“Lifestyle Investments For The Rich And Famous”: When Charity Begins At Home, Particularly The Homes Of The Wealthy
It’s charity time, and not just because the holiday season reminds us to be charitable. As the tax year draws to a close, the charitable tax deduction beckons.
America’s wealthy are its largest beneficiaries. According to the Congressional Budget Office, $33 billion of last year’s $39 billion in total charitable deductions went to the richest 20 percent of Americans, of whom the richest 1 percent reaped the lion’s share.
The generosity of the super-rich is sometimes proffered as evidence they’re contributing as much to the nation’s well-being as they did decades ago when they paid a much larger share of their earnings in taxes. Think again.
Undoubtedly, super-rich family foundations, such as the Bill and Melinda Gates Foundation, are doing a lot of good. Wealthy philanthropic giving is on the rise, paralleling the rise in super-rich giving that characterized the late nineteenth century, when magnates (some called them “robber barons”) like Andrew Carnegie and John D. Rockefeller established philanthropic institutions that survive today.
But a large portion of the charitable deductions now claimed by America’s wealthy are for donations to culture palaces – operas, art museums, symphonies, and theaters – where they spend their leisure time hobnobbing with other wealthy benefactors.
Another portion is for contributions to the elite prep schools and universities they once attended or want their children to attend. (Such institutions typically give preference in admissions, a kind of affirmative action, to applicants and “legacies” whose parents have been notably generous.)
Harvard, Yale, Princeton, and the rest of the Ivy League are worthy institutions, to be sure, but they’re not known for educating large numbers of poor young people. (The University of California at Berkeley, where I teach, has more poor students eligible for Pell Grants than the entire Ivy League put together.) And they’re less likely to graduate aspiring social workers and legal defense attorneys than aspiring investment bankers and corporate lawyers.
I’m all in favor of supporting fancy museums and elite schools, but face it: These aren’t really charities as most people understand the term. They’re often investments in the life-styles the wealthy already enjoy and want their children to have as well. Increasingly, being rich in America means not having to come across anyone who’s not.
They’re also investments in prestige – especially if they result in the family name engraved on a new wing of an art museum, symphony hall, or ivied dorm.
It’s their business how they donate their money, of course. But not entirely. As with all tax deductions, the government has to match the charitable deduction with additional tax revenues or spending cuts; otherwise, the budget deficit widens.
In economic terms, a tax deduction is exactly the same as government spending. Which means the government will, in effect, hand out $40 billion this year for “charity” that’s going largely to wealthy people who use much of it to enhance their lifestyles.
To put this in perspective, $40 billion is more than the federal government will spend this year on Temporary Assistance for Needy Families (what’s left of welfare), school lunches for poor kids, and Head Start, put together.
Which raises the question of what the adjective “charitable” should mean. I can see why a taxpayer’s contribution to, say, the Salvation Army should be eligible for a charitable tax deduction. But why, exactly, should a contribution to the Guggenheim Museum or to Harvard Business School?
A while ago, New York’s Lincoln Center held a fund-raising gala supported by the charitable contributions of hedge fund industry leaders, some of whom take home $1 billion a year. I may be missing something but this doesn’t strike me as charity, either. Poor New Yorkers rarely attend concerts at Lincoln Center.
What portion of charitable giving actually goes to the poor? The Washington Post’s Dylan Matthews looked into this, and the best he could come up with was a 2005 analysis by Google and Indiana University’s Center for Philanthropy showing that even under the most generous assumptions only about a third of “charitable” donations were targeted to helping the poor.
At a time in our nation’s history when the number of poor Americans continues to rise, when government doesn’t have the money to do what’s needed, and when America’s very rich are richer than ever, this doesn’t seem right.
If Congress ever gets around to revising the tax code, it might consider limiting the charitable deduction to real charities.
By: Robert Reich, The Robert Reich Blog, December 12, 2013
“Jesus, Santa Claus, And Race”: Conservative Secularism And The Pride Of White Identity
It’s probably appropriate that an anchor on the media network which annually gives us the maddening agitprop over the “War On Christmas” has kicked up a stir by insisting that Jesus Christ and Santa Claus were (and presumably “are” for believers) white folks, just like most Fox viewers. Politico‘s Hadas Gold has the story:
On Wednesday night Megyn Kelly declared on her Fox News show that both Santa Claus and Jesus were white. Discussing a piece in Slate by Aisha Harris about a black versus white Santa, Kelly that “just because it makes you feel uncomfortable it doesn’t mean it has to change.”
“You know, I’ve given her her due. Just because it makes you feel uncomfortable doesn’t mean it has to change,” Kelly said. “Jesus was a white man, too. It’s like we have, he’s a historical figure that’s a verifiable fact, as is Santa, I just want kids to know that. How do you revise it in the middle of the legacy in the story and change Santa from white to black?”
Santa Claus can be traced to a real life monk named St. Nicholas who lived in what is today Turkey, according to the History Channel. Jesus Christ was born to a Jewish family around what is now Israel, and his race has long been debated with several scholars saying he likely looked like what many modern day people of Middle Eastern descent look like.
The unusual segment, where the panelists also debated whether Santa Claus should be a penguin as Harris writes in her piece, seemed to be directly contradicting what Kelly said on Monday when she appeared on “The Tonight Show with Jay Leno.”
“I’m a straight news anchor, I’m not one of the opinion hosts,” she told Leno. “The way we do it on the Fox News Channel is the straight news anchors like us give a hard time to both sides.”
It seems especially idiotic to claim a race for a mythical figure like Santa Claus. As for Jesus Christ, we have the authority of a fellow named Paul of Tarsus (Galations 3:28):
In Christ Jesus, you are all children of God through faith. As many of you as were baptized into Christ have clothed yourselves with Christ. There is no longer Jew or Greek, there is no longer slave or free, there is no longer male and female; for all of you are one in Christ Jesus.
So who cares to what race–or for that matter, gender–the “historical Jesus” belonged? The principal of absolute equality before God is a central principle of Christianity–or at least forms of Christianity that haven’t succumbed to the secularism (yes, that’s what it is, folks) that associates the faith with cultural or political conservatism or the pride of white identity.
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, December 12, 2013
“Higher Profits, Smaller Paychecks”: Corporations Increasing Profits At The Expense Of Workers
Two cheers for the comeback of American manufacturing. Or maybe just one.
The manufacturing sector has experienced a modest renaissance since it hit bottom during the Great Recession. The number of manufacturing jobs is set to rise this year, as it has every year since 2010. Profits are soaring — in 2012, after-tax profits of manufacturing firms hit a record high of $289 billion. Share values have soared with them. The Standard & Poor’s 500 Industrials Index has risen 59 percent more than the overall 500-stock index since 2009, Bloomberg reported last month.
Wages, however, are falling. Although the average wage for all workers, adjusted for inflation, has declined by about 1 percent since May 2009, Bloomberg reported, it has declined by 3 percent for workers in the more-profitable-than- ever manufacturing sector.
Numbers like these explain the epic drama playing out in Washington’s Puget Sound region, from which Boeing, long the area’s dominant employer, has threatened to at least partially decamp. Several weeks ago, with the reluctant blessing of union leaders who feared the company might relocate production, Boeing presented its workers with an ultimatum: Either they had to agree that the new hires who would build the company’s new 777X passenger jetliner would have to work for 16 years, rather than the current norm of six, to bump up to full union scale, or Boeing would build the plane elsewhere. Instead of making roughly $28 an hour to build one of the world’s most sophisticated pieces of machinery, workers would make roughly $17 an hour, or less, until they’d put in a decade and a half on the job.
By a 2-to-1 margin, the workers rejected their leaders’ recommendation and voted down the offer. Boeing then initiated a bidding war to see how much in tax breaks it could wring from states that wanted the work. More than a half-dozen states have sent in bids, some with side agreements from local unions that members would work at reduced rates, some with no such agreements because unions barely exist in their states.
It’s not as if Boeing is a clothing manufacturer scrambling to meet the price competition of rivals that make their goods in Bangladesh. Boeing’s sole competitor in the large-scale passenger-plane market is Airbus, the European conglomerate whose workers’ wages are comparable to those in the United States. But Boeing has already located one major plant in South Carolina, where workers make about $10 an hour less than their Puget Sound counterparts. It’s through such moves, and the threat of further such changes, that U.S. manufacturers have increased their profits at the expense of their workers’ paychecks.
None of the workers at either end of Boeing’s pay scale makes anything like the federal minimum wage, but I suspect the anxiety instilled by these kinds of stories is one reason there is wide, and growing, support for raising the minimum wage. It takes no great imaginative leap to see a time in the not-too-distant future when the incomes of all but a fortunate, talented tenth of the U.S. workforce are reduced or held stagnant. Indeed, the median inflation-adjusted salary for American men is already lower today than it was in 1969. Tyler Cowen, a heterodox libertarian economist, has written that the U.S. economy is morphing into one in which 10 to 15 percent of the workforce will be wealthy and the remainder will resign themselves to making do with less. He foresees little likelihood that the eradication of the broad middle class will lead to a United States “torn by unrest.”
I am not sure that the docility of the American people can be so readily assumed. The adoption of minimum-wage increases and living-wage ordinances throughout increasingly liberal cities and blue states suggests that where workers have the capacity to rebalance the economy through legislation, they’ll do just that. With the near-elimination of unions from the private-sector economy, legislation remains the sole means available for workers to bargain for their fair share of their company’s revenue, particularly in sectors, such as retail, that can’t really relocate. That’s why the victories of those workers demonstrating at Wal-Mart and fast-food outlets have taken the form of legislated increases in local minimum wages, rather than resulting in union contracts.
The fight for higher minimum wages may be just the beginning of a long battle to rebalance the economy. If laws are not changed to enable workers to form unions without fear of being fired, the battle for higher median, not just minimum, wages will eventually be fought in the legislative arena as well. Profits that come at the expense of downwardly mobile workers may find little honor — or legislative support — in their own country.
By: Harol Meyerson, Opinion Writer, The Washington Post, December 13, 2013
“Good Girls Don’t Have To Pay”: Michigan’s Shameful “Rape Insurance” Plan
No one plans to get raped, to be the victim of incest or to find herself pregnant when her birth control fails or was not used (something that is a joint responsibility, which lawmakers trying to legislate sex sometimes forget). So why would anyone buy abortion insurance? Who plans for such a thing?
Yet, this is exactly what Michigan’s legislature is requiring women to do. Using a rare procedural tactic, the state’s legislature is forcing – without the signature of the governor, conservative Republican Rick Snyder – women to obtain “abortion insurance” even before they get pregnant. The idea is so extreme that even Snyder opposes it. And it flies in the face of perhaps the most important part of the Affordable Care Act, that which prohibits insurance companies from denying coverage due to “pre-existing conditions.”
It’s similar to policies some people have had prior to the passage of the ACA, policies that, for example, demanded people buy special cancer insurance just in case they get the serious illness. Who thinks he or she will get cancer? But if you do, and you don’t have the coverage to pay for the very expensive treatment, you’re dead. Maybe literally.
What makes the Michigan law so hateful and misogynist is that it has little to do with actual cost; abortions don’t cost as much as chemotherapy and tumor-removal surgery. It’s about shaming women, insisting that they brand themselves with a big scarlet A on themselves to show they think they may be just the sort of irresponsible whores who might need abortion access at some point. Good girls, apparently, don’t have to pay, since they won’t be having sex.
And what about cases of rape or incest? It shouldn’t matter, since the decision to have an abortion ought not be based on whether the female in question is a victim or sexually active. But women and girls – some of whom might be too poor to pay for an abortion or too scared to come forward after an assault – will have to pony up for an abortion or pay in advance.
This raises some interesting issues for the defense, should a female report a rape or incest to police. So, Miss Slutsmith, you purchased abortion insurance. Should we not infer that you were planning to get pregnant – and could not possibly have been raped or abused by a male relative?
But then again, the law doesn’t address men’s sexual health. It doesn’t insist that men pay in advance, for example, for treatment for sexually transmitted diseases or for Viagra. They get to have sex without consequence, unlike the women. They don’t have to give up their privacy and undergo the humiliation of paying extra to deal with erectile dysfunction or gonorrhea. But for the women – shame! The word is appropriate here. But it ought to be directed at the Michigan legislature.
By: Susan Milligan, U. S. News and World Report, December 13, 2013
“A Year After Newtown, Little Has Changed”: Don’t Blame Fate, Blame These Politicians
The first anniversary of the massacre of 20 children and six adults at Sandy Hook Elementary School weighs heavily, above all, for the unfathomable nature of the crime and unfathomable grief of the families. Adding to that weight, though, is the demoralization over the fact that the massacre has not led to any broad national policy response to the problem of gun violence. If there is any doubt that this failure had exacerbated the pain of the families, consider this haunting line from one of the reports on the April failure of the post-massacre gun-law reform bill: “Mr. Obama hugged the brother of one victim, Daniel Barden, who was 7, and told him to take care of his mother, who was sobbing quietly.”
Since April, there has been all manner of rationalization and second-guessing about how this failure happened. The administration should never let itself get sidetracked by the gun issue to begin with. The president should have done more to push for the legislation, which was dubbed Manchin-Toomey. Or perhaps he should have done less. Maybe, though the Newtown families fell in line with the law enforcement and gun control groups who wanted expanded background checks, the bill should have focused more narrowly on reforms that directly addressed what had happened in Newtown.
In the coming New York Times Magazine, Robert Draper does us all a service by breaking through some of the second-guessing in order to analyze just how the National Rifle Association and other gun-rights groups managed to block a measure that polls showed were supported by some 90 percent of Americans. His conclusion is not so different from the one I reached, in slightly more optimistic tones, last spring: As confounding as the NRA’s win was, there’s reason to believe that, in “unsteady little increments,” its influence is being reduced.
However, even Draper’s deeply-reported look at the NRA runs the risk of diverting attention from this simple fact: Last April, 100 senators had the opportunity to vote on sensible gun-law reforms that many Newtown families were pleading for. And 46 of them decided to vote against it, which in the contemporary Senate was enough to kill the bill. Each vote counts the same, but here, for posterity’s sake, are some “no’s” that stood out in particular:
Kelly Ayotte
The first-term Republican from New Hampshire is a former prosecutor and state attorney general and thus well acquainted with the porousness of gun laws, which require background checks at licensed dealerships to screen for past felonies or dangerous mental illness, but not at the gun shows or private sales where an estimated 40 percent of transactions occur. Voting for background checks would hardly hurt Ayotte’s general election chances in New Hampshire, a state Obama won by six points against a part-time New Hampshire resident, which has prompted speculation that her vote was cast to protect her prospects for a national GOP ticket. Confronted after the vote by Erica Lafferty, the daughter of the slain Sandy Hook principal, Ayotte gave a dissembling explanation that sent Lafferty striding from the room.
Max Baucus
The Montana Democrat has been allied with the NRA ever since voting for the 1994 assault weapons ban, an experience that he “felt he had paid dearly for,” according to a Baucus staffer quoted by Draper. Gun control supporters hoped they would get Baucus on this bill, though, given its moderation and the fact that he is nearing the end of his career – indeed, shortly after casting his vote, he announced that he is retiring. But he voted no nonetheless, a decision he explained thusly: “Montanans have told me loud and clear that they oppose any new gun controls.” These must not be the same Montanans who told pollsters, by a solid majority, that they backed expanded background checks, or the ones being listened to by Jon Tester, Baucus’s fellow Montana Democrat, who has many more elections ahead of him. He voted yes.
Jeff Flake
The freshman Republican from Arizona is quite conservative, but gun control advocates had high hopes for him because of his close relationship with his fellow Arizonan Gabrielle Giffords. When the congresswoman was shot in the head by a gunman in 2011, Flake was one of the first to rush to her side in the hospital. In early April, he sent a hand-written note to another Arizonan touched by gun violence, the mother of a young man killed in the Aurora cinema shooting, writing that “strengthening background checks is something we agree on.” In a Capitol hallway just before the vote, as the New York Times reported, “Ms. Giffords, who still struggles to speak because of the damage that a bullet did to her brain, grabbed Mr. Flake’s arm and tried — furiously and with difficulty — to say that she had needed his vote. The best she could get out was the word ‘need.’” She didn’t get it. Flake faced a serious backlash back home, but, not facing reelection until 2018, shrugged it off: “That’s the beauty of a six-year term.”
Heidi Heitkamp
The freshman Democrat from North Dakota hails from a red state, but does not face reelection again until 2018. That puts her in a similar position as Joe Donnelly, the conservative Democrat from Indiana. He voted for Manchin-Toomey. Heitkamp voted against it, citing the many phone calls she’d gotten against the bill: “I’ve heard overwhelmingly from the people of North Dakota; and at the end of the day my duty is to listen to and represent the people of North Dakota.” According to one poll, 79 percent of North Dakotans surveyed backed expanded background checks – a far higher rate than even in Montana.
Rob Portman
The Ohio Republican, George W. Bush’s former budget director, is considered one of the more moderate members of the Republican caucus, a reputation affirmed when he came out in support of same-sex marriage after learning that his son is gay. But, as Draper notes, it was this very announcement that helped set Portman against Manchin-Toomey:
Portman told [parents of slain Sandy Hook children who came to talk to him], “You know, I have an A rating from the N.R.A., so I’m probably not going to support this.” At some point, 13-year-old James Barden, a brother of one of the victims, spoke up. “Senator, there’s over a thousand deaths from gun violence in Ohio every year,” he said. “I’m here on behalf of my little brother, Daniel. Do you think that this bill would save some of those lives?”
Portman sat quietly for a moment. Then he said: “It could. It could.” But what the Republican senator did not say was that he had already disappointed conservatives by coming out in favor of same-sex marriage because of his openly gay son. By the spring of 2013 it had become axiomatic in the Senate that among the three incendiary social issues of the moment — gun restrictions, same-sex marriage and comprehensive immigration reform — a moderate Democrat could afford to vote for two of them, and a conservative Republican only one. Portman had already selected his hot-button issue.
Also worth noting: having an A-rating from the NRA rating did not stop six other senators from backing the legislation, among them its co-sponsors, West Virginia Democrat Joe Manchin and Pennsylvania’s Pat Toomey, one of four Republicans to back the bill.
Mark Pryor
The Arkansas Democrat is up for reelection next year in a red state. That puts him in the same boat as Democrats Kay Hagan of North Carolina and Mary Landrieu of Louisiana. They voted for Manchin-Toomey nonetheless; he did not. Draper reports that Pryor was, like Baucus, haunted by the ghost of 1994, when his father, Senator David Pryor, voted for the assault weapons ban and “incurred the animus of the N.R.A.” But Pryor may have miscalculated – whereas Hagan and Landrieu enjoyed polling boosts from their vote for the bill, he did not, and all three now find themselves in trouble for unrelated reasons: the Obamacare rollout woes.
There are so many others that one could scrutinize as well: Ron Johnson and Dean Heller, Republicans from blue-state Wisconsin and Nevada; Mark Begich, Democrat of Alaska, who had declared a “sea change” in the politics of gun control after Newtown; Tom Coburn, Republican of Oklahoma, who was leading the way in drafting a background-checks bill before a group to the right of the NRA started flooding his phones…All 46 had a choice and opted as they did.
I reached out to all of the above-mentioned no votes over the past two days to see if any of the senators were reassessing the issue and open to supporting a revised version of the bill. The only one that responded to the question on the record was the office of Senator Flake. Wrote his spokeswoman: “No, he’s not reassessing, and no, not open to a revised version.”
It’s not handwritten, but that Aurora mom Flake corresponded with surely gets the message.
By: Alec MacGinnis, The New Republic, December 12, 2013
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