The Giving Season: Why the 99% Are Actually More Philanthropic Than the 1%
Continued from previous page
And to educate the general public, the Foundation spent $2 million on a campaign focused on the film Waiting for Superman that demonized teachers’ unions.
Most charter schools, the preferred solution for Gates, Broad and the Walmart family, are non-profits. But they see no reason why they need to remain non-profits. A 2009 guide book by the Philanthropy Roundtable noted, “many education reformers believe that EMOs (profit oriented management companies) hold real potential for revolutionizing public education. If investors in EMOs are able to deliver consistent student achievement and create a profitable investment vehicle, they will have discovered a highly attractive and sustainable model for charter schools specifically and public education generally.”
Today more than 700 public k-12 schools around the country are managed by for profit companies. In May, Ohio adopted legislation allowing for-profit-businesses to open their own taxpayer-financed charter schools, which led Bill Sims, head of the Ohio Alliance for Public Charter Schools to express his concern that this could “take the public out of public charter schools.”
In 2011 the Gates Foundation seems to have deepened its anti-government efforts, giving almost $400,000 to the conservatives’ legislative privatization network ALEC.
Warren Buffett is a major investor in the Gates Foundation. In 2011 he gave another $1.5 billion to the Foundation bringing the total to almost $10 billion so far.
Buffett is well known for writing and speaking about the unfairness of the tax system. He has signed on to an effort to force the 1% to pay a higher, not a lower tax rate than the 99%.
To date Buffett hasn’t been willing to give millions to underwrite a comprehensive campaign to convince legislators and the country to raise taxes on the rich. And the Gates Foundation hasn’t to my knowledge entertained the idea that it might spend $80 million on a campaign to increase the resources devoted to public education.
Eliminate the Charitable Giving Tax Deduction
In June 2010 Gates and Buffett launched The Giving Pledge, asking their wealthy compatriots to give away half or more of their wealth. Several dozen billionaires reportedly have signed on. Many will set up their own foundations and reap substantial tax benefits while retaining the right to decide where the money is invested. CPA Robert A. Green has estimated that this could result in $250 billion or more being diverted from the treasuries of state and federal governments.
We should eliminate the tax deduction for charities. The impact on giving will be modest while the savings to the public sector will be substantial.
A 2006 survey by the Bank of America found that over half of high-net-worth donors said their giving would stay the same, or even increase, if the tax deduction for charitable gifts fell to zero. The American Enterprise Institute notes “research shows that virtually no one is motivated meaningfully to give only because of our tax system.” Jack Shakely who ran the California Community Foundation for 25 years recently penned an Op Ed in the Los Angeles Times in which he noted that while the top tax bracket for individuals has plummeted from 70% in 1980 to 35% in 2003 (and according to the IRS the very rich are today taxed at an effective rate of 17 percent) charitable donations have remained almost constant, hovering between 1.7% and 1.95% of personal income per year.
This year governments may lose $50 billion or more because of tax deductions taken overwhelmingly by the rich for charitable givings intended primarily to enhance their status with their brethren or to attack the public sector. We can’t stop the rich from using their money for their own purposes (although we should certainly enact laws to stop them from unduly influencing legislation and elections). But we should not add insult to injury by giving them huge amounts of public sums to attack the public sector.