Assaulting the Golden Goose

Photo: Jacquelyn Martin, AP

Hunt Lawrence and Daniel J. Flynn, writing in The American Spectator make some interesting points on how they think Big Business gaming the Tax Code parallels Hollywood stars bribing their kids into elite colleges. Let’s take a look.

In the wake of Lori Loughlin, Felicity Huffman, and other parents allegedly using the foul means of their considerable means to gain admittance for their children to elite schools, Senator Ron Wyden (D-OR) wants to end deductions for parents who donate to schools their children attend. Wyden cites deductions for the naming of campus buildings and scholarships, and for sports tickets, as of particular concern.

This is, apparently, not Ted Kennedy’s Democratic Party.

“[H]eadlines about the wealthiest Americans buying access to our elite colleges and universities is just a new version of an old story,” he explained after the scandal broke. “While the prosecutor attempted to distinguish these crimes from payoffs in the form of buildings or stadiums to secure access for the undeserving, it is all part of the same corrupt system.”

Is it? I’m not sure. Bribing your kids into a school is certainly wrong, no question at all, and it hurts the kids that might otherwise have been admitted, they are the victim here.

But giving scholarships and or donating building is quite a lot different, I think. Yes, a few kids might not be admitted for a (possibly) unqualified offspring of the donor to be. But data suggests that legacy admittees are well above average, so it is questionable.

What is not questionable is that the building or the scholarship, or for that matter the golf course, will benefit many other students and the local population than the donor’s descendants. I don’t think it is the same thing at all. It is an (at least) quasi-public benefit.

Remember my Alma Mater, Purdue got its starts because John Purdue a wealthy local businessman contributed $150,000 plus a hundred acres of land to another $400,000 in contributions. That gave Purdue a good start to becoming an exceptional University and greatly benefitted the Lafayette area as well. Not the same at all as buying admittance for your kid, is it? But yes, he got his name on the whole joint. Most universities have similar stories.

The authors go on to compare this with Amazon paying not taxes again this year.

Amazon, certainly as famous as Lori Loughlin, manipulated the tax code in such a way as to pay zero in corporate income taxes for the last two years.

“Amazon, the ubiquitous purveyor of two-day delivery of just about everything, nearly doubled its profits to $11.2 billion in 2018 from $5.6 billion the previous year and, once again, didn’t pay a single cent of federal income taxes,” the Institute on Taxation and Economic Policy points out. The online behemoth, in fact, reported a tax rebate of $129 million for 2018. Just as YouTube celebrity Olivia Jade took a deserving kid’s spot at USC, Amazon took a tax rebate better used to fix a road, pay a soldier, or reduce the debt.

Amazon, like parents who time donations to colleges in anticipation of a child seeking admittance, does not break the law. But to most it seems like they take advantage of the existing law, which begs for reform.

Amazon, like Laughlin and Huffman, did not alone transgress decency here. They merely acted as the most famous of those who did. They used shortcuts. But they did not create these shortcuts.

In the case of Amazon, the same government deprived of revenue created the shortcuts. And despite political rhetoric decrying the Trump cut of the corporate rate, the rates do not represent the problem. The labyrinthian loopholes do.

This is simply poppycock. The politics of raw envy in action. Nobody is insinuating that Amazon even lobbied for these loopholes. They exist. I’m no great fan of Bezos but, there is no shame in paying the lowest tax that one can legally. In fact, it is immoral for a company to deprive its shareholders, whether one or millions of them, of the profits of the company, derived legally. Judge Learned Hand* said it best:

Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes. public duty to pay more than the law demands.

The only time that would change is if Amazon (or its stockholders) bribed Congress or the President, or for that matter the IRS to put in the loopholes. That many of them are unfair is pretty much a given, but they exist, and they exist for all taxpayers that they apply to equally.

Would a very low flat tax without deductions and only on individuals be more fair? Yes, Yes, it would. But to essentially accuse Amazon of tax evasion for doing what is not only legal but their fiduciary duty is well beyond the pale.

*Judge Hand was, in fact, a Progressive, although also believed in judicial restraint to a point, although he did indulge in legislating from the bench. What many conservatives today would call a “Hack-in-Black”.

Shaking up the Universities

This is interesting. I don’t have all that much contact with education anymore, other than college sports on TV occasionally. But I read a lot, and a lot of the nonsense on the internet comes out of various colleges. There is a backlash starting, just ask Mizzou or Evergreen, even Oberlin is starting to feel it. I don’t think that Harvard’s stupidity with its endowment is part of the backlash, but it sounds like that investment officer may well be a product of the left wing academy.

In any case, this is from Steven Hayward of PowerLine who is trapped at Berkeley.

I’ve been predicting, […] that universities would soon begin to divide into two entities—the STEM fields and related practical subjects (i.e., business and economics), and the social sciences and humanities, which would start to shrivel under the weight of the degradations the left has inflicted over the last 40 years. The number of students majoring in the humanities has declined by two-thirds since around 1980.

Here’s part of what I said at Arizona State:

I think we’re already seeing the beginnings of a de facto divorce of universities, in which the STEM fields and other “practical” disciplines essentially split off from the humanities and social sciences, not to mention the more politicized departments.

At this rate eventually many of our leading research universities will bifurcate into marginal fever swamps of radicalism whose majors will be unfit for employment at Starbucks, and a larger campus dedicated to science and technology education.

I added, incidentally, the interesting fact that a new trend is starting to occur in economics. Not only is the discipline subdividing itself into “general economics” and an even more math-centric “quantitative econometrics,” but several economics departments are formally reclassifying themselves as STEM departments for a variety of reasons, but among them surely has to be wishing to disassociate themselves further from other social sciences.

Well, now we have some concrete evidence of this crackup starting to happen. The University of Wisconsin at Stevens Point campus announced last week that it intends to cut 13 majors from the humanities and social sciences. Inside Higher Ed reports:

Programs pegged for closure are American studies, art (excluding graphic design), English (excluding English for teacher certification), French, geography, geoscience, German, history (excluding social science for teacher certification), music literature, philosophy, political science, sociology and Spanish.

The even better news is that some tenured professors are going to be laid off. Naturally, the faculty are not happy. Who’s next?

More at the link, of course.

That is on the whole good news, I think. You all know that I have a firm belief that the humanities provide the solid foundation for a well-rounded man or woman. But they are no longer, in many cases, teaching the humanities, they are indoctrinating left-wing ideas in the kids.

But departments that think Howard Zinn writes history, or that one can teach English without Shakespeare, have no salvage value. They are totally useless. Time to send them to the landfill, and find something of value to replace them.

This may be the only way to fix it, knock it all down, salvage what little might be usable and start over, and pay attention this time.

This is going to take some time, so one is advised to buy futures in popcorn. Gonna be a lot of leftist shrieking. It’ll sound better than most of what passes for music these days, at least.

On Education

We’re hearing a lot about how America is failing to train the engineers and scientists that we will need in the future. It’s true, we’re not. But whining about it and throwing federal money at isn’t going to fix it.

Why? we are not raising the kids with the discipline it takes to function in a right or wrong environment. See, the thing about the STEM(Science, Technology, Engineering, and Math) is that it is right or wrong. If you are designing a bridge over the river, the people using it don’t really care about your self-esteem, they want to know that the bridge isn’t going to do this.

But you know, there is more to the educational problem than trying to make everyone a winner. Why is it that a manufacturer told me, after he died that my Dad was the best engineer he ever worked with, after all dad didn’t finish the 11th grade? Sure, he was intelligent but the difference was, what education he got taught him the stuff he needed and taught him to think rationally. The real world doesn’t give a crap about your feelings. If you’re plumbing my house, I don’t want leaks, if you’re my architect, I want a solid structure, and I don’t care about how your big brother bullied you when you were four. Get over it.

And just where did we get the idea that everybody needs to go to college? Yep, we need engineers, and mathematicians, and historians. Don’t make the mistake that I’m disparaging the liberal arts, I’m not, they are crucial to building on our forefathers accomplishments. But you know what? We need electricians, plumbers, carpenters, even counter people at McDonalds, too. None of those jobs need a bachelor’s degree, let alone a masters or doctorate.

The other thing is, take your masters in women’s studies and try to get a job, I hope you like Starbucks and maybe $10 an hour. Have any idea what a master electrician makes? It’s about $25-50 an hour depending on where you are and what you know, sometimes it’s more. How do you get there? The old-fashioned way, study in high school, get into an apprenticeship program (there are schools, too.) work for 5 years (yeah, you get paid, too, no student loans!) and there you are. The other trades are much the same. You won’t be as physically comfortable as a Professor of Constitutional Law at Harvard, but the living is about as good, and you’ll do more real good for people too.

If you want to be that engineer, many of the really good schools have coop programs, where you go to school for a semester and then work for a semester, and so on. By the way, unless it’s changed these are not unpaid intern jobs, they are real jobs, with real responsibility, and real paychecks, too.

Then there is the military, last I knew one enlistment would nearly entitle you to a college education, not to mention that you’ll be mature enough at that point to take real advantage of it.

But the key to the whole thing is to get over yourself, you are important but mostly to yourself, the real world is like God in a way.

By their works ye shall know them.

And for you young guys out there, one of the things that has changed since I was young, there are a lot of beautiful young women in these professions, too.

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