Taxing the Wealthy Taxes Everyone But the Wealthy

Of all of Donald Trump’s many promises to average Americans, his promise to tax the wealthy (including himself) is the most disingenuous. Taxing the wealthy is an old communist meme meant to divide the classes and set them upon one another.  A recent wealth redistribution chart illustrated the disappearance of the Middle Class, true to the Socialist model:  there are more wealthy people and there are an equally growing number of poor, with very few people left in the middle.

 

Numerous economists have tried to explain the folly of this economic theory.

 

The National Review’s Kevin D. Williamson recently wrote an article online about the truth of Trump’s bankruptcies – Donald Trump’s Debate Lies:

 

“Trump’s first bankruptcy,” Williamson writes, “was in 1991 after he borrowed a stupidly irresponsible amount of money to finance that monument to excruciatingly bad taste known as the Trump Taj Mahal in Atlantic City. Trump is such a good manager that the casino’s slot machines began failing during its first week of business. Never one to let reality stand in the way of his confidence, Trump had financed the $1 billion project largely with junk bonds, which meant very high interest payments. Trump did not make enough money to meet his interest payment and so was forced into bankruptcy. His ownership of the casino was diluted, and he ended up having to give back 500 slot machines to the company that had provided them.
“Trump himself was on the hook for nearly $1 billion in the deal, according to the New York Times, a sum that exceeded his net worth. He was forced to sell a fair amount of his personal property, including a yacht, as well as the failing air-shuttle service he’d been attempting to launch for some time. As Boston bankruptcy attorney Ted Connolly put it, Trump used the bankruptcy proceedings to negotiate away his personal liabilities while leaving the business saddled with debt. Unsurprisingly, the casino endured further financial problems, including bankruptcy. Trump’s ownership stake was diluted steadily, and he eventually was removed from the board. By the time of the casino’s most recent bankruptcy — which is to say, the bankruptcy it currently operates in — Trump could plausibly say that it wasn’t really his business any more, in spite of the fact that his name and face are all over it. All the slot machines in the world couldn’t support (or fill) the Taj’s 2,010 rooms.  That’s a lot of space.  A lot of heat, electricity, water, and taxes, not to mention maid service, laundry, and bellboys.  With all that room, could the Taj really be profitable, considering the number of competitors lining the boardwalk?  The answer was, “No.”  With approximately 50 regular tables and 25 tournament tables, the Taj Mahal had one of the largest poker rooms in Atlantic City, second in size only to The Borgata. But even that couldn’t save the Taj.

 

Bigger, it turns out, isn’t always better.

 

On Nov. 25, 2014, the Trump Taj Mahal announced plans to close and cease casino and hotel operations on Dec. 12, 2014 but on Dec. 5, 2014 the date was pushed back to Dec. 20, 2014. On Dec. 18, 2014, the Trump Taj Mahal received an agreement with its union to drop its appeal against the company to save the casino and it remains open.

The Taj, Trump’s third property in Atlantic City, was wrapped in controversy prior to opening because of its role, along with Resorts Casino Hotel, in the fight between Donald Trump and Merv Griffin in 1988 over Resorts International. Resorts was developing and constructing the Resorts Taj Mahal Casino north of Resorts Casino Hotel on the boardwalk, but had run out of money and construction was stopped.  Resorts was the first casino to open in Atlantic City (1978) and is still running.  Trump helped bring big name boxing bouts, as well as wrestling matches, to the city to attract customers to his casinos.

Trump was attempting to buy the unfinished resort, along with Resorts, but Merv Griffin would not sell. Eventually, a deal was reached between Trump and Griffin, giving Griffin the Resorts in Atlantic City and the Resorts Paradise Island with the unfinished Taj Mahal project going to Trump. The casino opened in 1990 as the Trump Taj Mahal and was the largest and highest- grossing casino in the city until the opening of The Borgata in 2003. The Chairman Tower opened in 2008, bringing the complex to over 2,000 rooms.

The casino is also the scene for a notorious baccarat session in May 1990, in which the Japanese high roller Akio Kashiwagi lost $10 million is cashiwaggi. The incident was later fictionalized in Martin Scorse’s film Casino. In 2013, the Taj opened the nation’s first casino strip club, featuring scantily clad dancers.

Trump then built the Trump Marina in the Marina area. This casino featured 728 guest rooms and various amenities, including a ball room, health spa, tennis, shuffleboard and basketball courts, and a jogging track.  In addition, it features 640 slips for yachts.  The Taj has since been downsized to 1,250 rooms.  The Trump Plaza offered 906 rooms.  The Trump World’s Fair, the last time it was a casino, went through many iterations as the Atlantis, then the Playboy, and then The Trump Regency before it was torn down in 2000.

 

Of Trump’s many Atlantic City ventures, only the Taj remains, and it’s Trump’s in name only.

 

Although the Taj recovered, minus Trump, Trump Marina helped in the demise of his other Atlantic City properties. Initially offering over 2,000 rooms, the Taj was certainly the elephant in Trump’s casino portfolio.  He filled those rooms mainly on weekends for the boxing and wrestling matches, as well as concerts featuring the likes of Michael Jackson.

 

The smaller Trump Marina appealed to the wealthy with their yachts and their yen for yoga, saunas, and jogging. With fewer rooms, the Marina required a smaller staff, which translated into lower labor costs for higher priced rooms.  Yet it was the Marina that has paid the price; it is now the new Golden Nugget.

 

The Taj was simply too large with too many rooms that stood empty on the weekdays. Whether empty or filled, they still had to be heated and tended to.  The real money, in the heady days of the Eighties, was in the buses that rolled into Atlantic City.  For the price of the bus ticket, gamblers (mainly senior citizens) rolled into A.C. for the day to gamble and gawk at the gawdy, over-the-top interior decorations.  Really, all the casinos were like that.  One was as bad as another.

 

The bus gamblers were the lifeblood of Atlantic City. They came into Atlantic City on buses at virtually no cost to the casinos, gambled their savings away, and then went home.  True, they didn’t rent rooms.  But they sure dropped those quarters into the slot machines.  I watched casino employees take away quarters by the cartload.

 

But those senior citizens, at the time older than my mother by at least 20 years, are all dead now, and my mom just celebrated her 92nd birthday.  The economy is dead, and for intents and purposes, so is Atlantic City.  Today’s wealth senior citizens are living in senior residential clusters such as Cedar Crest in Pompton Plains (again in name only the place is in Pompton Plains; the town made a land trade deal with the town of Riverdale to place the senior center there as part of Pompton Plains).

 

Just north of the I-287 junction, and with plenty of land available where the quarry is busy tearing down Riverdale Mountain, Cedar Crest and another nearby high-density apartment/condo complex would, together, make an idea feeder for a casino to be built on the former quarry grounds.

 

Wealthy high-rollers still frequented the Marina (now the Golden Nugget) and even the now down-sized Taj. But Trump saw the writing on the neon walls.  He’d financed his casinos on junk bonds, loans with high interest rates, which he was unable to repay once the buses stopped rolling into Atlantic City.

 

There’s still money to be made in Atlantic City, but nothing like the heyday of the Eighties.

 

This is what gives the lie to Trump’s (and others’) assertion that taxing the wealthy will get America out of debt. It didn’t work so well in Atlantic City.  Once the middle class northern New Jerseyans and Pennsylvanians stopped coming (Pennsylvania built its casinos in the Poconos and New Jerseyans had moved away with their jobs to South Carolina, where the next primary is to be held tomorrow), Atlantic City hemorrhaged.

 

According to NJ.com: “State lawmakers and officials have been searching for ways to fix the issue. In January, Gov. Chris Christie installed an emergency management team in the city, and its first report called for at least $130 million cuts to the city budget, including the possible layoffs of hundreds of workers.

 

“On Monday, a group of lawmakers introduced a proposal to open at least three casinos in northern New Jersey, partially in an effort to pump money into Atlantic City.”

 

Our state is going to open up at least three casinos here in the northern part of the state, and then send the profits south to bail out Atlantic City? Just who does the state think is going to frequent these casinos?  Well, there are a lot of wealthy Asian Americans here in the north (and central) portions of the state, and do they ever love to gamble.

 

But how is that going to help Atlantic City, except to put it on life support?

 

Once the Middle Class is removed from the equation, you only have the rich and the poor. It’s called “Socialism.”  By the way, Ted Cruz, in his candidate biography, “A Time for Truth”, gives the classic definition of Socialism:  “government ownership or control of the means of production or distribution in an economy.”

 

Get rid of the Middle Class, who only take up room, or in the case of the Taj, they didn’t take up room, eliminate the excess labor and raise the minimum wage on the remaining workers, and allow the wealthy to keep – yes, keep – their money.  Taxing the wealthy is an oxymoron.

 

Their wealth isn’t in wages but in investments and other securities. They can live on their dividends alone.  Half of these wealthy people are now government employees (or lawyers), so it’s in their best interests to support a socialist government.

 

Notice that the wealthy have not disappeared from Atlantic City. Now that the Middle Class bus passengers and week-enders have been dispatched, and half the union staff, there is more room for swimming pools, saunas, and even jogging tracks in the casinos at the Marina.  Still, no matter how much they pay for their rooms, the money doesn’t translate into the resurrection of Atlantic City.

 

If the real supporters of Atlantic City can’t come to the casinos, the casinos will come to them. The state misses the point entirely, of course.  The cost of the bus ride was negligible.  Poor and Middle Class New Jersey residents don’t have the income to gamble any longer.  We don’t even have the jobs.  To be sure, the casinos – wherever they’re built – will bring employment to that area.  But it will be union-based employment, which means the jobs are planned obsolescence; a gamble upon which you cannot build a life.  Just ask the former Atlantic City union members; sooner or later, the casinos will go under.

 

Do we really need or want a Gambler-in-Chief running our country? Someone who promises that taxing the wealthy is the cure for America’s economic woes is running a scam on you.  He’ll win.  The wealthy will stay wealthy.  But you and I?

 

We’ll be lucky to be cleaning rooms and sweeping the floors at Trump’s Federal Hill Hotel and Casino.

 

 

 

 

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Published in: on February 19, 2016 at 3:15 pm  Leave a Comment  

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