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The Tax Evasion Conundrum: Is My Home Office Deduction an Evasion?

October 26, 2018 Comments off

I read a recent New York magazine article on Donald Trump’s inheritance by Eric Levitz that urged the Democratic Party to use this as a means of garnering support in the upcoming election. As Levitz explains, Donald Trump didn’t really earn his fortune, he inherited it from his father and, like his father, he accumulated it mainly by taking advantage of tax loopholes. How much did he garner from these loopholes?

On Monday, the New York Times revealed that this wasn’t just false in the Obamanian, “actually, social institutions made your entrepreneurial triumphs possible” sense, but in a much more literal one: Donald Trump “built what he built” with $413 million of his father’s money — much of which Fred Trump effectively stole from the federal Treasury.

Drawing on a “vast trove of confidential tax returns and financial records,” the Times demonstrates that Trump leaned on his father’s largesse for the entirety of his career. Shortly after he was out of diapers, Donald Trump was “earning” $200,000 a year from the family business. By the time he was 8, the mogul was a millionaire. From that point until his father’s death, Donald used his dad as a piggy bank, financing a series of failed business ventures with “loans” from Fred that he only occasionally repaid. And when his father went up to the great, garish penthouse in the sky, Trump used a variety of schemes to cheat the U.S. government out of roughly $500 million in estate taxes.

Mr. Levitz sees this cheating as a potential wedge issue in the 2018 election… but I’m not so sure. In 2016 several news sources reviewed Mr. Trump’s tax returns from decades earlier and determined that he had used all kinds of ruses to avoid paying taxes. His response? Here’s the campaign statement that followed:

Mr. Trump is a highly-skilled businessman who has a fiduciary responsibility to his business, his family and his employees to pay no more tax than legally required. That being said, Mr. Trump has paid hundreds of millions of dollars in property taxes, sales and excise taxes, real estate taxes, city taxes, state taxes, employee taxes and federal taxes, along with very substantial charitable contributions.”

Mr. Trump’s subsequently boasted that avoiding taxes made him “smart” because the money would be “squandered” by the government. This, like many of Mr. Trump’s statements, is a crude re-hash of former President Reagan’s shibboleth that “Government is the Problem”, and that aphorism still carries the day with voters. Why?

Because most voters engage in some form of tax avoidance. When I prepare my taxes I make certain to deduct for my home office, the space I am sitting in now as I write this post. When I was working as a school administrator and as a consultant the deduction was defensible. But this past calendar year I’ve done very little consulting… so… should I take the deduction or not? I DO use the space as an office, but for different purposes. I am the treasurer of a non-profit, serve on two non-profit boards, and do the work associated with those non-profits in my “home office”. I am also scheduled to offer an adult education course early next year and will spend hours preparing for that class in my “home office”. This “home office” scheme will hardly yield me $500,000,000, but it will deny the government some marginal funds that I could argue are being squandered in misbegotten wars.

I offer this disclosure as evidence that every citizen who files his or her tax return looks for as many ways as possible to pay no more tax than legally required,which makes them more inclined to overlook Mr. Trump’s egregious use of tax loopholes. And alas, the Democratic Party is unlikely to seize on this for fear of alienating their donor base.

Until we disabuse ourselves of the notion that “government is the problem” and that the taxes we pay are needed to provide for the common good we will be hard pressed to argue against “smart businessmen” like Mr. Trump who pay no more tax than legally required.

 

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School Choice Undermining “Our Schools” by Siphoning Off Engaged Parents

October 25, 2018 Comments off

Atlantic writer Amy Lueck’s recent article describes the history of the high school in the United States from Horace Mann’s inception of the idea through today and concludes that the injection of “choice” could undercut the high-minded community building mission of high schools. She opens her essay with this:

In 2016, shortly after she was appointed to the position, U.S. Secretary of Education Betsy DeVos declared American public schools a “dead end.” Instead, DeVos advocates for “school choice,” code for charter schools, vouchers, and other privatization efforts.

Families who have watched their local schools struggle might agree with DeVos, but her characterization is still troubling. It reflects a distrust of education as a communal goal, not just an individual one. That’s a big change from the objective of American public schools during their first two centuries. Far from being a “dead end,” for a long time the public school—particularly the public high school—served an important civic purpose: not only as an academic training ground, but also as a center for community and activity in American cities.

Ms. Lueck’s essay then describes how high schools evolved into the focal point of many communities and how, for better or worse, they socialized teenagers, as she described in this paragraph that appears early in her essay:

Public schools have also perpetuated racial and economic inequity. But the high school still galvanized a shared, American society. It helped people aspire toward greater equality together, and it used education to bring together diverse interests and people to forge social bonds of support. That effort shaped the American city of the 19th and early-20th centuries. High schools can continue to do this, so long as they can resist being dismantled.

Ms. Lueck doesn’t develop a description of how “choice” IS eroding the broader mission of public education, the mission of helping “…people aspire toward greater equality together”. The consequences of choice, as outlined in yesterday’s post, is that  the children of engaged parents flee the high school leaving “other children” behind thereby undercutting the idea that “OUR children” are in public education together.

So I offer an edit to Ms. Lueck’s subheading to her article, which read:

Public education and its traditions united communities. But “school choice” could put is putting that legacy at risk.

There… fixed it!

Researchers Find America’s Sad Secret: Racial Fear Works as a Political Strategy

October 25, 2018 Comments off

As often noted in this blog, the differences between Democrats and Republicans are slight when it comes to the privatization agenda of major donors. Both parties favor some form of “choice” as the “solution” to our “failing” public schools. The GOP wants to choice to be completely open, to include parochial schools, and to be driven solely by the marketplace. They wholeheartedly endorse Milton Friendman’s idea of vouchers. The Democratic Party casts the idea of “choice” in the context of their notion that market forces can make government better by promoting competition which, in turn, introduces innovation. Their “voucher lite” approach began by encouraging public school districts to sponsor their own charter schools but quickly devolved into avoiding any blocking of for profit K-12 schools and a willingness to deregulate to encourage competition.

But there is one area where the Democratic Party is morally superior to the GOP, and that is in the debates about race. For decades the GOP sent coded messages that associated government spending with race and of late the party’s nominal leader, President Trump, and his strategists have dropped all pretenses on race, using a caravan of Honduran refugees as a ploy to drum up support for his party in the upcoming midterms. During the time when the GOP used Welfare Queens, Willie Horton, and anti-immigrant and anti-Muslim rhetoric the Democratic Party promoted an African American to the head of their ticket and continue to promote Affirmative Action programs and a safety net that, while tattered, is still defended.

Last month, Eric Levitz of the New York Magazine wrote an article that was titled– or, I believe MIS-titled “Study: You Can Get Whites to Oppose Welfare With This One Weird Trick”. The “weird trick” according to a study by sociologists at Stanford and UC Berkeley is this:

(If you) Get white Americans focused on their racial fears and resentments,a lot of them will vote against the blacks instead of the plutocrats — and some will even come to believe that welfare programs don’t redistribute resources from the wealthy to working people, but rather, from diligent whites to indolent minorities. 

Mr. Levitz then describes how the researchers went about gathering evidence to “prove” the validity of America’s dirty little secret: Racial Fear wins out over reason and facts and economic disparity. He then goes on to note how one political party, the GOP, used this dirty little secret to win elections at all levels of government since 1972.

He concludes his essay with this:

Many pundits attribute the sorry state of American politics in 2018 to the “polarization” of the electorate; to a partisan tribalism that has led voters to prioritize the triumph of their team over progress on broadly popular policy goals. Such commentators would do well to ask who benefits from the fact that tribal conflict inhibits the passage of majoritarian policies in the United States — and to consider the possibility that voters did not polarize themselves.

The “broadly popular policy goals” he references are the desire for higher taxes on the top 1% and the desire for universal health care… both of which have been pushed to the background because of the misperception that if taxes are increased on the rich the main beneficiaries will be minorities and if health care is increased the costs will be picked up primarily by “had working whites”.

But here’s what Mr. Levitz should have pointed out: the use of race to promote “the triumph of their team” plays to the basest instincts in humanity and ignites an animus that is difficult if not impossible to offset with reason. And he should not have characterized the use of racial fear as a “weird trick”… he should have called it what it is: morally reprehensible.

A Good News Update on Arizona Standards: State Board Rejects State Superintendent’s Fundamentalist “Science” Standards

October 24, 2018 Comments off

In an earlier blog post I wrote that Arizona seemed poised to adopt a set of “science” standards advocated by the State Superintendent, Diane Douglas, that would effectively block the instruction of evolution and climate change. In a heartening turn of events, AZCentral writer Lily Altavena reports that the State Board has rejected Ms. Douglas’ recommendations:

The Arizona State Board of Education approved revised science and history standards on Monday, shrugging off outgoing State Superintendent Diane Douglas’ suggestion to replace all the standards with a set from a conservative college in Michigan.

The science standards include edits recommended by the Arizona Science Teachers Association after an outcry over how the draft standards addressed evolution. Those edits emphasize that “The unity and diversity of organisms, living and extinct, is the result of evolution.”

The revised standards will be used by K-12 public district and charter schools statewide. Their approval received thunderous applause from educators and education advocates sitting in the boardroom.

It IS encouraging to see that democracy is working in the curriculum review process, but discouraging to imagine that in 2018 we would be engaged in a debate over the merits of evolution.

Oh, and it wasn’t just the SCIENCE standards that were under review; the SOCIAL STUDIES standards were also on the agenda and Ms. Douglas also wanted her state to use the Hillsdale College standards as the basis for curriculum objectives in Arizona. There was at least one problem with those standards, which were also unanimously rejected by the State Board:

The vote followed a slew of public comment from parents and educators worried that the Hillsdale standards, if adopted, would exclude the study of world religions. There are more references to Christianity in the Hillsdale standards than in Arizona’s draft standards

Fortunately, this is the last time Ms. Douglas will have an opportunity to promote her notions about curriculum standards, as she was defeated in the State GOP primary. But as the door closes behind her, she offered this:

She said she considers the revised standards indoctrination “in some areas,” adding that the new standards don’t go into the “strengths and weaknesses” of evolution.

“Show me where any scientist has proven or replicated that life came from non-living matter or that, if you would, in the example we see in the museums, that man evolved from an ape — there’s no proof to that,” she said. “That’s all I’m saying to our teachers: Let’s teach our children all those different things and let them study that.”

Ms. Altavena added this footnote at the end of her article:

The vast majority of scientists connected to the American Association for the Advancement of Science — 98 percent —  believe in human evolution, according to Pew. About six in 10 Americans believe humans have evolved.

Evidently the 40% who DON’T believe in evolution voted in large numbers when Ms. Douglas was running for office… but fortunately for school children in Arizona the State Board listened to the scientists.

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71% of Voters Support Some Form of Gun Control… Who Will Take Action? Not the Florida Legislature

October 24, 2018 Comments off

I just read a statistic in Politico’s morning feed that reported on a recent poll that found that 67% of those polled, 71% who identified themselves as voters, support some kind of gun control. Shortly thereafter I read a Medium post by a parent/blogger named Kim  S., “…a volunteer and community activist in Broward County, Florida”. While I do not agree with her belief that spending on SROs is worthwhile, I fully concurred with her thoughtful analysis of why it is necessary to ban weapons that are designed to kill large numbers of people in a short period of time. As she notes in her blog post, the Marjorie Stoneham parents and students were not advocating complete and total bans on guns. They focussed on one specific kind of weapon:

These kids were NOT advocating for complete gun bans, no one wants to take away the pistol my grandmother kept under her pillow after my grandfather passed away, or the shotgun my brother in law hunts with. (As my dad says, “a real man loads his bullets with his fingers”, just putting that out there.) But the weapon used in Parkland, the weapon used in Aurora, and the weapon used in Sandy Hook were weapons of war, designed to kill humans and kill them quickly, causing maximum damage. There is no need for that on our streets.There is no need for anyone other than a soldier on a battlefield to have one of these weapons, regardless of what it is called. This is what the students were fighting for when I was with them, and what they continue to fight for. This is not unreasonable, it is common sense, and the only way to protect a civilized society, but apparently even that is too much for the NRA and Marion “anything for gun sales” Hammer, the NRA’s top lobbyist in Tallahassee. The NRA backed candidates took quite a hit to their reputations after the shooting, but they have since regrouped and are now casting blame on gun safety advocates, who, in what has become a shamefully partisan debate, turn out to be mainly Democrats.

Kim S. goes on to question the ideas around “hardening schools”, noting that gun bans worked in one nation and it just might work in ours:

You can turn schools into fortresses but that won’t protect students when they are outside, which happens at arrival and departure times, physical education classes, sports practices, pep rallies, football games, and so on. A fortress won’t protect students when a fire alarm is pulled (although there is talk of “smart alarms”, but even so, if an actual fire is started in one part of the school it would accomplish the goal of getting students out of class where they are vulnerable to a shooter). It won’t protect students when they are out in our world, at the mall, at church, at concerts. All other forms of mass violence are addressed with legislation.When there was a threat of cars plowing into crowds on New Year’s Eve the city of New York parked sand filled dump trucks around the perimeter of the pedestrian area. When planes were used on 9/11 we got the TSA, a whole new agency dedicated to making sure it wouldn’t happen again. When the possibility arose of liquids being used to bomb planes we all had to abide by new carry on regulations. Every other form of violence is addressed, so why not these war guns? One argument is that if you ban guns then only criminals will have them. Well, Australia did that, and you know what? There is still a black market for guns, only they cost upwards of $15,000.00 each. That’s a pretty big deterrent, and it’s working out rather well for them. I suggest we try it too.

Later in the post she explains why arming teachers is a flawed idea and promotes the concept of providing one armed SRO for every 1,000 children in schools. As noted above, I do not see this as a worthwhile investment. I would rather see the money spent on counseling and social workers who can identify and address the root problems that lead to the motivation of some children to turn on their classmates— not only with weapons but also with words and other actions.

There is one point that Kim S. makes that was buried in the middle of her post… a point that cannot be made often enough:

What I can say is there is never enough funding. There wasn’t enough funding for 1 SRO officer per 1,000 students before this tragedy, which is now widely recognized as the necessary ratio of officers to students, but it is now a priority for the school board. This is a priority even if Tallahassee, which takes far more tax payer money from Broward County than it gives back, will not adequately fund security, much less education, for our students.

And I think Kim S. knows that while the NRA will never advocate for enough money to provide SROs, the NRA makes sure there is always enough money to underwrite candidates who will support their agenda and punish candidates who do not. And sadly, it doesn’t require a lot of money to accomplish the second part of that mission.

 

 

Philanthropist Puts Her Boots on the Ground, Sees the Challenges, and Invests in Public Schools

October 24, 2018 Comments off

I often write about the billionaires who are working to undercut public education by spending huge sums of money on for-profit deregulated charter schools and on the candidates who support them. This is an exercise that is discouraging, dispiriting, and maddening. So I was heartened to read an article by Kathleen Megan in US News and World Report about Barbara Dalio, a philanthropist who is investing in PUBLIC schools. And, according to Ms. Megan, Ms. Dalio’s investment might be the beginning of a trend!

What was most revealing to me is the decision making process Ms. Dalio used to determine that investing in public schools is necessary.

Dalio, 70, who is universally described as humble and hands-on, said in an interview last week that her shift toward traditional public school districts came about as she learned more about education and became concerned about the achievement gap and students who are disengaged from school.

Dalio said she observed that the kids who go to public charter schools have parents who are often more involved and have the initiative to seek out an alternative for their child.

But many parents, she said, don’t have the time to do that.

“It’s not that they don’t care about the kids,” Dalio said of those parents. “It’s that they are burdened in many instances with just one parent having two or three jobs. That really struck me.”

Later in the article Ms. Megan described the “hands on” experiences that led Ms. Dalio to break ranks with her fellow billionaires:

As the family’s foundation was expanding, Dalio said, “I really felt for the public schools and I really wanted to be helpful.”

But she realized she needed to be educated. So she began volunteering at an alternative high school in Norwalk where she started coming in once every two weeks and soon was up to two or three times a week.

“I learned really how many needs the kids have because they had kids with learning differences, kids that have had trauma in their lives, kids with emotional needs,” Dalio said, as well as kids who are hungry. “So it really is challenging for the school, the teachers to address all of those needs, especially with (budget) cuts” that eliminate social workers or mental health programs, she said.

Dalio said she learned through the alternative school and also with her own children, one of whom has bipolar disorder, that all children can succeed if given the right the services and help.

Her own son is in very good shape now, she said, “but it took a lot of resources and patience and time and you know if we didn’t succeed, he could have been just one of those kids.”

So I always feel a bit for the underdog . or the kids that don’t have opportunities and I see that if you give them what they need, which is sometimes not that much, (with) just a little attention and love, you can really turn them around.”

Many public education advocates— including this one— assert that too may of the top-down “reformers” are completely oblivious to the realities in public education because, unlike Ms. Dalio, they have no first hand experience as parents and have not taken the time to put their boots on the ground to find out why children struggle in school. What I found especially heartening about Ms. Dalio’s story was that she at one time was on the TFA-Charter School bandwagon and jumped off. And far and away the most impressive aspect of Ms. Dalio’s donations is her empathy and compassion for teachers and administrators:

Those who have worked closely with Dalio can’t say enough about how well she listens and how much she wants to learn and provide the best help she can.

“It sounds like it’s too good to be true, but (Dalio) is truly a partner,” said Erin Benham, president of Meriden’s teachers’ union and a member of the State Board of Education. “She sits with us, listens to us. She laughs. She loves being with students and she loves being with teachers.”

Anne Marie Mancini, deputy superintendent of East Hartford Public Schools, said Dalio has been “fantastic, supporting any initiative we have brought forward. We brainstorm together and she works right along with us. She’s like any other educator.”

Dalio has been working with teachers and administrators in Hartford, East Hartford, Meriden and New Haven as part of the foundation’s Connecticut RISE Network, which works to empower teachers and provide them with needed resources.

Another major focus for Dalio has been trying to help youth who are disengaged from school reconnect and get on track for graduation through its Connecticut Opportunity Project.

The initiatives funded through Dalio at the network schools have included summer leadership programs for high school students, the funding of full-time counselors who work closely with ninth graders to help keep them on track, funding for SAT prep and extensive professional development for teachers and administrators at the University of Chicago and other education centers.

Teachers and administrators say she also quietly does countless acts of kindness, including providing thousands of coats to students who don’t have them and lunch to teachers on Teacher Appreciation Day.

Not all billionaires are cut out of the same cloth, and when one is an advocate for public schools it offers a glimmer of hope that others may follow suit… and one writer seems to think that could happen:

David Callahan, editor of Inside Philanthropy, said he hopes “other philanthropists will pay attention to what (Dalio is) doing and the hands-on immersive approach she’s taken, which is how philanthropy should operate if it doesn’t want to alienate the people it needs to engage to succeed.

“If Barbara ever gets focused on the national level,” Callahan said, “I think that could be a big deal, given her mindset and the sensibility she brings to this space.”

Here’s hoping publicity for Ms. Dalio’s efforts spreads… because her time commitment to gaining an understanding of the challenges of public education has paid off. Who knows, maybe she will begin supporting politicians who want to direct more money to schools who serve to the “underdog” children, the ones who attend underfunded schools, the one who need “… just a little attention and love”. 

David Callahan Persuasively and Reasonably Defends the Billionaires

October 23, 2018 Comments off

Are ALL billionaires trying to undercut democracy or are they trying to inject innovative ideas into an ossified bureaucracy? In his thought provoking essay that appeared in Inside Philanthropy, “Enemies of the State? How Billionaires Think About Government“, David Callahan asserts that the great majority of philanthropists are not trying to undercut democracy, they are trying to inject it with innovative ideas.

While acknowledging that some philanthropists are eager to line their own pockets by reducing taxes and deregulating their businesses, he contends that most are interested in supporting and sustain democracy and, to that end, are interested in improving public education by injecting it with innovation. Early in his essay, Mr. Callahan asserts that most philanthropists are not aligned with those who have been demonized in this blog and the blogs of other anti-privatization writers:

The crusade to shrink government down to the size “that it can be drowned in a bathtub”—to paraphrase Grover Norquist’s memorable phrase—has never been a shared project of the upper class, but of a powerful libertarian faction within that class. Even the ceaseless drive for tax cuts over a generation has mainly animated wealthy people on the right. Many less ideological rich people aren’t so worked up over taxes; after all, when you’re loaded, you can easily afford them. And while polls show that the wealthy are more fiscally conservative than the public writ large, it’s also true they tend to favor many government functions: a globalist foreign policy, infrastructure, education, scientific research, space exploration, environmental protection, and so on. They understand that these things cost money…

If you put aside the libertarian ideologues like the Koch brothers and the DeVos family, what you’ll find is that most of today’s wealthy philanthropists think about government in much the same way that big donors and foundations have always thought about government: as a sector with enormous power to solve problems, but also with major limitations—such as a reluctance to take risks and experiment with new ideas, an inability to move quickly or pivot easily, and a tendency to neglect causes or concerns that don’t animate ordinary voters or which antagonize powerful interests.

In this assessment, I fear that Mr. Callahan overlooks the powerful grip the “…libertarian ideologues like the Koch brothers and the DeVos family”  have on the public’s impressions of “government schools”. He also fails to grasp the fundamental reality that those who have been identified as “successful” as a result of the existing paradigms in education are the most reluctant to “take risks and experiment” with the dominant paradigm because the rules inherent in the dominant paradigm have worked in their favor. Why should the existing method of sorting a selecting be changed if the changes might result in their children being placed at a disadvantage when the time comes for them to apply to the elite college their parents attended?

Mr. Callahan is especially upset with the way the Gates family has been cast in the privatization debates and the notion that ALL philanthropists share the world view of the Koch brothers and Betsy DeVos. He acknowledges that the Gates Foundation has been ham-handed in implementing it’s views, but believes that they truly value public education. He writes:

On education, the Gates Foundation has sometimes been cast as a key player in a philanthropic cabal to privatize public schools. This is a caricature. Rather, the foundation’s goal has been to influence how public education works in order to improve student outcomes. The huge Gates role in education is problematic; it gives a private couple way too much power over a key democratic institution. And that power has been abused, too, as a high-handed foundation has pushed through ill-conceived reform ideas.

Still, let’s be clear what’s going on here. Bill and Melinda Gates are not libertarians. Quite the contrary. Like many technocratic donors, they often want to expand the reach and authority of government.

The huge Gates push to enact the Common Core standards is a case in point. This has been viewed—rightly, I think—as a backdoor effort to enact national education standards in an area where federal power has always been limited. It’s not surprising that the right mobilized against the standards early on, pushing back against what they saw as an elite bid to elevate the power of a know-it-all state over the wisdom of local leadership—familiar battle lines that date back to the clash between Jefferson and Hamilton.

To be sure, there are some K-12 philanthropists who really do dream of substantially privatizing public education. But most of these donors, including top charter school funders, don’t believe in true privatization, and that’s not what they’re after.

What these donors want is forpublic schools to operate with more day-to-day autonomy, so that their leaders have the kind of power that effective leaders need, starting with the ability to hire and fire their own staff and control their own budget and infrastructure. These donors are not hostile to government per se; they are hostile toward government that is overly centralized, with a command-and-control model they view as archaic and ineffective.They see charter schools as a means to get around these institutional obstacles and reinvent how government works when it comes to education.

What the pro-charter investors fail to recognize is that the most conservative districts are the ones that serve children raised in affluence: the districts that reinforce the current mechanisms of college entry. The districts that strive to prepare their students for entry into “elite” colleges need to maintain the status quo because in doing so they are preparing their students for entry into colleges that seek a particular kind of student: the kind of student who is “well rounded”, has high grades, and comes from a stable home and stable community environment.

From my perspective, if philanthropists want to disrupt education they could do so by encouraging the “elite” colleges to accept more students from schools that serve children raised in poverty and offer incentives for the “well rounded” children who come from stable homes and stable neighborhoods and who earned high grades to attend the community colleges in their communities and the universities and colleges funded by their state government. Until the top 5% embrace those institutions and walk away from the “elite” schools the economic disparity in our nation will persist.