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Philanthropy and Democracy Don’t Mix Well… if at all

December 5, 2018

Medium blogger Hannah Brooks Olson recently posted a story titled “What Can We Expect from Billionaires? The difference between philanthropy and hush money seems smaller than ever“, a story that illustrates the perils of an economy that relies on the good will of philanthropists to fund services that are typically paid for by government. The post if full of juicy quotes, a few of which are offered below:

On the $15/hour wage as compared to Jeff Bezos’ wage:

To a lot of people, $15 per hour sounds like a lot—and indeed, it presents a significant raise to the seasonal workers who reportedly lived in their cars to work seasonal jobs for the online behemoth. It’s the basic minimum wage that millions have been seeking for years, both in the boardroom and at the ballot. But in Seattle, the town that helped make Bezos the billionaire that he is, it’s not nearly enough.

At that rate, a person needs to work more than 100 hours per week to really afford the average one-bedroom apartment in Seattle and not be considered “rent-burdened” by the government. In Washington state, in general, to rent a two-bedroom apartment, you have to earn close to $30 per hour.

Bezos, by comparison, earns nearly $2,500 per second — and pays, by comparison, a fraction in taxes.

Washington State’s regressive tax structure:

…the Evergreen State has the country’s most regressive tax structure. The richest percentile of residents — those who earn more than half a million dollars annually — pay three percent of their income in annual state and local taxes. Meanwhile, those who earn under $24,000 per year — many of whom live below the poverty line — shell out 17.8 percent.

How philanthropy is different from taxes:

Philanthropy is widely believed to be a noble pursuit; we collectively praise those who have more than enough, in part because it’s optional. The ultra-wealthy don’t have to give away their money, but sometimes they do. But it’s worth asking how they got so much money to begin with and whether or not their communities would need it if they had been paying their fair share from the start. Because while philanthropy is great, taxes are essential — and unlike charitable donations, they go to everyone.

And then she gets into the nitty gritty of how taxes are democratic and philanthropy is not… and the consequences of that difference, using pre-school funding as an example:

Whereas philanthropy picks and chooses what gets a benefit, tax dollars are allocated by the will of the people and the people they elect. Philanthropic money goes to whatever organizations wealthy people think are important, with little transparency. And often, those dollars don’t trickle down or benefit the folks who need it the most—for example, a museum filled with sci-fi memorabilia. Arts organizations that cater mostly to other rich people. Sports teams. Pre-schools that are located in “low-income” (as deemed by the organization) neighborhoods and based on a “customer-focused” approach.

The last sentence was especially breathtaking: “customer focused” preschools! While the philanthropists spend millions ensuring that their taxes remain low, while they pit city-against-city in a race to the bottom for tax revenues, they work on developing future customers in their “innovative” preschools.
Ms. Olson’s closing paragraphs are piercing and she concludes with a warning for those who think philanthropy is a good trade off for higher wages, more tax revenues, and better government services:

When billionaires choose to increase wages for their workers, it’s a savvy business decision that benefits the workers and the community, but it’s often cloaked as an act of grace. When they give money to charities, it’s generous and kind, to be sure, but it’s often applauded as enough. More than enough.

It doesn’t feel like enough.

At least, not in Washington state, where billionaires have held much of the decision-making hostage and used the promise of their good-hearted acts as bait for sweeter deals. Not in Washington state, where the poorest folks still pay the most in taxes and are expected to thank the billionaires for whatever scraps they decide to toss down. Not in Washington state, where we’ve tried to warn everyone else, and they don’t seem interested in hearing it.

Consider yourself warned…..

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