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DC Buzz: Jim Himes and the capital gains conundrum

August 1, 2018

WASHINGTON — If you’re in the seven- or eight-figure income bracket (or, heck, even the high-sixes), the report on the Trump administration looking at tax breaks for capital gains is very good news indeed.

But if you’re a working stiff, then it’s just another day at the office or shop floor.

Southwestern Connecticut has plenty of both kinds — and a lot in between as well. Fairfield County, for instance, is known for having a Grand Canyon-sized income gap — the “epicenter of American inequality,” as “The Atlantic” once put it.

So what does the lawmaker who represents them all think of this idea?

Rep. Jim Himes, D-Conn., certainly has feet in both camps. He has the Goldman Sachs background, to be sure. And lord knows his constituency includes a fair number of veteran coupon-clippers.

But he also has the “do-gooder” box checked off as the Spanish-speaking son of aid workers in Peru and Columbia. And he worked on housing at a New York City non-profit before running for Congress. So there’s plenty of constituents at the low end of the income spectrum who need representation too.

“The preferable treatment that capital gains receive under tax law already disproportionately benefits the very wealthy,” said Himes in a statement. “These proposed changes, allowing individuals to adjust costs to account for inflation, would mean billions more in tax breaks, not for working Americans whose money comes from wages, but for the investor class.”

Take that, Greenwich and Westport!

At this point, the capital gains cut is just an idea percolating in the mind of Treasury Secretary Steve Mnuchin. It’s another facet of the long-held “trickle down” belief among Republicans. Whether it sees the light of day is very much in doubt.

But it is definitely good to know Himes’ answer to the query posed in the old-time union anthem: “Which side are you on?”

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Full disclosure: The press of deadlines and an impending office move here in D.C. prevented me from getting over to the tax-fraud trial of New Britain’s own Paul Manafort at the federal courthouse in Alexandria, Va.

But I’ve covered a few major trials in my days here in DC. So with the help of various news outlets and sources (including a close friend and fellow journalist covering the trial), I managed to cobble together some impressions from afar.

We know that “Russia,” “Trump,” “Mueller” or “collusion” are hardly mentioned in the ninth floor courtroom in Alexandria, a classic row-house community just across the Potomac from D.C. (Still has a Confederate-soldier memorial statue.)

Manafort’s defense attorney, Thomas Zehnle, did his best to paint Manafort as a self-made success, “a second-generation immigrant, the first in his family to go to college.”

No mention, of course, of the senior Paul Manafort’s political dominance in New Britain as Republican mayor from 1965 to 1971, nor Manafort Brothers Construction’s immigrant founder, James Manafort, who established the New Britain House Wrecking Company (now Manafort Brothers construction) in 1919.

The crusty judge, T.S. Ellis III, wants to keep things rolling along in what promises to be a multi-week trial. On Day One, he admonished the prosecutor that being wealthy and spending a lot is not a crime.

That’s too bad for the prosecution because a lot of the jury-appeal for their case rests on the parade of witnesses testifying about luxurious car and clothing purchases, all paid for by sketchy wire transfers from foreign bank accounts.

For the press, it’s a retro-1980s atmosphere with no laptops and no phones allowed in the courtroom. The café across the plaza is charging $4 a day for reporters to stow their stuff for the day. Such a windfall!

The Washington Post reported that during the prosecution’s opening statement, the 12 jurors appeared riveted — with several taking notes. When the defense took its turn, jurors who had taken notes no longer were scribbling.

And a few appeared to nod off a bit. So for Manafort, 69, it’s not breath-holding time. But the trial has far to go so the jury is still out, so to speak.

dan@hearstdc.com

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