Don’t celebrate tax-dodging billionaires

Smith

Perhaps you were among those who celebrated investor and philanthropist Robert F. Smith for surprising the Morehouse College Class of 2019 by paying all of their student loan debt.

But I saw no reason to celebrate. In fact, viral media coverage gave me the impression that the graduation ceremony was more about glorifying Mr. Smith’s prevailing vanity than celebrating these students’ milestone achievement.

Focus of attention

Of course, I suspect this is precisely what Smith wanted. Because he could easily have made this gift at another time. That way he would not have upstaged the graduating seniors – not just at Morehouse but at every other college in the country this year.

More to the point, though, this is almost as troubling as cheering a yacht owner for coming upon a sinking dinghy in the Mediterranean and rescuing one African migrant while leaving 99 to die.

African migrants should not have to depend on a yacht owner happening by to avoid drowning in the Mediterranean Sea. Likewise, college students should not have to depend on a philanthropist getting an honorary degree to avoid drowning in a sea of debt.

How to do it

Instead,  tax reform should compel rich investors like Smith to pay at least the same share of their income in taxes as their administrative staff do. If that happens, we’d be able to fund programs  like this as published in USA Today on April 17:

“Vermont Sen. Bernie Sanders introduced a bill last week, which would abolish tuition and fees at public four-year colleges and universities for students from households making $125,000 or less per year, and would make community college tuition-free for students from all income levels. …‘I’ll tell you how we’re going to pay for it’ [he said]. … ‘We’re going to put a speculation tax on Wall Street.’”

Frankly, the rich would truly earn the reputational goodwill they covet by lobbying the government to implement tax reform to effectuate such fundamental fairness and public purpose.

They could also join Warren Buffet and Bill and Melinda Gates in “The Giving Pledge” to donate at least half of their wealth to philanthropy during their lifetime or at death. Note that the $40 million Smith pledged to those Morehouse seniors does not amount to even one percent of his wealth, which Forbes estimates at $5 billion.

The federal government has a greater compelling interest in tuition control than state governments have in rent control. It clearly makes more sense to deflate tuition costs than for rich people to inflate their reputations by paying off the debt tuition causes.

Following Harvard

With all due respect to Donald Trump, I can think of no better way to make America great again than to make college affordable again. This is why I celebrate the colleges that are following Harvard University’s lead in doing this.

According to the Harvard College Griffin Financial Aid Office, “Once you are admitted to Harvard, we work closely with your family to ensure you can afford to come here. Because we seek the best students regardless of their ability to pay, we are committed to meeting 100 percent of demonstrated financial need for all four years.”

Lest you think I’m all about hating on Smith, I heartily applaud him for using his influence to help 1,000 students score paid internships according to the Atlanta Journal-Constitution:

“…the program [internX] is helping ‘rising sophomores with at least a 2.8 GPA from ethnically underrepresented groups’ land an eight-week summer internship in the fields of science, technology, engineering and mathematics. AT&T, Price Waterhouse Coopers, Deloitte, Citi and Vista Equity Partners are reportedly among the companies that have pledged to take on internX candidates.”

Bravo, Mr. Smith!


Anthony L. Hall is a native of The Bahamas with an international law practice in Washington, D.C. Read his columns and daily weblog at www.theipinionsjournal.com.

1 COMMENT

  1. Rich white people have been giving money away for years to avoid paying taxes and at the same doing good in the communities. No of which, Black people have benefited from. As a former financial advisor, we were always looking for ways to help our clients reduce their tax liabilities. When I worked for H&R Block, I learned about “Tax Avoidance vs Tax Evasion.” One is legal and the other is not. I know you know the difference. The fact is that their is nothing wrong with getting a tax break and in the process doing something good for the community sake. You said he did it out of vanity. I really don’t know.

    Regardless of his motivation, I think we have used this opportunity to raise awareness about financial literacy, taxes, how making donations to non profits can serve a dual purpose: We can get a tax break while contributing money to help solve a problem that plague our community. He could have given the money to numerous other causes, and we wouldn’t have heard anything about it. The other issues you raised may have validity, I just think that those of us that have the knowledge, should have used this as an opportunity to educate the community on what just happened financially, and how we could all benefit from it moving forward.

    No Love lost, Just my thoughts.

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