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“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

December 14, 2013 Posted by | Wealthy | , , , , , , , , | Leave a comment

“Invincible Arrogance”: Ted Cruz’s Conceit And Fringe Politics Is A Recipe For A Very Scary Personality

Since we are for the time being required to think of Sen. Ted Cruz as a significant force in American politics, it’s helpful now and then to consider how the world looks from his perspective. TPM’s Josh Marshall suspects that being told his whole life how incredibly smart he is has not been good for his character:

[B]ack when he showed up at Harvard Law School in 1992, he stunned his fellow classmates by putting up flyers around campus for an ‘elite study group’ with the instructions ‘only magnas from top Ivys need apply.’ In other words, at a place where arrogance is like air and self-awareness a precious commodity, Cruz managed to stand out on day one as a triple-ply arrogant ass.

Cruz never seems to have grasped that there are people every bit as sharp as him who didn’t go to an Ivy League School (even a ‘top Ivy’). My read on Cruz, from talking to people who knew him very well in college and law school, is that he’s so confirmed in his belief in his own rectitude and genius that he’s likely impervious to what most of us would interpret as rejection or failure. This didn’t work? Well, too many stupid people or cowards who didn’t flock to my banner. That seemed to be the gist of his speech before the vote. And my guess it wasn’t just puffing but represented his genuine belief.

Moreover, in a “populist” wing of the Republican Party that is very self-conscious about its lack of ethnic diversity, its transparent anti-intellectualism, and its tendency to lionize pols that are aggressively proud of their ignorance, Cruz has been an all-purpose antidote, and hears more testimony to his brilliance every day than most very smart people hear in a lifetime.

His situation reminds me of the central character in Walker Pecy’s novel Lancelot, who gets an unearned reputation for brilliance among his teammates on the LSU football team:

Being “smart” on the football team meant that you read Time magazine and had heard of the Marshall Plan. (“You don’t believe he can tell you about the Marshall Plan? Ask him! He’s one more smart sapsucker.”) They, my teammates, admired “smartness” more than anybody I’ve met before or since.

Now add in the fact that Ted Cruz happens to espouse a political philosophy (and for that matter, a religious faith) based on a very rigid concept of what’s right and wrong at all times and in all circumstances, along with Cruz’s legendary rhetorical skills, and you have a recipe for a very scary personality.

I once read a letter to the editor from a man who explained that in opposing legalized abortion and homosexuality he was expressing “the mind of God.” “Now that’s self-confidence,” I thought. Add into that equation a mind that’s used to being described as almost God-like, and invincible arrogance–if not an actual God Complex–will be the result every single time.

By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, October 18, 2013

October 20, 2013 Posted by | Politics | , , , , , , , | 1 Comment

Social Inequality: The Paradox Of The New Elite

It’s a puzzle: one dispossessed group after another — blacks, women, Hispanics and gays — has been gradually accepted in the United States, granted equal rights and brought into the mainstream.

At the same time, in economic terms, the United States has gone from being a comparatively egalitarian society to one of the most unequal democracies in the world.

The two shifts are each huge and hugely important: one shows a steady march toward democratic inclusion, the other toward a tolerance of economic stratification that would have been unthinkable a generation ago.

The United States prides itself on the belief that “anyone can be president,” and what better example than Barack Obama, son of a black Kenyan immigrant and a white American mother — neither of them rich.

And yet more than half the presidents over the past 110 years attended Harvard, Yale or Princeton and graduates of Harvard and Yale have had a lock on the White House for the last 23 years, across four presidencies. Thus we have become both more inclusive and more elitist.

It’s a surprising contradiction. Is the confluence of these two movements a mere historical accident? Or are the two trends related?

Other nations seem to face the same challenge: either inclusive, or economically just. Europe has maintained much more economic equality but is struggling greatly with inclusiveness and discrimination, and is far less open to minorities than is the United States.

European countries have done a better job of protecting workers’ salaries and rights but have been reluctant to extend the benefits of their generous welfare state to new immigrants who look and act differently from them. Could America’s lost enthusiasm for income redistribution and progressive taxation be in part a reaction to sharing resources with traditionally excluded groups?

“I do think there is a trade-off between inclusion and equality,” said Gary Becker, a professor of economics at the University of Chicago and a Nobel laureate. “I think if you are a German worker you are better off than your American equivalent, but if you are an immigrant, you are better off in the U.S.”

Professor Becker, a celebrated free-market conservative, wrote his Ph.D. dissertation (and first book, “The Economics of Discrimination”) to demonstrate that racial discrimination was economically inefficient. American business leaders seem to have learned that there is no money to be made in exclusion: bringing in each new group has simply created new consumers to court. If you can capture nearly three-quarters of the economy’s growth — as the top 1 percent did between 2002 and 2006 — it may not be worth worrying about gay marriage or skin color.

“I think we have become more meritocratic — educational attainment has become increasingly predictive of economic success,” Professor Becker said. But with educational attainment going increasingly to the children of the affluent and educated, we appear to be developing a self-perpetuating elite that reaps a greater and greater share of financial rewards. It is a hard-working elite, and more diverse than the old white male Anglo-Saxon establishment — but nonetheless claims a larger share of the national income than was the case 50 years ago, when blacks, Jews and women were largely shut out of powerful institutions.

Inequality and inclusion are both as American as apple pie, says Jerome Karabel, a professor of sociology at the University of California, Berkeley, and author of “The Chosen,” about the history of admission to Harvard, Yale and Princeton. “I don’t think any advanced democracy is as obsessed with equality of opportunity or as relatively unconcerned with equality of condition,” he says. “As long as everyone has a chance to compete, we shouldn’t worry about equality. Equality of condition is seen as undesirable, even un-American.”

The long history of racial discrimination represented an embarrassing contradiction — and a serious threat — to our national story of equal opportunity. With Jim Crow laws firmly in place it was hard to seriously argue that everyone had an equal chance. Civil rights leaders like the Rev. Dr. Martin Luther King Jr. were able to use this tradition to draw support to their causes. “Given our culture of equality of opportunity, these kinds of rights-based arguments are almost impossible to refute,” Professor Karabel said. “Even in today’s conservative political climate, opponents of gay rights are losing ground.”

The removal of traditional barriers opened up the American system. In 1951 blacks made up less than 1 percent of the students at America’s Ivy League colleges. Today they make up about 8 percent. At the same time, America’s elite universities are increasingly the provinces of the well-to-do. “Looking at the data, you see that the freshman class of our top colleges are more and more made up of the children of upper- and upper-middle-class families,” said Thomas J. Espenshade of Princeton, a sociologist.

Even the minority students are more affluent, he noted; many of them are of mixed race, or the children of immigrants or those who benefited from affirmative action.

Shamus Khan, a sociologist at Columbia and the author of “Privilege,” a book about St. Paul’s, the prep school, agreed that there had been a change in the composition of the elite. “Who is at elite schools seems to have shifted,” he said. “But the elite seem to have a firmer and firmer hold on our nation’s wealth and power.”

Still the relatively painless movement toward greater diversity should not be dismissed as mere window dressing.

“After the immigration reform of 1965, this country went from being the United States of Europe to being the United States of the World. All with virtually no violence and comparatively little trauma,” Professor Karabel said. This is no small thing, particularly when you compare it to the trauma experienced by many European societies in absorbing much lower percentages of foreign-born citizens, few of whom have penetrated their countries’ elites.

Moreover, inequality has grown partly for reasons that have little or nothing to do with inclusion. Almost all advanced industrial societies — even Sweden — have become more unequal. But the United States has become considerably more unequal. In Europe, the rights of labor have remained more central, while the United States has seen the rise of identity politics.

“There is much less class-based organization in the U.S,” said Professor Karabel. “Race, gender and sexual orientation became the salient cleavages of American political life. And if you look at it — blacks, Hispanics and women have gained somewhat relative to the population as a whole, but labor as a category has lost ground. The groups that mobilized — blacks, Hispanics, women — made gains. But white male workers, who demobilized politically, lost ground.”

One of the groups to become mobilized in response to the protest movements of the 1960s and early 1970s was the rich. Think tanks dedicated to defending the free-enterprise system — such as the Cato Institute and the Heritage Foundation — were born in this period. And it is not an accident that the right-wing advocate Glenn Beck held a national rally on the anniversary of King’s “I Have a Dream” speech in front of the Lincoln Memorial. Republicans now defend tax cuts for the richest 2 percent using arguments and language from the civil rights movements: insisting that excluding the richest earners is unfair.

Removing the most blatant forms of discrimination, ironically, made it easier to justify keeping whatever rewards you could obtain through the new, supposedly more meritocratic system. “Greater inclusiveness was a precondition for greater economic stratification,” said Professor Karabel. “It strengthened the system, reinvigorated its ideology — it is much easier to defend gains that appear to be earned through merit. In a meritocracy, inequality becomes much more acceptable.”

The term “meritocracy” — now almost universally used as a term of praise — was actually coined as a pejorative term, appearing for the first time in 1958, in the title of a satirical dystopian novel, “The Rise of the Meritocracy,” by the British Labour Party leader Michael Young. He warned against the creation of a new technocratic elite in which the selection of the few would lead to the abandonment of the many, a new elite whose privileges were even more crushing and fiercely defended because they appeared to be entirely merited.

Of the European countries, Britain’s politics of inequality and inclusion most resemble those of the United States. Even as inequality has grown considerably, the British sense of economic class has diminished. As recently as 1988, some 67 percent of British citizens proudly identified themselves as working class. Now only 24 percent do. Almost everybody below the Queen and above the poverty line considers himself or herself “middle class.”

Germany still has robust protections for its workers and one of the healthiest economies in Europe. Children at age 10 are placed on different tracks, some leading to university and others to vocational school — a closing off of opportunity that Americans would find intolerable. But it is uncontroversial because those attending vocational school often earn as much as those who attend university.

In France, it is illegal for the government to collect information on people on the basis of race. And yet millions of immigrants — and the children and grandchildren of immigrants — fester in slums.

In the United States, the stratification of wealth followed several decades where economic equality was strong. The stock market crash of 1929 and the Great Depression that followed underscored the excesses of the roaring ’20s and ushered in an era in which the political climate favored labor unions, progressive taxation and social programs aimed at reducing poverty.

From the 1930s to the 1960s, the income of the less affluent Americans grew more quickly than that of their wealthier neighbors, and the richest 1 percent saw its share of the national income shrink to 8.9 percent in the mid-1970s, from 23.9 percent in 1928. That share is now back up to more than 20 percent, its level before the Depression.

Inequality has traditionally been acceptable to Americans if accompanied by mobility. But most recent studies of economic mobility indicate that it is getting even harder for people to jump from one economic class to another in the United States, harder to join the elite. While Americans are used to considering equal opportunity and equality of condition as separate issues, they may need to reconsider. In an era in which money translates into political power, there is a growing feeling, on both left and right, that special interests have their way in Washington. There is growing anger, from the Tea Party to Occupy Wall Street, that the current system is stacked against ordinary citizens. Suddenly, as in the 1930s, the issue of economic equality is back in play.

 

By:  Alexander Stille, The New York Times Sunday Review, October 22, 2011

October 23, 2011 Posted by | Class Warfare, Conservatives, Economy, Education, GOP, Government, Ideologues, Ideology, Middle Class, Republicans, Right Wing, Taxes, Teaparty, Wealthy | , , , , , , , , | Leave a comment

The Birther’s Guide To Staying Relevant In A Post “Long Form” World

So you’ve spent the last few years constantly asking “where’s the birth certificate,” and now you have an answer. Do you give up? Do you stop constantly emailing journalists and bloggers accusing them of being part of the cover-up? Do you quit commenting on FreeRepublic? Return your WorldNetDaily survival seed bank unopened? No! Of course not!

Professional Birthers have expanded their investigations beyond the question of “where was the president born,” because even before today it was quite obvious that he was born in Hawaii. True birtherism — not the lazy, low-information “I heard he was born in Kenya or something” birtherism of amateurs — has already gone baroque, asserting that Barack Obama never had or possibly lost his American citizenship for reasons that go far beyond the simple fact of his “birthplace.” As Justin Elliott already reported, the conspiracists have other conspiracies developed and ready to explore. And that is how birtherism and its associated theories will live on.

The certificate is a forgery

Ahem. Some FreeRepublic commenters are already on the case:

“Look at the document…it is superimposed on a different background that contains Onaka’s signature (hint: look at the curling on the left-hand margin of the text fields).”

“In 1961, blacks were called negro, colored, darkie, and several other less accepted names, but they were NEVER called ‘African’ as Urkel’s father was in this document. An American adult in 1961 would no more have called a negro ‘African’ than they would have called a homosexual ‘gay’. That alone is enough to raise huge questions about this document.”

“The Security Paper is a Photoshop. If you look at the full form, the ‘Security Paper’ is a background, the ‘Certificate of Live Birth’ appears like it was scanned from a book, the paper made to be transparent – and the ink and borders were then laid on a backdrop with the “Security Paper” background.”

His “African” father disqualifies him

One popular theory has it that “natural born citizen” does not mean what you think it means. Apparently, a “natural born citizen” has to have two American parents. So while Barack Obama has definitively proven that he’s a “native-born citizen,” he is still not a “natural born citizen,” thanks to his father being African. (This would also disqualify a number of past presidents, including Woodrow Wilson, Andrew Jackson, and Chester Arthur, but no one would miss them.)

Something about British citizenship and the Kenyan constitution

I dunno, I don’t really get this one. Barack Obama had dual U.S./British citizenship which became U.S./Kenyan citizenship which then became Kenyan citizenship because he never renounced it.

He lost his citizenship

As WND has written: “Several court cases challenging Obama’s presidential eligibility have argued he gave up his U.S. citizenship in Indonesia and used an Indonesian passport to travel to Pakistan in the early 1980s. Indonesia does not allow dual citizenship.

Still a secret Muslim

One big hope of the long-form birthers was that Obama’s birth certificate would finally reveal that he is a secret Muslim. It does not reveal that, but there’s no reason they can’t still say it.

How did he get into Columbia?

Donald Trump already brought this one up, but the new frontier in questioning the president’s legitimacy is asking about his college years. Because, in their minds, there is simply no way a black man gets into a good school without receiving special favors or somehow cheating, the Schoolers are developing weird, complex theories about how Barack Obama transfered from Occidental to Columbia (and then got accepted into Harvard Law). The new rallying cry will be “release the transcripts.”

This will probably be the most popular of the new avenues of birtherism, though may not bleed into the mainstream discourse with as much ease as the birth certificate stuff, because it has no bearing whatsoever on the president’s qualifications to be president. Schoolerism is simply about proving that the president’s a phony who duped the world with his hoodoo, “the biggest affirmative action baby in history” in the detestable words of Mickey Kaus.

In the imaginings of the crowd desperately searching for evidence that Barack Obama is who they wish he was, the president was obviously, transparently unqualified to go to an elite university, because just look at him.

So birtherism will survive. It will mutate and adapt. There’s no satisfying some people.

By: Alex Pareene, Salon War Room, April 27,2011

April 28, 2011 Posted by | Bigotry, Birthers, Politics, President Obama, Public, Racism, Right Wing | , , , , , , , , , , | Leave a comment

   

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