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“The Art Of The Hustle”: Donald Trump’s ‘Charity’ Is A Money-Making Scam

No wonder Donald Trump calls himself an ardent philanthropist.

He has likely made millions off it.

He is not just some cheap miser who avoids digging into his pocket for charity, as The Smoking Gun and The Washington Post have described him.

He does not simply avoid giving.

He gets.

Maybe his book should have been called The Art of the Hustle.

His biggest score appears to have come in 2006, and if he ever releases his tax return for that year, we will learn if he is a felon or just a liar.

Either way, the self-proclaimed “ardent philanthropist” seems to give precious little money to charity while receiving millions in deductions by donating land he valued at somewhere between 13 and 50 times what he paid for it.

Back in the 1990s, Trump paid $2 million for two parcels of land totaling 436 acres north of New York City with the hope of building a pair of golf courses.

He initially sought to overcome various environmental obstacles and permitting hurdles by applying his self-described mastery of deal making. He placed a phone call to the then supervisor of the Westchester County village of Yorktown, Linda Cooper.

“Linda, just let me build the golf course—I’m rich, you’ll like it,’” Trump said, by her recollection.

Cooper would tell the press that Trump “just didn’t want to go through the rules.”

She offered the same description of Trump that others would later offer during his present presidential campaign.

“He’s like the bully on the playground,” Cooper told the Journal News. “Whether you are a big person or a little person, you have to follow the same rules. If he chooses to stop the process, so be it.”

The rules remained the rules, and Trump did indeed choose to stop the process in 2002.

“You have done a terrible disservice to your constituents who have sadly lost out on a tremendous opportunity,” Trump said in a letter to Cooper.

Trump suggested to reporters that he had been making a sacrifice to begin with.

“My problem is that I can make much more money with housing than I can with a golf course,” he said.

He announced, “I have put a ‘For Sale’ sign out,” and said it was sure to attract “every developer in Westchester.”

He had yet to sell the land four years later, when he donated it to New York State for a park.

“You know me,” he said. “I never throw up my hands. I fight back. I could have sold the property to a developer, because it’s zoned for houses. Instead, I’m giving it to the state, which is the best thing to do.”

The park would of course be named after himself. The gift came with a further condition.

“The name will be prominently displayed at least at each entrance to the park,” read a letter from his attorney to the state.

A press conference was held at the new Donald J. Trump State Park. Trump was joined by his wife, Melania, and two of his children, Donald Jr. and Ivanka.

“This is so beautiful, am I allowed to change my mind?” he joked to his wife.

He said his children had suggested donation as a way “to do something spectacular.”

“I have always loved the city and state of New York and this is my way of trying to give something back,” Trump said, as then-Gov. George Pataki stood beside him, beaming approvingly. “I hope that these 436 acres of property will turn into one of the most beautiful parks anywhere in the world.”

A reporter asked the value of the land in question.

“People have told me about $100 million,” Trump said.

The press took that to mean the donation was worth $100 million, an impression Trump made no effort to dispel.

A town planning official would later suggest that the land was more likely worth in the vicinity of $15 million.

The question now is whether Trump claimed the $100 million valuation as a charitable deduction in his income tax return for 2006. That would seem to constitute tax fraud, a felony.

But a list of Trump’s supposed charitable donations compiled by his campaign and given to the Associated Press is topped by this entry:

“LAND DONATED TO NYS OFFICE OF PARKS—YORKTOWN, NY—436 ACRES…$26,100,000”

That appraisal would be more in keeping with reality and on the honest side of outright fraud if he used it in his tax return. He would not be a felon after all, just a liar who exaggerated the value of the land by some $73,900,000.

He has said, “I fight like hell not to pay a lot of tax,” so he almost certainly sought a big-time tax break from the donation.

Even the much smaller deduction resulting from the $26.1 million valuation would likely still be worth millions more than the $2 million he paid for the land.

Talk about ardent philanthropy!

Trump also remains that rare soul who made money off the 9/11 attacks. He gave little if any of his own money in the aftermath when the whole world was offering to help, but he accepted $150,000 to offset supposed business losses at his building several blocks from Ground Zero.

By contrast, Rosie O’Donnell gave $1 million the day after the attacks. Trump has called her a fat pig.

On Saturday, Trump seemed to reduce his 9/11 net profit by presenting the September 11 Memorial with a check for $100,000 while making his first visit there.

But The Washington Post reported that the check was actually drawn on the Trump Foundation. And Trump does not seem to have given anything to the foundation that bears his name since 2008. The funds handed out in his name have actually come from such various sources as a World Wrestling Federation, a Queens carpet wholesaler, and a prominent ticket scalper known as The Ticket Man.

On Monday, a spokesman for the September 11 Memorial was unable to confirm that Trump’s check had indeed come from the foundation rather than The Donald himself. Should the money prove to have come out of his pocket, he will remain $50,000 ahead from 9/11.

Meanwhile, Donald J. Trump State Park was closed in 2010 as a result of budget cuts. Signs prominently bearing his name are still posted not only at the entrances, as required by the agreement, but on nearby parkway exits.

Only his 2006 tax return will show if Trump is a felon or a liar.

Only that return will document if he was not a big-time giver but a big-time getter.

Only all his tax returns—which the IRS says he has no reason not to release despite his talk about audits —will tell the full story of The Art of the Hustle.

 

By: Michael Daly, The Daily Beast, April 11, 2016

April 13, 2016 Posted by | Charitable Donations, Donald Trump, Tax Returns | , , , , , , | 1 Comment

“21 Questions For Donald Trump”: Voters Would Learn A Lot About Trump If They Asked For Answers To These Questions

I have covered Donald Trump off and on for 27 years — including breaking the story that in 1990, when he claimed to be worth $3 billion but could not pay interest on loans coming due, his bankers put his net worth at minus $295 million. And so I have closely watched what Trump does and what government documents reveal about his conduct.

Reporters, competing Republican candidates, and voters would learn a lot about Trump if they asked for complete answers to these 21 questions.

So, Mr. Trump…

1. You call yourself an “ardent philanthropist,” but have not donated a dollar to The Donald J. Trump Foundation since 2006. You’re not even the biggest donor to the foundation, having given about $3.7 million in the previous two decades while businesses associated with Vince McMahon’s World Wrestling Entertainment gave the Trump Foundation $5 million. All the money since 2006 has come from those doing business with you.

How does giving away other people’s money, in what could be seen as a kickback scheme, make you a philanthropist?

2. New York Attorney General Eric T. Schneiderman successfully sued you, alleging your Trump University was an “illegal educational institution” that charged up to $35,000 for “Trump Elite” mentorships promising personal advice from you, but you never showed up and your “special” list of lenders was photocopied from Scotsman Guide, a magazine found at any bookstore.

Why did you not show up?

3. You claimed The Learning Annex paid you a $1 million speaking fee, but on Larry King Live, you acknowledged the fee was $400,000 and the rest was the promotional value.

Since you have testified under oath that your public statements inflate the value of your assets, can voters use this as a guide, so whenever you say $1, in reality it is only 40 cents? 

4. The one-page financial statement handed out at Trump Tower when you announced your candidacy says you’ve given away $102 million worth of land.

Will you supply a list of each of these gifts, with the values you assigned to them?

5. The biggest gift you have talked about appears to be an easement at the Palos Verdes, California, golf course bearing your name on land you wanted to build houses on, but that land is subject to landslides and is now the golf course driving range.

Did you or one of your businesses take a tax deduction for this land that you could not build on and do you think anyone should get a $25 million tax deduction for a similar self-serving gift?

6. Trump Tower is not a steel girder high rise, but 58 stories of concrete.

Why did you use concrete instead of traditional steel girders?

7. Trump Tower was built by S&A Concrete, whose owners were “Fat” Tony Salerno, head of the Genovese crime family, and Paul “Big Paul” Castellano, head of the Gambinos, another well-known crime family.

If you did not know of their ownership, what does that tell voters about your management skills?

8. You later used S&A Concrete on other Manhattan buildings bearing your name.

Why?

9. In demolishing the Bonwit Teller building to make way for Trump Tower, you had no labor troubles, even though only about 15 unionists worked at the site alongside 150 Polish men, most of whom entered the country illegally, lacked hard hats, and slept on the site.

How did you manage to avoid labor troubles, like picketing and strikes, and job safety inspections while using mostly non-union labor at a union worksite — without hard hats for the Polish workers?

10. A federal judge later found you conspired to cheat both the Polish workers, who were paid less than $5 an hour cash with no benefits, and the union health and welfare fund. You testified that you did not notice the Polish workers, whom the judge noted were easy to spot because they were the only ones on the work site without hard hats.

What should voters make of your failure or inability to notice 150 men demolishing a multi-story building without hard hats?

11. You sent your top lieutenant, lawyer Harvey I. Freeman, to negotiate with Ken Shapiro, the “investment banker” for Nicky Scarfo, the especially vicious killer who was Atlantic City’s mob boss, according to federal prosecutors and the New Jersey State Commission on Investigation.

Since you emphasize your negotiating skills, why didn’t you negotiate yourself?

12. You later paid a Scarfo associate twice the value of a lot, officials determined.

Since you boast that you always negotiate the best prices, why did you pay double the value of this real estate?

13. You were the first person recommended for a casino license by the New Jersey Attorney General’s Division of Gaming Enforcement, which opposed all other applicants or was neutral. Later it came out in official proceedings that you had persuaded the state to limit its investigation of your background.

Why did you ask that the investigation into your background be limited?

14. You were the target of a 1979 bribery investigation. No charges were filed, but New Jersey law mandates denial of a license to anyone omitting any salient fact from their casino application.

Why did you omit the 1979 bribery investigation?

15. The prevailing legal case on license denials involved a woman, seeking a blackjack dealer license, who failed to disclose that as a retail store clerk she had given unauthorized discounts to friends.

In light of the standard set for low-level license holders like blackjack dealers, how did you manage to keep your casino license?

16. In 1986 you wrote a letter seeking lenient sentencing for Joseph Weichselbaum, a convicted marijuana and cocaine trafficker who lived in Trump Tower and in a case that came before your older sister, Judge Maryanne Trump Barry of U.S. District Court in Newark, New Jersey, who recused herself because Weichselbaum was the Trump casinos and Trump family helicopter consultant and pilot.

Why did you do business with Weichselbaum, both before and after his conviction?

17. Your first major deal was converting the decrepit Commodore Hotel next to Grand Central Station into a Grand Hyatt. Mayor Abe Beame, a close ally of your father Fred, gave you the first-ever property tax abatement on a New York City hotel, worth at least $400 million over 40 years.

Since you boast that you are a self-made billionaire, how do you rationalize soliciting and accepting $400 million of welfare from the taxpayers?

18. You say that your experience as a manager will allow you to run the federal government much better than President Obama or Hilary Clinton. On Fortune Magazine’s 1999 list of the 496 most admired companies, your casino company ranked at the bottom – worst or almost worst in management, use of assets, employee talent, long-term investment value, and social responsibility. Your casino company later went bankrupt.

Why should voters believe your claims that you are a competent manager?

19. Your Trump Plaza casino was fined $200,000 for discriminating against women and minority blackjack dealers to curry favor with gambler Robert Libutti, who lost $12 million, and who insisted he never asked that blacks and women be replaced.

Why should we believe you “love” what you call “the blacks” and the enterprise you seek to lead would not discriminate again in the future if doing so appeared to be lucrative?

20. Public records (cited in my book Temples of Chance) show that as your career took off, you legally reported a negative income and paid no income taxes as summarized below:

1975
Income: $76,210
Tax Paid: $18,714

1976
Income: $24,594
Tax Paid: $10,832

1977
Income: $118,530
Tax Paid: $42,386

1978
Income: ($406,379)
Tax Paid: $0

1979
Income: ($3,443,560)
Tax Paid: $0

Will you release your tax returns? And if not, why not?

21. In your first bestselling book, The Art of the Deal, you told how you had not gotten much work done on your first casino, so you had crews dig and fill holes to create a show. You said one director of your partner, Holiday Inns, asked what was going on. “This was difficult for me to answer, but fortunately this board member was more curious than he was skeptical,” you wrote.

Given your admission that you used deception to hide your failure to accomplish the work, why should we believe you now?

 

By: David Cay Johnson, The National Memo, July 10, 2015

 

July 11, 2015 Posted by | Donald Trump, GOP Presidential Candidates, Politics | , , , , , , | 2 Comments

“Washing Koch As White As Snow”: No Matter The Camouflage, Things-Don’t-Go-Better-With-Koch

Joe Scarborough recently got into quite a huff—and got the Morning Joe crew to huff with him—over Harry Reid’s attacks on David and Charles Koch, the billionaire industrialists who fund dozens of conservative causes and Republican campaigns. Reid had said, rather catchily for him, that Senate Republicans “are addicted to Koch.” The Senate majority leader also said the brothers “have no conscience and are willing to lie” in political ads, and that they’re “un-American” for trying to “buy America.”

Reid said he doesn’t begrudge the Kochs their wealth, but “what is un-American is when shadow billionaires pour unlimited money into our democracy to rig the system and benefit themselves and the wealthiest 1 percent.”

That might sound hyperbolic unless you have followed the long list of ways the Kochs are indeed buying America. For starters, while their Koch Industries is the one of the nation’s largest air polluters, their money is a huge factor in blocking climate change progress and spreading know-nothing denialism; they fund ALEC and its stand-your-ground political agenda; and they’re waging a multimillion-dollar war against the Affordable Care Act, trying to convince young people, through ads like the one with the creepy Uncle Sam gynecologist, that they should be afraid, very afraid of Obamacare. Through innumerable think tanks, PACs, nonprofits and dark-money trap doors, Koch money has formed a veritable “Kochopus” that reaches deep into academia, industry, state legislatures and Congress. (For more, see here and here.)

But what’s really gotten Harry Reid to put up his dukes is that the Koch-funded PAC Americans for Prosperity (AFM) has spent more than $30 million, and counting, on ads attacking Democratic senate candidates in the upcoming midterm elections. To defeat Senator Kay Hagan of North Carolina, for instance, AFM has already dropped $8.2 million on TV, radio and digital ads. As Politico puts it, that’s more “than all Democratic outside groups in every Senate race in the country—combined.” Koch money could easily flip the Senate to a Republican majority, leaving little but presidential vetoes to blunt the GOP House’s politics of cruelty.

Joe Scarborough understandably fumed at the “un-American” charge, but he framed the Koch’s power quite differently.

“Let’s first tell the truth about them and what they do, put some perspective in it,” he said Thursday. “It’s unbelievable what they’ve done for cancer research, what they’ve done for the arts, what they have done for education.”

Indeed, you can tell by the way the bros have been slapping their names on cultural institutions that they think they can get their reps fixed wholesale. In New York City alone, the New York State Theater at Lincoln Center has become the David H. Koch Theater. As you enter the Metropolitan Museum of Art, signs tell you you’re standing on the new David H. Koch Plaza. David Koch’s name had also been elevated by his contributions to WNET, the city’s PBS affiliate. That ended last year, however, when WNET ran an independent documentary critical of him. To placate Koch, they axed a second similar film, but Koch resigned from the board and took his money with him.

But by emphasizing the Kochs’ philanthropy—which, come on, is the least two men worth $40 billion each and tied at number four on the Forbes rich people list, can do—Scarborough was providing exactly what their largesse was intended to produce: praise and a media force field that can deflect political criticism. Not that Joe is terribly adverse to their politics, but the point of his outrage in the Morning Joe banter was to shift focus away from Koch policies to Reid’s breach of polite discourse. Willie Geist said that the “addicted to Koch” line “seems beneath the office.” Former congressman and nominal Democrat Harold Ford sniffed, “There’s no need for that kind of vitriol.” Only Donnie Deutsch got close to the heart of the matter, asking whether the “Koch brothers spending a billion on advertising is good for democracy.”

Training your eyes on an oligarch’s philanthropy and away from what it camouflages is to accept in some way the essential justness of great wealth. As if to second that notion, Governor Chris Christie said at CPAC last week that Reid was “rail[ing] against two American entrepreneurs who have built a business, created jobs, and created wealth and philanthropy in this country. Harry Reid should get back to work and stop picking on great Americans who are creating great things in our country.” Some of those great things include millions in donations to the Republican Governors Association, which Christie (still) heads.

Reid’s attacks are part of a larger Democratic pushback, which includes TV spots and sites like KochAddiction.com and StopTheGreedAgenda. The strategy is transparent: link GOP candidates to the Kochs and make the Kochs into villains.

Creating a visible villain is, of course, a time-honored political activity. The Dems have vilified Newt Gingrich and more recently Mitt Romney’s Bain Capital, while the Republicans’ demons include Nancy Pelosi, the Rev. Wright and Bill Ayers. As for “un-American,” a few years ago Glenn Beck falsely portrayed George Soros, the closest big-time funder progressives have to the Kochs, as a Nazi collaborator.

But beyond a bunch of liberals who follow the Koch trail, will voters know or care about what the billionaire brothers do with their money?

Paul Waldman in The American Prospect doubts it. And so far, he says, the Democratic ads aren’t up to the job. In this very busy spot, running in Michigan, the Koch brothers appear as barely identified ghosts amid a jumble of hard-to-follow words.

For what it’s worth, the things-don’t-go-better-with-Koch message is getting across, at least with focus groups. Democratic pollster Geoff Garin told the Times, “Our research has shown pretty clearly that once voters recognize the source of the attacks [on Democratic candidates], they tend to discount them substantially.” Focus groups, he said, had an “overwhelmingly negative” reaction to the Kochs’ political involvement and believed that the Kochs’ “agenda will hurt average people and the undermine the middle class.’”

Billionaire venture capitalist Tom Perkins might have been only kidding when he said that democracies should be run more like corporations: “You pay a million dollars in taxes, you get a million votes.”

But if you pay for enough misleading ads, that is, in effect, what a million bucks can do. And the more the media unthinkingly hail your charitable giving, the more mileage a million dollars will get you.

 

By: Leslie Savan, The Nation, March 10, 2014

March 11, 2014 Posted by | Democracy, Koch Brothers | , , , , , , , | Leave a comment

“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

“The Deal With Rich People”: America Has A Long Standing Bad Deal With The Wealthy

Americans aren’t so sure about rich people.

For every revered Steve Jobs, there’s a reviled Bernie Madoff; for every folksy Warren Buffett, there’s a tone-deaf Mitt Romney. The pursuit of happiness is patriotic, but the pursuit of riches can come off as greedy. This ambivalence toward the wealthy is embedded in American democracy, and no one knows how to yank it out.

Even Alexis de Tocqueville agreed — a good thing, too, because discussing democracy in America without quoting “Democracy in America” is forbidden. “Men are there seen on a greater equality in point of fortune . . . than in any other country in the world, or in any age of which history has preserved the remembrance,” Tocqueville wrote of his travels in the United States. But then, the dagger: “I do not mean that there is any lack of wealthy individuals in the United States. I know of no country, indeed, where the love of money has taken stronger hold.”

So Americans dislike inequality but crave wealth — and this paradox propels our mixed feelings about the rich. Oppressors or job creators? Ambitious go-getters or rapacious 1 percenters?

Robert F. Dalzell, a historian at Williams College, believes he has an answer. America has a long-standing deal with the rich, he explains, one that allows the country to “forge an accommodation between wealth and democracy.” It’s simple: Yes, rich people, you can exploit workers and natural resources and lord your wealth over everyone if you like, and we’ll resent you for it. But if, along the way, you give a chunk of your fortune to charity, all will be forgiven, old sport. History won’t judge you as a capitalist; it will hail you as a philanthropist.

This uneasy bargain is the premise of Dalzell’s “The Good Rich and What They Cost Us,” which chronicles the deal from before the revolution through the recent financial crisis. Of course, just because the deal has lasted this long doesn’t mean that it will endure. Or that it is a particularly good one. Or that the rich aren’t constantly trying to rewrite the terms.

Early on, the wealthy waited until their deaths to strike the deal. Dalzell writes of Robert Keayne, a prominent 17th-century Boston merchant who sought to cleanse his price-gouging reputation by devoting his posthumous riches to college scholarships, improvements in his city’s water supply and defense, and construction of a town hall where important men like him could discuss weighty things. His will became a unilateral contract with town leaders; if anyone tried to sue his estate for past misdeeds, Keayne stipulated, all his giving would “utterly cease and become void.” Boston took the deal.

John D. Rockefeller saw no reason to wait. His Standard Oil empire — whose ruthless business tactics Ida Tarbell exposed and whose interlocking parts the Supreme Court split up — became the basis for the greatest philanthropic enterprise the world had ever seen. From major financial commitments to Spellman College and the University of Chicago, to support for medical research that developed the yellow-fever vaccine, to the financing of the Cloisters museum in Upper Manhattan and the restoration of Colonial Williamsburg, to list just a few initiatives, Rockefeller and his descendants set the model for modern, large-scale philanthropy. And they did so in a way that preserved the family’s influence and wealth over multiple generations.

“There was something Medici-like about the whole effort,” Dalzell writes, “for within the soul of that great Renaissance family there lay an urge to combine what many might have thought uncombinable — vast wealth and dedicated public service.”

But he also sees a more prosaic motivation: Billionaires want to polish their reputations for posterity. Wealth does not dull their sensitivity to what we think of them; it heightens it. Dalzell thinks it is no coincidence, for example, that the Giving Pledge — a public commitment by the world’s richest individuals, led by Buffett and Bill Gates, to donate most of their fortunes — coincided with the Great Recession’s backlash against the wealthy.

So, the rich just want to be loved. Is that so wrong? If more than 100 of the planet’s wealthiest families and individuals are promising to give away unfathomable amounts of money, why quibble?

Well, there’s at least one reason: The deal gets worse as the price paid for the rich’s charity — the inequality between the affluent and the rest — keeps rising. From 1979 to 2007, the real, after-tax income of the top 1 percent of the U.S. population grew by 275 percent, compared with 18 percent for the bottom fifth, according to the Congressional Budget Office. Social mobility has become more stunted in the United States than in Europe. And Americans see themselves falling further behind: A Washington Post-ABC News poll last year found that 57 percent of registered voters believed that the gap between the rich and rest was larger than it had been historically; only 5 percent thought it was smaller.

The deal will get even worse if efforts to push laws and policies that benefit wealthier Americans succeed. In “Rich People’s Movements,” Isaac William Martin, a sociologist at the University of California at San Diego, says today’s tea party is just the latest manifestation of another American tradition: the mobilization of wealthy and middle-class citizens in an effort to cut their taxes and contributions to the state.

Before the tea party, Martin tells us, there were tax clubs — groups of bankers throughout the South that agitated for tax cuts and helped bring about the Revenue Act of 1926, which “cut the tax rates on the richest Americans more deeply than any other tax law in history.” Before we had Grover Norquist and Americans for Tax Reform, we had J.A. Arnold and the American Taxpayers’ League, and Vivien Kellems and the Liberty Belles, a 1950s women’s movement that campaigned to repeal the income tax. And before Arthur Laffer and supply-side economics, there was Andrew Mellon, the banker, philanthropist and Treasury secretary whose 1924 book, “Taxation: The People’s Business,” argued that cutting income tax rates would create more revenue through greater economic growth.

Rich people’s movements respond to perceived threats, such as the New Deal, President Franklin Roosevelt’s effort to cap incomes during World War II (because “all excess income should go to win the war,” FDR explained) or, now, the policies of the Obama administration. But these movements sell their efforts not as benefiting the rich alone — that would be too transparent, too tacky. Instead, they claim to protect freedom, promote growth, safeguard the Constitution or fend off an ever-more-intrusive government. Martin calls this “strategic policy crafting,” and it brings more allies to the fight.

In fact, it is not just the wealthy, but often the middle class or the slightly-richer-than-average who have campaigned for lower taxes on affluent Americans. “People need not be dupes in order to protest on behalf of others who are richer than they are,” Martin argues. “The activists and supporters of rich people’s movements were defending their own real interests, as they saw them. A tax increase on the richest 1 percent may be perceived by many upper-middle-income property owners as the first step in a broader assault on property rights.” In other words, there’s nothing the matter with Kansas.

Shortly before the Republican National Convention gathered last year to nominate a man who could have become one of the richest presidents in U.S. history, the Pew Research Center conducted a survey on American attitudes toward the wealthy. The chronic ambivalence was there: Forty-three percent of respondents said rich people are more likely than the average American to be intelligent, and 42 percent believed that the rich worked harder than everyone else. The good rich! But 55 percent said wealthy people were more likely to be greedy, and 34 percent thought they were less likely to be honest. The bad rich.

Can “giving pledges” and foundation grants sustain America’s deal with the wealthy in a time of increasing inequality and falling social mobility? In his conclusion, Dalzell worries that the belief in the generosity of the good rich leads us to “tolerate, even celebrate, the violation of some of our most cherished ideals” of fairness and egalitarianism.

Perhaps the dilemma of extreme wealth and disparities in a democracy is that noblesse oblige becomes necessary. These two books show that the wealthy give much with one hand but seek to contribute far less with the other. That makes the giving they choose to do all the more critical but all the less accountable.

And that doesn’t sound like such a good deal.

 

By: Carlos Lozada, Outlook Editor, The Washington Post, November 27, 2013

December 1, 2013 Posted by | Economic Inequality, Income Gap | , , , , , , , | Leave a comment

   

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