueller Witch Hunt, and others, and now I have to keep fighting in a politically corrupt New York. Not fair to this Presidency or Administration!

— Donald J. Trump (@realDonaldTrump) July 9, 2020

Of course, almost every politician claims victory in almost every circumstance, regardless of how bad the news is. And Trump is the worst offender of this sort in recent memory. So, his opinion doesn't tell us much, especially since even he doesn't really believe it. Moments after sending the above tweet, he also lashed out at the Senate Judiciary Committee (and, by extension, Chair Lindsey Graham, R-SC). As everyone knows, Trump only goes on the attack when he's feeling angry or frightened or both, and not when he's taking a true victory lap.

Now, at this point, let us concede that the fact that Trump's tax returns are not likely to become public before the election is probably a win for him. But it's a pretty hollow win. Keep in mind, first of all, that even if SCOTUS had given Vance and Congress everything they wanted, there was still a pretty good chance the returns would have remained hidden from public view until after Nov. 3. As we noted yesterday, New York law requires that grand jury business remain private. And House Ways and Means Committee Chair Richard Neal (D-MA) and his colleagues would have faced significant political, ethical, and legal downsides if they had let the returns leak.

Beyond that, even if the returns ever do become public, it's actually hard to see what damage they might do at this point, in terms of the 45% or so of Americans who are still considering voting for Trump. Consider:

• Perhaps the returns give evidence of Russian entanglements. That would certainly enrage half the country, but the slightly less than half that is still with Trump has been presented with crystal-clear evidence of an inappropriate and corrupt relationship with Ukraine, and did not care one bit.
  
  
• Maybe the returns show he's not very charitable. He's not very Christian, either, and yet the evangelicals are overwhelmingly behind him. His lack of charity would be excused in the same manner as his lack of honesty, or his lack of fidelity to his wives: "He doesn't need to follow the Bible to be the Biblical candidate."
  
  
• Very possibly, the returns show he's not a billionaire. Lengthy tax returns, and large business empires, are both complex enough that it would be easy to spin this away. "Of course the tax returns don't reflect his full net worth," Sean Hannity would say. "Who wants to pay taxes on all of that?"
  
  
• Very possibly, the returns show he's broken the law. For example, if Trump declared the payments to Stormy Daniels as a business expense and deducted them, that would be a felony. But while such white-collar crimes have a lot of teeth in court, since they are eminently provable (remember, Al Capone went up the river for tax evasion), they generally don't have much political bite.
  
  
• Almost certainly, the returns show he's cut corners or otherwise cheated on his taxes: We already know this, thanks to the stories in The New York Times that Mary Trump served as a source for. Nobody in the base cares; in fact, they see it as evidence of his skill at "working the system."

And actually, it's at least possible that keeping the returns hidden could end up doing Trump more political damage than revealing them. First, because instead of giving people a clear (and possibly not all that upsetting) answer as to what the President is hiding, the current situation invites people to fill in the blanks for themselves. Second, because the unfulfilled promise to reveal the returns "once my audit is over" will linger over his head until Election Day, and will be wielded by opponents as a sign of Trump's being dishonest and/or hypocritical, as well as a clear case of him failing to live up to his promises.

So again, a very hollow victory (at best). Meanwhile, Trump also lost big-time on two fronts. The first is that the criminal investigation of him will almost certainly go forward (and even if this one somehow gets dismissed, there will be others). Every night, before he goes to sleep, he will get to think about the fact that the long arm of the law is after him, and that the particular long arm that is closest to grabbing his collar is immune to the presidential pardon power. Further, if he is reelected, then this will be the big story of the first year of his second term. The investigation will happen, indictments will likely be issued and, at some point, Trump's returns will become a matter of public record (once they are a court exhibit as opposed to grand jury evidence). The odds of conviction are high. Can a convicted felon continue to serve as president? That is a question that Senate Republicans (if there is an impeachment v2.0) or John Roberts do not want to be asked to answer.

On top of that, and more broadly, the Supreme Court took Trump's theory of executive power and tossed it in the garbage. The case he made, in so many words, was "L'état, c'est moi." However, John Roberts and six of his colleagues declined to give Trump king-like power (and king-like immunity from scrutiny). Given Thursday's rulings, Trump may be able to fight off some investigations and some subpoenas on a case-by-case basis (assuming he can finally find a lawyer who can write a proper legal brief). However, he's not going to be able to defeat them all by simply waving his hands and telling AG Bill Barr to make them go away. And given the many and varied ways he's either broken the law or pushed it to the breaking point, Trump's eventually going to get popped if he remains president beyond January of next year. Multiple times, in fact. And so, the President's odds of winning a second term may have nominally improved on Thursday, because he will be able to keep his tax secrets a little longer. However, he also got himself a guarantee that even if he secures that second term, it's going to be even messier and more legally fraught for him than the first one. (Z)

Stone, Meet Iron

As long as we are on the subject of felons and pardons, Roger Stone would very much like to stay out of prison until the end of the year. He knows full well that if he can just remain a free man until Nov. 4, Donald Trump can issue a pardon with significantly reduced concern for consequences, regardless of what happens in the election. Anytime before that, and it's trickier for the President, since he's already flailing in the polls, and since a Stone pardon would reiterate the not-so-great message that friends of Donald Trump (Joe Arpaio, Michael Flynn, etc.) are above the law. So, Stone has asked for his prison term to be delayed until late September, due to the issues raised by COVID-19. Should the request be granted, Stone may suck it up and serve a few weeks, or he may try to find a new excuse, or he may simply hide out in his house and fail to report.

Yesterday, the Justice Department weighed in on the request, and advised the court that...it does not support a delay, and they would like to see Stone begin his term on Tuesday, as scheduled. That's something of a surprise; presumably Bill Barr was not consulted. Whatever the case may be, it certainly appears that Stone's delay-of-game strategy is about to stop working.

What that means, in turn, is that the rubber is about to meet the road for the President. He really does not want to let Stone end up behind iron. First, because that would be a painful reminder of the limits of his power. Second, because he prefers to communicate the message: "Stay loyal to me (as Stone has), and I'll take care of you." If folks who have dirt on Trump think he'll let them go up the river, they may choose to sing so as to save their own hides.

Of course, the political cost of pardoning Stone remains. And so, the big debate in the White House this weekend is going to be: pardon or prison. Reportedly, White House insiders like Jared Kushner and Brad Parscale are pushing for no pardon. On the other hand, outsiders like Sean Hannity and Tucker Carlson are pleading Stone's case to the President. Trump is apparently leaning toward helping Stone, and the likeliest outcome is that the Donald commutes the sentence but does not issue a pardon. That would keep Stone out of prison, but allow Trump to claim he's a "law and order" president, since Stone would still have a criminal record. Presumably that will be satisfactory to the base, but we doubt too many others will be impressed if the President parses things like that.

There is one other complication, and there is simply no way to gauge how aware, or concerned, the White House is when it comes to this particular issue. However, there is an argument that Stone remains part of an ongoing conspiracy which, if true, would itself be unpardonable (since it's an ongoing and future crime, and not a past crime). Further, by issuing the pardon, Trump might potentially be exposing himself to charges of conspiracy, obstruction of justice, and conspiracy to obstruct justice. It's possible that the lawyers who advise the President don't put any stock in this argument. It's also possible that Trump might assume his usual "long-term consequences be damned" posture. But on the day that the Supreme Court made very clear that no president is above the law, no matter what this current president might think, one would imagine that this little problem would, at very least, give Team Trump pause. (Z)

Time to Shift Gears on the Coronavirus?

In the eyes of the majority of Americans, Donald Trump's COVID-19 response has been wanting. And his strategy, (if you want to call it that), of dismissing the pandemic is not going well as the number of new cases and the number of deaths continue to climb at a frightening rate. A big part of the President's messaging, which he's also imposed on underlings like VP Mike Pence, has been his refusal to wear a mask. That particular decision, which has significant real and symbolic implications, has aggravated many voters (particularly seniors) while also giving to Joe Biden, on a silver platter, a gift-wrapped opportunity to set himself up as the "reasonable" alternative to Trump.

This weekend, Trump will visit Walter Reed hospital to chat with combat veterans and health care workers who have been coping with COVID-19. And on Thursday, reporters asked the obvious question: Will you wear a mask? Since Trump, Pence, et al., have been willing to go maskless even in the most inappropriate of circumstances (at hospitals, at manufacturing plants making medical supplies, etc.), it was entirely possible the President would once again decline. However, his response was: "I expect to be wearing a mask when I go into Walter Reed. You're in a hospital setting, I think it's a very appropriate thing." That is a pretty aggressive 180 from his previous position(s) on the matter.

It is certainly possible that this is a one-time thing, since both a hospital and veterans are involved. On the other hand, this could also be the beginning of a shift in Trump's approach to COVID-19. It's possible that other folks in the Republican Party, who have repeatedly told the President that the "denial" strategy is doing enormous harm, both practically and politically, are finally getting through. It's also possible that the COVID-19 diagnoses of Trump Jr. girlfriend Kimberly Guilfoyle and/or Brazilian president Jair Bolsonaro and U.K. Prime Minister Boris Johnson have spooked Trump Sr., and persuaded him that, as an overweight man in his 70s with hypertension, he needs to manage his risk more carefully.

In any event, it's something to keep an eye on. Again, maybe this is just a blip on the radar. But if this does prove to represent a substantive change in approach, then it will be interesting to see if changing gears wins back a few of the folks who are aggravated by the cavalier approach. Or if, alternatively, it alienates a few of the folks who have been playing the denial game alongside the President. (Z)

CDC Won't Play Ball, After All

Speaking of COVID-19 denial, it was reported on Wednesday that the CDC was going to bow to pressure from the Trump administration, and was going to issue new guidelines for school re-openings. Not so much, as it turns out. On Thursday, CDC Director Dr. Robert Redfield said that while additional "reference documents" would be provided, the original guidelines would remain in place.

Perhaps the original story was reported incorrectly. Or, maybe the folks at the CDC decided they could not be party to a scheme that might lead to sick or dead children. Or, as with the mask that Donald Trump will apparently wear this weekend at Walter Reed (see above), maybe this is a sign the administration is changing direction. Whatever the case may be, it does not bode well for the long-term viability of the administration's "all is well, back to normal" messaging. (Z)

Maybe Jacksonville Won't Play Ball, Either

Ever since the RNC, acting on Donald Trump's orders, relocated the Party's convention from Charlotte to Jacksonville, all sorts of potential issues have reared their heads. The latest is a lawsuit from several Jacksonville attorneys, who have filed a court complaint arguing that the convention is "a nuisance injurious to the health (and) welfare of the city." They ask that an injunction be issued forbidding the RNC from congregating there.

A similar lawsuit was filed in Charlotte, and quickly dismissed a few weeks ago. So, maybe the suit has no merit. On the other hand, Charlotte was a hypothetical COVID-19 hotspot, while Jacksonville is an actual hotspot, so that could change the equation. Further, different municipalities obviously have different laws, so that which did not pass muster in one place might be fine and dandy in another.

Even if the suit goes nowhere, the convention is still crumbling in various other ways. The possibility of a packed, maskless, indoor convention is growing slimmer and slimmer. The Party may move things outdoors, in hopes of persuading people that they can attend without endangering their health (too much). Meanwhile, Republican senators continue to RSVP "no, thanks!" The latest to decline is Sen. Pat Roberts (R-KS), who said he just didn't manage his schedule quite right, and he somehow booked other commitments right when the convention is scheduled to take place. Ope! (That's "Oops!" in Kansan).

Roberts is the sixth GOP senator to opt out; five of the six have offered up no explanation, or an explanation that is implausible (like Lamar Alexander, TN, who said he wanted to give others a chance to attend, or Susan Collins, ME, who said she never attends conventions when she's running for reelection). The only "no" who admitted that their non-attendance is COVID-19 related is Sen. Chuck Grassley (R-IA). Still, if the folks in the upper chamber overwhelmingly opt out, regardless of their official reasons for doing so, it will be another notable reminder that things are not normal this year, no matter what the party line is. (Z)

Biden Speaks

Joe Biden does not often emerge from the basement of his Delaware home. But when he does, he tries to make it count. He knows full well that many of the votes he gets in November will be votes against Donald Trump, more than anything else. However, it helps if a vote for Biden is also a vote for something, and the candidate is doing what he can to communicate what that something is. His planned economic agenda was the specific something he talked about when he delivered an address in Dunmore, PA, on Thursday.

The bulk of the speech was aimed at the sort of blue-collar voters that were once loyally Democratic, but that broke for Trump in 2016. Starting with the general observation that Trump talks a good game but doesn't deliver, Biden said he wants to tighten the rules for what qualifies as "made in America" and give out $400 billion in government contracts for U.S.-made goods. He also talked about job creation, and investing $300 billion in research to compete with the Chinese in the areas of clean energy, biotechnology and artificial intelligence. Biden also broadly affirmed his support for labor unions, said he would examine the tariffs Donald Trump has imposed on a case-by-case basis, and promised that further "pillars" of his economic plan will be forthcoming.

Again, this is mostly aimed at blue-collar, rust-belt types. That said, there are dibs and dabs there that could be music to the progressive wing's ears, like the talk of investment in clean energy, or general remarks on wealth inequality as a serious social problem. One imagines there will be a few more concrete things for that wing in the future pillars, as well, particularly once Rep. Alexandria Ocasio-Cortez' (D-NY) climate task force has an opportunity to present its views on environmental justice to the candidate. Still, it's clear which group of voters Team Biden thinks is most critical to their chances. (Z)

It Sure Looks Like the Democrats Are Unified

In his latest column, The New York Times' data guru Nate Cohn points out something rather significant: according to the newest Times/Siena College poll, Joe Biden has the overwhelming support of Democratic voters, regardless of who those voters cast their ballots for in the primary. Here are the numbers:

Primary candidate	Now support Biden	Now support Trump	Now support someone else	Margin
Elizabeth Warren	96%	0%	4%	Biden +96%
Joe Biden	96%	1%	3%	Biden +95%
Pete Buttigieg	92%	3%	5%	Biden +89%
Bernie Sanders	87%	4%	8%	Biden +83%
Mike Bloomberg	81%	8%	11%	Biden +73%
Amy Klobuchar	82%	9%	9%	Biden +73%

Technically, these numbers tell us that Biden is actually doing better with Democrats who voted for Sen. Elizabeth Warren (D-MA) in the primary than he is with Democrats who voted for...Joe Biden. What they really tell us, however, is that the Party is closing ranks around him, and that the odds of another 2016, with lots of Democrats casting protest votes against their Party's candidate, are growing smaller. This data also supports the general strategy of tacking a little toward the center (see Biden's speech above), as opposed to lurching leftward. There are clearly more votes to be won among centrists/independents than among progressives, particularly when we're talking about the sort of pragmatic progressives who voted for Warren.

As if on cue, former high-ranking members of Sen. Bernie Sanders' (I-VT) campaign announced on Thursday the formation of two new super PACs that will try to persuade the Latino voters who supported Sanders so loyally to throw their lot in with Team Biden. Nuestro PAC and America's Progressive Promise will hit the ground running with a seven-figure ad buy in Arizona, Michigan and North Carolina, and commercials in Spanish and English that will focus on Donald Trump's response to COVID-19. They might want to study The Lincoln Project's YouTube channel for pointers. (Z)

Today's Presidential Polls

Alaska has a reputation as a red state, but they're a lot like Montana, with a centrist/populist streak, and so are open to voting for certain kinds of Democrats (and against certain kinds of Republicans). They had a Democratic governor (Tony Knowles) as recently as 2002, and an independent governor (Bill Walker) as recently as 2018. They also had a Democratic senator (Mark Begich) as recently as 2015. All of this is to say that the result of this poll, while surprising, isn't totally outside the realm of possibility.

No matter how close Alaska gets, the presidential candidates won't spend much time or money campaigning there. It's too cold, the population is too small and scattered, and it's too far away. But if The Last Frontier really is in play, or is even close to being in play, that is a bad sign for the GOP.

In contrast, North Carolina is probably going to get more attention than any state besides Florida, and maybe Georgia. (Z)

State	Biden	Trump	Start	End	Pollster
Alaska	45%	48%	Jul 07	Jul 08	PPP
North Carolina	50%	46%	Jul 07	Jul 08	PPP

Today's Senate Polls

While presidential candidates aren't going to campaign in Alaska, the Senate candidates will. And if Minority Leader Chuck Schumer (D-NY) and the DSCC have polling that tells them the state's Senate seat really could be in play, they will absolutely spend some cash on that. After all, a Senate seat in Alaska is worth just as much as one in Texas. Alaska was not polled much in 2016, but that looks like it will have to change in 2020, so we should find out if this poll is for real or is wonky. (Z)

State	Democrat	D %	Republican	R %	Start	End	Pollster
Alaska	Al Gross	34%	Dan Sullivan*	39%	Jul 07	Jul 08	PPP
North Carolina	Cal Cunningham	47%	Thom Tillis*	39%	Jul 07	Jul 08	PPP

* Denotes incumbent

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