Philanthropy a Threat to Democracy...

5fish

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Big donor philanthropy ... is an exercise of power. It is a form of power that is unaccountable, low on transparency, donor directed, and by default perpetual

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Giving to charity can be a good thing. Philanthropists fund programs in the arts, education, healthcare, civil rights and the environment. And there’s benefit to having both tax money and philanthropic money directed toward public services to feed and clothe the poor. After all, philanthropic charities and religious organizations fund critically important endeavors, such as malaria research or the operation of soup kitchens and homeless shelters across the nation. Some argue that philanthropy can address issues that would otherwise go unattended, precisely because the donors aren’t limited by public opinion

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Big donor philanthropy ... is an exercise of power — the attempt to direct private assets toward some public purpose,” wrote Reich. “It is a form of power that is unaccountable, low on transparency, donor directed, and by default perpetual. Big philanthropy is a plutocratic element in democratic society.”

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From the earliest moments in which modern philanthropy emerged in the United States, there were concerns about the relationship between democracy and philanthropy,” said Ben Soskis, a historian and research associate at the Center on Nonprofits and Philanthropy at the Urban Institute, a Washington, D.C.-based think tank. “There were always concerns about concentrated power, and how that power was expressed in charitable institutions.

Here is this...


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“Big Philanthropy is definitionally a plutocratic voice in our democracy,” Reich told me, “an exercise of power by the wealthy that is unaccountable, non-transparent, donor-directed, perpetual, and tax-subsidized.

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“A hundred years ago, there was enormous skepticism that creating a philanthropic entity was either a way to cleanse your hands of the dirty way you’d made your money or, more interestingly, that it was welcome from the standpoint of democracy,” Reich told me at the Aspen Ideas Festival, which is co-hosted by the Aspen Institute and The Atlantic. “Because big philanthropy is an exercise of power, and in a democracy, any form of concentrated power deserves scrutiny, not gratitude.”

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First, big foundations are unaccountable. They answer neither to voters or to marketplace competition.

Second, they do not have to be transparent. They file one tax form. The $8 billion Simons Foundation International
doesn’t even have a website.

Third, they are donor-directed. The employees—the people on the ground— “can’t determine the mission” of the organization

Fourth, the donor’s intent must be respected even when the donor has died. Societies grow and change, but the mission defined by the creator of the foundation remains the mission in perpetuity

And fifth, on top of all this, foundations are tax-subsidized. “We’re at a moment in American society in which the winners in the marketplace attempt to diminish their tax burdens, both corporately and individually, as low as they can legally go,” Reich told me. “Then having diminished their tax burden as low as it can go, they turn around and set up a private foundation, taking a further tax break.


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“Instead of extending our enormous gratitude to the greatest philanthropists among us as these icons of civic beneficence, we should be scrutinizing and criticizing them,” Reich said. “Not because philanthropy is necessarily bad, but because it is an exercise of power.”

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Reich does have some hope for the foundations—a suggestion for how they could do their work in ways that benefit democracies like ours. “Foundations,” he said, “should be making long-time-horizon, risky experiments in social innovation that the government won’t do and the marketplace is unlikely to do.

 

5fish

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Here another take on the topic more detail...


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One hundred years later, big philanthropy still aims to solve the world’s problems—with foundation trustees deciding what is a problem and how to fix it. They may act with good intentions, but they define “good.” The arrangement remains thoroughly plutocratic: it is the exercise of wealth-derived power in the public sphere with minimal democratic controls and civic obligations. Controls and obligations include filing an annual IRS form and (since 1969) paying an annual excise tax of up to 2 percent on net investment income. There are regulations against self-dealing, lobbying (although “educating” lawmakers is legal), and supporting candidates for public office. In reality, the limits on political activity barely function now: loopholes, indirect support for groups that do political work, and scant resources for regulators have crippled oversight.

Because they are mostly free to do what they want, mega-foundations threaten democratic governance and civil society (defined as the associational life of people outside the market and independent of the state). When a foundation project fails—when, say, high-yield seeds end up forcing farmers off the land or privately operated charter schools displace and then underperform traditional public schools—the subjects of the experiment suffer, as does the general public. Yet the do-gooders can simply move on to their next project. Without countervailing forces, wealth in capitalist societies already translates into political power; big philanthropy reinforces this tendency.
 

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Here is an article that gives solution to this Philanthropic threat...


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The last time Congress overhauled the legal framework for the philanthropic sector was in 1969, a period of relative equality in US history. Philanthropic reform should have several objectives:

  • Promote pluralism and a vibrant independent sector outside of political, state, and corporate control.
  • Reverse top heavy philanthropy trends by modernizing the incentives and rules to encourage broader giving by wide segments of society, especially the non-wealthy.
  • Ensure the timely flow of funds for public benefit while discouraging the warehousing of wealth.
  • Align tax and charity rules with the public interest and protect the integrity of our tax system.
 

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Here is an article saying the Philanthropy is here to stay even if you tax the rich so live with it...


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As a result, like it or not, big philanthropy—and the urgent need for more of it—will remain a major feature of American life going forward. The real question that critics of billionaire giving need to focus on is not “how do we get rid of these plutocrats?” Rather, it is “how can we encourage the super-rich to give much more in ways that meet the pressing needs of the most vulnerable people in America and the world, don’t further amplify their already outsized influence, and help to shift who has power in society?
 

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Here is a summary of two books on the topic... plus a bonus book...


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Another defence is that the makers of great wealth can apply their unique business skills to society’s deepest problems. In theory, this is a testable claim. The results are not that encouraging. Data from sources cited in Reich’s book show that the wealthier the donor, the less goes to the needy. Barely a fifth of philanthropy from the richest Americans goes to the poor. A lot goes to the arts, sports teams and other cultural pursuits. In addition to naming rights, these tend to bring front-row seats, premium access and private guided tours. A large share goes to religion. Mormons who tithe — give a tenth of their income to the church — do so with a nice pay off from Uncle Sam. For a nominally secular country, the US government spends a lot of tax dollars on worship.

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Among the most common phrases heard at Clinton’s annual donor conference was: “The right thing to do is also the smart business thing to do.” Reich judiciously weighs the philosophical pros and cons of tax-subsidised philanthropy. Giridharadas offers a stinging jeremiad. In his view, we live in an age that enables the rich to keep more and more of their gains, many of them ill-gotten. Then we flatter them for money and advice. “Today’s elite may be among the more socially concerned elites in history,” he writes. “But it is also, by the cold logic of numbers, among the more predatory in history.
 

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We give the rich tax breaks why they do not pay any tax anyways...

Here it seems the wealthy do not pay their fair share or any share at all at times. Two article pointing out their evil.... Its legal but is it right , or moral, or ethical , or fair...

www.propublica.org

The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax
ProPublica has obtained a vast cache of IRS information showing how billionaires like Jeff Bezos, Elon Musk and Warren Buffett pay little in income tax compared to their massive wealth — sometimes, even nothing.


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In 2007, Jeff Bezos, then a multibillionaire and now the world’s richest man, did not pay a penny in federal income taxes. He achieved the feat again in 2011. In 2018, Tesla founder Elon Musk, the second-richest person in the world, also paid no federal income taxes.

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Many Americans live paycheck to paycheck, amassing little wealth and paying the federal government a percentage of their income that rises if they earn more. In recent years, the median American household earned about $70,000 annually and paid 14% in federal taxes. The highest income tax rate, 37%, kicked in this year, for couples, on earnings above $628,300.

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The results are stark. According to Forbes, those 25 people saw their worth rise a collective $401 billion from 2014 to 2018. They paid a total of $13.6 billion in federal income taxes in those five years, the IRS data shows. That’s a staggering sum, but it amounts to a true tax rate of only 3.4%.



www.propublica.org

The Secret IRS Files Short Form: A Quick Guide to What We Uncovered
10 important takeaways from ProPublica’s first report on a vast collection of tax records for America’s wealthiest.


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1. Never-before-seen tax records pull back the curtain on how America’s wealthiest manage to pay so little — if anything — in income tax.
The data provides an unprecedented look inside the financial life of not just Bezos but other American titans, including Elon Musk, Warren Buffett, Bill Gates, Rupert Murdoch, Mark Zuckerberg and many, many more
 
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