No. of Recommendations: 12
But I think it comes down to sloppy accounting vs. intent to break the law.
It’s not “sloppy accounting” when you decide to avoid scrutiny by routing the money through a lawyer. And not even though the legal channels that are commonly available through a lawyer (“Client funds”) but through the lawyer’s personal bank account , and requiring you to pay at least an extra 30% for the privilege of doing so.
Why? Because when you are giving that amount to the lawyer “for services”, he has to recognize it as income. When he does so he has to pay taxes on it. So you have to pay him enough to pay the taxes (it actually becomes a reducto ad infinitum because you have to give him enough to pay the taxes on the overage as well, see below), and if there’s anything we know about Trump, he’s not going to pay $200k when the going price for the Catch & Kill is $130k.
Scenario 1: You pay money directly to the porn star: $130k
Scenario 2: You pay money to the lawyer, who segregates it from his income in a “Client fund” account, you pay $130k.
Scenario 3: You pay the money to the lawyer who has to recognize it as income, you pay him $130k, plus 30% of $130k, or another $39,000. Total is now $169k.
But wait, the taxes on $169k are more than the taxes on $130k, so now you have to pay an extra $48,000 to cover the lawyer’s personal taxes. $130k + $48k = Total: $178,000.
But wait, the taxes on $178,000 are more than the taxes on $130k, so how you have to pay an extra $53,400. Total now: 130k + $53,400 = $183,400.
And so on. Each time you increase the total to pay for the taxes, you have to pay taxes on *that* as well. The amount keeps getting smaller (reducto) but it keeps going up cumulatively. It probably tops out somewhere around $200k. (We faced this when calculating “paying the taxes” for prize winners for the HGTV Dream Home, and for other contests I have been involved with over the years at radio stations. At some point, of course, you can just call it “good enough”, but in reality you need to gross up such an amount by around 55-60%, if I recall the math from my bygone days.)
This was not some “sloppy bookkeeping.” This was a conspiracy (more than one person) engaging in criminal activity (false recording of expenses, tax evasion) for the purpose of furthering a political campaign (campaign finance reporting.)
It is a criminal act - unnecessarily so since all he had to do was put it off til after the election and pay her directly or through a lawyer’s Client fund with an NDA.
As I saw one pundit on TV explain “This is not hard to understand. HE DID IT, and he did it with intent.”
