Monday, April 17, 2023

WTF does race have to do with taxes?

Beloveds, 

You can listen or read. Here's the transcript~

lovu,

Kendke

GENE DEMBY, HOST:

What's good, y'all? You're listening to CODE SWITCH. I'm Gene Demby.

LORI LIZARRAGA, HOST:

And I'm Lori Lizarraga.

DEMBY: And on this episode, we are talking taxes.

LIZARRAGA: Oh, taxes. They're ridiculous. They're complicated. And, to be honest, Gene, they're kind of scary.

DEMBY: Listen. Listen. So I keep thinking about that viral tweet that goes something like, my son asked me to explain taxes. So I gave him a bag of M&M's and told him that he has to give me some of those M&M's. And I know how many of those he has to give me, but he has to guess himself. And if he gets this wrong, he goes to prison.

LIZARRAGA: Which is a fun way to explain taxes as candy and prison as prison.

(LAUGHTER)

DEMBY: But like you said, Lori, taxes are ridiculous. They're scary. But this is CODE SWITCH, baby. What do taxes have to do with race and identity, right? Well, as it turns out, kind of everything.

LIZARRAGA: Yeah.

DEMBY: Today on the show, we're going to get into how our tax system has benefited white people, how it's hurt Black folks, and we're going to talk to the person who helped uncover how race, in all these ways we might not realize, affects just how much we owe in taxes.

LIZARRAGA: Just this January, in fact, there was a giant study by Stanford University and the Treasury Department that got a lot of attention for drawing that exact connection.

DANIEL HO: The big thing that we found in the paper - it's a really disturbing finding - is that Black taxpayers are three to five times as likely to be audited as everyone else.

LIZARRAGA: Three to five times more likely to be audited if you are Black - a finding that you, like us, are probably WTFing (ph).

DEMBY: That voice belongs to Daniel Ho. He's the professor at Stanford who led this study, and he and his team were WTFing this too. But that's not all they found. The study also uncovered that the IRS is way more likely to audit lower-income earners who claim certain tax benefits. Daniel said that's in part because it's just cheaper and easier for a cash-strapped agency like the IRS to go after folks like them because they're kind of the lightest lift. All the IRS has to do in these cases is just slap a stamp on an envelope, mail those taxpayers an audit notice and, if those lower-income taxpayers don't respond, they just don't get their refund. So that's money in the bank for the IRS.

LIZARRAGA: Right - 'cause in any given year, the IRS is trying to recover around half a trillion dollars...

DEMBY: Whew.

LIZARRAGA: ...In taxes that are owed but go unpaid. And it's way harder to go after rich folks who are - let's be real - probably better at hiding their money. And they have money to hide.

DEMBY: Exactly. And just to get back to the race stuff, it's like, how are these racial disparities in who gets audited even happening, right? 'Cause it's not like we fill out demographic information like that when we do our taxes.

HO: We also don't think that what is going on here is any evidence of explicit bias - after all, IRS doesn't observe race and ethnicity of the taxpayer - but really stem from sort of existing institutional priorities and selection processes for how audits get surfaced.

DEMBY: But what goes into that selection process for how the IRS decides who to audit is a secret, so we don't really know why the IRS decides who to come for.

LIZARRAGA: And that's the inherent dilemma of this official colorblindness - right? - where race isn't explicitly part of how agencies like the IRS does its business.

DEMBY: Right. And in some cases, it's essentially against the rules for some federal agencies to even collect race data. And that doesn't mean that racial discrimination isn't there, that it's not happening. It just makes it harder to detect, which is exactly what the study highlighted.

LIZARRAGA: When Stanford published all this earlier this year, it got a lot of attention. The IRS denied that there was something amiss in how people were being audited based on their race, to which their critics were like, well, how would you even know if you're not keeping track of racial data?

DOROTHY A BROWN: So this IRS, we can't be racist 'cause we're colorblind - really? That's just a accident? Stuff happens? No, I'm not buying that.

LIZARRAGA: (Laughter).

DEMBY: That is Dorothy A. Brown. Dorothy is a law professor at Georgetown. She's a tax lawyer by trade. And, for the purposes of this episode, she is the author of "The Whiteness Of Wealth: How The Tax System Impoverishes Black Americans And How To Fix It."

BROWN: When the IRS said, we don't know your race, it was never the truth. You know what the IRS knows? Your name and your ZIP code. When you give me a ZIP code, I can tell you what the race of the person whose tax return I'm looking at is.

DEMBY: That's exactly where Daniel and his colleagues started when they were on the hunt to suss out whether there was racial discrimination happening with these tax audits. So they started with people's names and their ZIP codes to get to other demographic information, like race, which is exactly what Dorothy is talking about because...

LIZARRAGA: I knew you were going to say this.

DEMBY: (Imitating air horn) ...Housing segregation is in everything.

LIZARRAGA: There it is.

DEMBY: I mean, I guess it should be, like, a sad trombone, like (imitating "The Price Is Right" losing horn).

LIZARRAGA: Yeah, yeah. This is still very bad.

DEMBY: It's still very janky. But really, though, in this case, Daniel and his crew did not have demographic data from the IRS, so how could they draw this connection between race discrimination and tax audits? Well, they did have census data, which gave them a good idea of where people lived and an even better idea of the race of the people in the neighborhoods in which anyone lives because - housing segregation.

LIZARRAGA: And they knew which census blocks were being audited the most.

DEMBY: Yes, exactly. So they could compare who was being audited the most...

LIZARRAGA: Right.

DEMBY: ...Against all the demographic data they collected to prove there was, in fact, a disproportionate number of Black folks being audited.

LIZARRAGA: And all those proxies show just how intentional you have to be to figure out whether something colorblind is fair and useful or actually just discriminatory.

DEMBY: Mmm hmm. Yep. Daniel's study on race in audits kicked off a furor in Washington, but he says all this really started with Dorothy Brown.

LIZARRAGA: Yeah. Daniel said Dorothy was a pathbreaker in illuminating how race shapes America's tax system.

DEMBY: And what's bananas, Lori, is that Dorothy became an expert on this completely by accident.

BROWN: I wanted a job in law where I didn't have to deal with racism because, growing up in the South Bronx, I dealt with racism a lot. So I knew I wanted to be a lawyer. And I decided, well, I want to do law that has nothing to do with race. I know. I'll be a tax lawyer because the only color that matters is green. And here I am. Race is a critical component of tax, and it just hasn't been thought of that way.

DEMBY: I wanted to know more about Dorothy's superhero origin story, and she said that her revelation about how much race gets braided into our tax policy came about when she sat down to help her parents do their taxes. So I asked Dorothy to set the scene.

(SOUNDBITE OF MUSIC)

BROWN: Yeah. So, you know, as a result of having an accounting degree, I did my - you know, like every good child, I did my parents' tax returns. And every April - you know, every time I did their tax returns, I was struck by the idea that I thought they paid too much in taxes, that I couldn't figure it out. So my mother was a nurse in a nursing home, and my father was a plumber for the New York City Housing Authority. So each of them made roughly equal amounts of income, and each of them made half of what I made. So, you know, I would - whenever I did their taxes, this issue came up. But I had a real job, right? So I didn't have time to sit and think about why they were paying too much in taxes. But I - it always nagged at me.

And fast forward - when I was a law professor, I actually had time. So I decided to just start reading race publications, to start reading about race and to put my tax lens on the race data to see if I could make the connection that way 'cause there's lots of race data but not viewed through a tax lens. And I came across a study put out by the Commission on Civil Rights on the economic status of Black women. And I'm reading it, and it says that married Black women contribute 41% to household income. And that was my eureka moment. That means nothing to anybody else but to these tax eyes, oh, my gosh.

My mother and father earned roughly equal amounts. And what our tax law does to those married couples is cause their taxes to increase when they marry. So when I saw that, I said that's why my parents are paying so much money in taxes - 'cause they're married to each other. If they were single, living in a household, their tax bill would not have been as high as it was because they were married.

LIZARRAGA: OK, so Dorothy's lightbulb moment came about when she realized that couples earning the same or similar wages get hit harder when they file their taxes jointly, right?

DEMBY: Yes.

LIZARRAGA: But we know that, historically, Black married couples were way more likely to have two income-earners because, well, you know, racism. I mean, Black people were paid less for their labor. Both spouses needed to work to make ends meet. So all those Black married couples were being paid less and paying more in taxes?

DEMBY: Listen, listen. This is what made my brain explode out of my ear when I was reading Dorothy's book. Like, isn't being married supposed to help your financial situation?

LIZARRAGA: Right.

DEMBY: I mean, marriage is such a huge part of the discourse around Black economic stability that there was even a policy by the George W. Bush administration trying to get Black folks to get married because the argument was it would help Black people build wealth and to catch up with white folks. And Dorothy and I got into all of this in our conversation about how the marriage benefit in taxes has really been a marriage penalty if you're Black.

BROWN: In fact, you know, one of the reasons people on the right argue Blacks are living in poverty is because we're not married, right? Then what you find out is, yeah, when we're married, our taxes go up. So that's not - marriage isn't helping us. And how it works is, there are certain couples that get tax cuts when they get married. Those are the single-wage-earner households, where one spouse works in the paid labor market, and the other spouse stays at home.

DEMBY: Right.

BROWN: We don't tax the value of the stay-at-home services. We just tax the wages of the paid-labor spouse. Those are the married people who get a tax break from marriage. When you have two spouses working and contributing roughly equal amounts, their tax bill goes up. They'd be better off living together, as the right would say, in sin and paying less taxes and building wealth.

DEMBY: And so there's a point in the middle 20th century in which married white women start entering the workforce, too, right? And so you would think that this penalty that married, double-income partners are facing would hit white people, too, right? Like...

BROWN: Oh, you've nailed it. When I first started doing this research, there was always a category of married white couples who looked like married Black couples, in terms of their spouses contribute roughly equal amounts. That number was small in the beginning, and then grew over time. And, in fact, I believe the reason that the Trump tax cuts minimized or eliminated the marriage penalty for significant percentages of married couples is because white folks started facing what Black folks faced decades ago. So what the 2017 tax cuts did was eliminate the marriage penalty for married couples who make less than five or six hundred thousand dollars. And I believe it was because a significant percentage of white couples started experiencing marriage the way my parents were.

DEMBY: So they started experiencing marriage the way your parents were, in the sense that white women were making...

BROWN: Roughly equal amounts to their...

DEMBY: Spouses.

BROWN: Yes, to their spouses.

DEMBY: And, no offense, Dot, but talking about taxes and racism is really unsexy. So how do you get people to pay attention?

BROWN: (Laughter).

DEMBY: I'm not trying to shade, you know, tax law, but...

BROWN: No. Welcome to my world, Gene, OK? I've been - but here's the thing. I have been writing about race and tax since the mid-to-late '90s. You and I would not be talking had I not written the book "The Whiteness Of Wealth" and it had not gotten the attention that it got. So what I realized is writing law review articles that nobody reads isn't helping my cause. And my cause was transforming the national conversation on tax policy so that you could never think about taxes again divorced from systemic racism. Or, as I say, tax policy is a civil rights issue.

DEMBY: Coming up, y'all, we're going to get into that history with Dorothy, who says we need to treat these problems in our tax system with more urgency.

BROWN: We cannot solve the racial wealth gap without making sure it's not perpetuated by our tax policies. It's the silent wealth killer for Black families.

LIZARRAGA: Stay with us, y'all.

(SOUNDBITE OF MUSIC)

DEMBY: Gene.

LIZARRAGA: Lori.

DEMBY: CODE SWITCH.

LIZARRAGA: We've been talking about how race shapes the way Americans do taxes, like why the marriage benefit is really a marriage penalty for Black folks. And maybe no one has been sounding the alarm on this louder than Dorothy A. Brown. I think we all know by now that our tax system is shaped by wealth and class. Most of us are not experiencing the tax system the way that rich folks are.

DEMBY: Right. And as we learned while researching this episode, there are all sorts of set asides and tax breaks for stuff like, you know, owning horses and owning a private plane or building a pool and paying to keep that pool in good condition.

LIZARRAGA: All those normal people things, which is why I keep telling my partner to get me a plane and a pool and a pony, Gene, for tax reasons.

DEMBY: Listen; I'm going to come visit for tax reasons.

(LAUGHTER)

LIZARRAGA: OK, Gene, so how did we get here?

DEMBY: Yeah, so Dorothy helped me trace some of the booby traps in our tax system, like how our tax code supercharges discrimination in housing and even how it makes it harder for lots of Black folks to pay back their student loans. So I asked Dorothy to walk us through the history of our modern tax system, whereby some people get tax breaks on the front end and reap all the benefits on the back end, while a lot of other people get neither.

(SOUNDBITE OF MUSIC)

DEMBY: So I think, at this point, we all know that tax policy, the tax code, redounds to the benefit of the rich, like, rich people, in countless ways.

BROWN: Right.

DEMBY: But how - one of the arguments you make in the book is that the tax code has historically worked specifically against Black folks.

BROWN: Yes.

DEMBY: Can you explain how that has happened?

BROWN: Yes. So in the beginning, only the rich people paid taxes. And then, basically, we had World War II. We had to move from only the richest Americans to basically everybody else, right? Then we had the New Deal, so it cost more money. So you had this expanded tax base. But think about it. Black Americans are paying taxes, too, to a federal government that excludes them from New Deal provisions. And nobody's offered to give us our money back, right? We're paying for second class citizenship. We're paying for separate but equal, right? So we're paying for discrimination.

DEMBY: Could you actually elaborate on this idea that you see this explosion...

BROWN: Yes.

DEMBY: ...Of New Deal policies that are really popular, right? But also you get FHA loans.

BROWN: Yes.

DEMBY: You get all of these things that basically create...

BROWN: GI Bill that excludes the Black GI.

DEMBY: The GI Bill.

BROWN: Yeah.

DEMBY: You basically subsidize the creation of the white middle class.

BROWN: Of white wealth, yeah.

DEMBY: Yeah.

BROWN: Yes. So we're paying taxes that's funding the government that's making sure that, you know, my parents weren't eligible for an FHA-insured loan, or my grandparents - right? - that were making sure that returning Black veterans didn't have access to education loans, didn't have access to home loans. But those Black veterans, when they were working, was paying taxes into a system that was disadvantaging them. And it was paying for a system that was propping up the expanded homeownership rate. So from 1940 to 1950, we saw a minority of white homeowners become a majority of white homeowners with the assistance of federal policy and with Black taxpayers helping to foot the bill.

So for example, think about the tax subsidies for homeownership that came in - well, that have been in the code since the beginning. And then there's a certain provision if you sell your home at a gain that came in 1951. Well, in 1951, the majority of white Americans were homeowners. So they could benefit from that provision. We have never had a point in time where the majority of Black Americans were homeowners. So any tax subsidy for homeownership is a tax subsidy designed for white Americans.

(SOUNDBITE OF MUSIC)

DEMBY: So I mean, it seems like it's basically impossible to, like, extricate home ownership from taxes, right?

BROWN: Yeah.

DEMBY: And the wisdom goes, you know, buy a home. You get a bunch of tax breaks.

BROWN: Yes. Yes.

DEMBY: That helps you build family wealth. It's really central to the way, as you know - like, the way you talk about...

BROWN: Yeah.

DEMBY: ...Fixing the wealth gap...

BROWN: Absolutely.

DEMBY: ...is, like, getting Black people into homeownership. And one of the things you found that kind of blew my mind is that the tax break that's supposed to come with homeownership is not even really a thing.

BROWN: So first of all, you know, we have the mortgage interest deduction. And economists, who don't agree on much, agree on this. The mortgage interest deduction does not encourage anybody to buy a home.

DEMBY: Right.

BROWN: So that tax break does nothing to the homeownership rate. And the tax break that says when you sell your home at a gain is a wonderful thing, except research shows that Black Americans are far less likely to be able to have that gain on sale. And we don't allow a tax break for losses. And Black Americans are more likely to sell their homes for a loss.

DEMBY: Can we talk about that? Can you just explain that a little bit?

BROWN: Sure (laughter). Sure. But it starts with the backdrop of where you started, that there's this idea that because white Americans were able to build wealth through homeownership, Black Americans can mimic that. And Black Americans cannot mimic being white, which is what really is the reason why white Americans have built homeownership wealth.

Where we live is in different neighborhoods. So most Black homeowners live in racially diverse or all-Black neighborhoods. Most white homeowners live in all-white neighborhoods. And since the majority of homebuyers are white homeowners or prospective white homeowners, their preferences make the market. They're not interested in buying homes in all-Black or racially diverse neighborhoods. They're only interested in buying homes in neighborhoods with very few Black Americans. So if you are the only Black homeowner in an all-white neighborhood, then that's a really good financial investment for you. You're going to build wealth the way your white peers do. But it's going to come at a price.

DEMBY: Yes.

BROWN: Your white neighbor may call the cops on you.

DEMBY: Yep.

BROWN: If you have children and you send them to school, they're going to get tagged as delinquents, even though they're engaging in the same behavior that their white peers are. So there's all this racism you're going to have to deal with. Whereas, if you buy in an all-Black or racially diverse neighborhood, you don't have those issues, but you have issues of being able to sell your home or being able to borrow against it so that you can put your kid through college, right? So homeownership for Black Americans does not work the same way as it does for white Americans. It just isn't - it isn't the same as, well, it worked for them; it should work for us.

DEMBY: I mean, my wife and I bought our house in D.C. during the pandemic, and that was one of the things. Like, oh, we married now. We bought a house. We about to feel all these tax breaks. We pay taxes every year. We never get money back. We're like, oh, we thought it was going to be less. Our tax burden is - might be a little bit higher than it was before, but, you know...

BROWN: It's a wash.

DEMBY: It's a wash, right? Like, it's - I mean, you know, we're not paying a landlord, which is good.

BROWN: Right. And you're building equity.

DEMBY: Absolutely.

BROWN: But it's not this panacea that people make you think it is.

DEMBY: I'm going to turn to student loan debt.

BROWN: Yes.

DEMBY: So a lot of discourse around student loan relief, student debt relief has centered on the racial justice angle, that Black folks carry a bigger debt burden because we have so much less household wealth than white families. And so, when we go to college, we...

BROWN: Yes.

DEMBY: ...Have to take out more loans to finance college. But you say that how much debt that people are carrying because of their race is also shaped, in a bunch of invisible ways, by tax policy. So how are taxes part of that story?

BROWN: So one of the biggest breaks is an interest deduction for student loans. The problem is it's capped at $2,500. And when you look at the average debt load of a college graduate or even a not college graduate, which I'll get to in a minute, it's higher for Black Americans than white Americans. So they usually have more debt, and they're capped out, right? So the $2,500 does not allow...

DEMBY: Yeah.

BROWN: ...Most Black taxpayers their full interest deduction, right? And it's worse. If two Black college graduates get married, when they were individual filing, they each had a $2,500 cap. When they get married, they both have a total $2,500 cap.

DEMBY: Wait. I'm sorry. Why?

BROWN: Yes. Hello.

DEMBY: Why would they - why would that go - why wouldn't that just be, I mean, debt...

BROWN: Hello.

DEMBY: Well, I guess their credit becomes...

BROWN: But still, it's the joint return. But it's like, the idea that you don't make an accountability for two people being married with student debt is ludicrous, right? That's a tax policy angle that could be fixed, right? But - you know, so the worst of all possible worlds is for two Black college graduates to get married, right?

DEMBY: Oh, my God.

BROWN: Because they've got this high debt load (laughter), and then they can't take the interest deduction. So that's, like...

DEMBY: So I'm imagining a scenario where two Black college graduates get married, can't take an interest deduction on their debt load.

BROWN: Yes.

DEMBY: They buy a house, right?

BROWN: Yes.

DEMBY: They have all these - right? And then they also are dealing with the marriage penalty because they probably make something...

BROWN: (Laughter) Yes.

DEMBY: So I'm like, oh, my God.

BROWN: I once had a student say, so, professor Brown, are you saying that we shouldn't get married? I said, do not go home and tell your grandmother that. I did not say that.

(LAUGHTER)

DEMBY: Like, all these students come to a tax law class, and they come out of class like, our professor told us not to get married, not to buy a house and that college was going to be - might be a drag on our earnings down the line.

BROWN: (Laughter).

DEMBY: They're like, oh, my God, what did I sign up for?

BROWN: And the most depressing chapter in my book was the college chapter because that's when I came across the statistic that said 60% of Black students who start college don't graduate.

DEMBY: That's me. Yeah.

BROWN: And they leave with huge amounts of debt. It was heartbreaking. That statistic just blew me away.

DEMBY: So I'm a Black college dropout, and I still carried a big debt...

BROWN: Yes. See?

DEMBY: ...You know, once I applied to college and didn't finish. How does the tax system show up in the way I file my taxes? How does that affect our financial outlooks?

BROWN: Right. You know, there's research that shows the student debt load is a drag on Black folks and, therefore, increases the racial wealth gap, that by forgiving student debt, or at least by forgiving Black student debt, you'd make quite a dent in the racial wealth gap.

DEMBY: So you just named, like, all these ways, these sort of landmines built into our tax policy, like, our...

BROWN: Yeah.

DEMBY: ...Economic system. Is there a way - can we quantify how much that means over generations for Black folks, like, the way that this drag that tax policy exerts on Black people and non-white people more broadly?

BROWN: You know...

DEMBY: Do we know how much that is?

BROWN: The easy answer is no. The easy answer is no. But I could imagine at some point, Gene, some economists having an answer to your question. This is how much - this is the quantification of it. And part of why I wanted to make the book accessible and I wanted - is I wanted other people to pick up the charge, right? So my book focuses on Black and white. I want other people to focus on Hispanic Americans. I want AAPI, Indigenous Americans - there's all kinds of systemic racism that's built into the code where taxpayers of color are disadvantaged, not just Black taxpayers. So I'm excited about the other research that's been done.

DEMBY: It's worth me and Lori jumping back in right here to remind y'all that it was Dorothy's research that led to the study that Daniel Ho and the team at Stanford released in January, the one that we said got all this attention in Washington.

LIZARRAGA: So much so that Senator Ron Wyden, the head of the Senate Finance Committee, put Daniel Werfel, the new head of the IRS, on the clock to get to the bottom of these racial disparities.

(SOUNDBITE OF ARCHIVED RECORDING)

RON WYDEN: This is something the IRS has to address. If you're confirmed, what will you do to uncover the reasons for the racial disparity in audit selection and what we do to correct it?

DANNY WERFEL: Right now, not being at the IRS, I don't yet have a good sense of what the issue is, what the causes are...

WYDEN: Let's do this - will you commit, within 60 days of being confirmed, that you will get back to us and give us the underlying reasons, in your view, why there is this discrimination and what you'll do to correct it within 60 days?

WERFEL: I will absolutely, as soon as I get to the IRS, talk to those individuals that are working this issue and report back to you on what we're finding.

WYDEN: Sixty days.

WERFEL: Understood, Senator.

WYDEN: All right.

DEMBY: Just as we were finishing up this episode, the IRS announced an $80 billion plan to modernize the way that it collects taxes. And part of that plan is meant to find ways to analyze whether the IRS is discriminating in its auditing.

LIZARRAGA: Which sounds vague, like the IRS is making a plan to look for the racial discrimination Daniel Ho and his team already found. But I will say in terms of the larger plan, we are hearing the IRS actually acknowledging racial disparities in a way that we haven't before, which, you know, I guess does give me some hope that some of these disparities will actually begin to be addressed. And it's all kind of wild that Dorothy was responsible for lighting the match that started all of this.

DEMBY: Right? Like, she went into law specifically to stay away from race. That's why she went into tax law. And now race and taxes - that's kind of her legacy.

BROWN: So, you know, every April 15, the tax code, which disadvantages Black taxpayers while advantaging white taxpayers, increases the racial wealth gap. So we could solve the racial wealth gap tomorrow, but it would be started again next April 15. So we cannot solve the racial wealth gap without making sure it's not perpetuated by our tax policies. And people tend not to draw the connection between those two. It's the silent wealth killer for Black families. We need to make this a core component of every tax policy conversation we ever listen to.

DEMBY: The feeling I'm left with - and again, I feel this way after so many of our episodes - is I'm both glad we know this now and also low-key distraught. Dorothy said knowing how the tax code affects you can help mitigate some of the damage. When we do our own taxes, we should file them and organize our finances defensively and strategically.

LIZARRAGA: And that might offset some of this on the margins, but it's not a big policy fix, Gene, and it can't make up for all these years of Black folks having more of their earnings taken from them.

DEMBY: But now because of people like Dorothy Brown and Daniel Ho and the folks at Stanford, we know that there are booby traps out there lying in wait.

LIZARRAGA: Yeah.

DEMBY: So happy tax day, y'all.

(SONDBITE OF MUSIC)

DEMBY: All right, y'all. That's our show. We want to hear from you. Our email address is codeswitch@npr.org. Follow us on Instagram at @nprcodeswitch.

LIZARRAGA: This episode was produced by James Sneed with help from Olivia Chilkoti. It was edited by Courtney Stein and Dalia Mortada and engineered by James Willetts.

DEMBY: And we would be remiss if we did not shout out the rest of the CODE SWITCH massive, B.A. Parker, Veralyn Williams, Leah Donnella, Kumari Devarajan, Karen Grigsby Bates, Diba Mohtasham, Christina Cala, Alyssa Jeong Perry, Jess Kung and Steve Drummond. Our art director is LA Johnson. And we want to give a big shoutout to Diba Mohtasham and Olivia Chilkoti. Diba has been a producer on our team for about a year now, and she is moving on to the next big adventure. And Olivia Chilkoti has been our intern, and she's onto the next thing.

LIZARRAGA: It's both their last week on the show. We will miss them. Good luck, ladies. We have enjoyed working with both of you so much. And just want to give a quick shoutout to our CODE SWITCH+ listeners. We appreciate you, and thanks for being a subscriber. Subscribing to CODE SWITCH+ means getting to listen to all of our episodes without any sponsor breaks, and it also helps support our show. So if you love our work, please consider signing up at plus.npr.org/codeswitch.

DEMBY: I'm Gene Demby.

LIZARRAGA: I'm Lori Lizarraga.

DEMBY: Be easy, y'all.

 

 

 


Friday, March 31, 2023

Don't Even Try to Play Chess with Disney ~

Once Again,  the Mouse Outmaneuvers Man

 There's so much swirling in my head today....I mean it's hard to pick which channel to watch in the soap opera our world affairs have  become. Let's go global first.

Wanna-be Despots are having a really bad week.

Putin must be mad....his arrogance, violent antics are not even of interest anymore. And with his loosing military actions, he must be growing a significant internal disorder that will assist humanity,  in relieving us of his type of thinking.

Then there's Netanyahu. Give thanks for right thinking Israelis, beginning to come out of the hypnotism of decades of miss-placed fear and ignorant thinking about an Israeli state. Yeah, now you see. It's not the Palestinians that you should be most fearful of, but the thinking within your own culture and leaders. So a Shout-Out to everyone in the streets. Because if we start, with making sure the Judiciary segment of society is free and allowed to function in a wholesome, way, let's hope that that thinking will expand. 

Let's affirm, that this starts a process where  all the people of Israel at home and abroad, realize that it is right to extend full liberty,  justice, participation and freedom, not just to the Israeli judiciary arm, but to all the humanity that dwell on that particular part of our  globe ~ To ensure that all those on that land, living in harmony, before Britain and Europe illegally GAVE land to Zionists, to be rid of them in Europe,....and before greed and hatred infected the minds of Jews that  came to the region~ begin a new fresh experience, that is an inspiration to the global community, and not a disgusting unsustainable testament to the worst qualities in human nature.

And finally...oh yes! The French are sticking it to little Macron. I love it. Thinking he has nothing to loose, because his term as President has run out, thinking he can impose change without any respect for other's thoughts, wishes and desires....Goodness!!! 

That we live in a time when "leaders so misunderstand their role"! Didn't nobody elect you to think for us! You are an instrument of OUR DESIRES. You are to bring into effect what we call upon you to make manifest. Humanity does not need you leaders to tell us and worse, to impose upon us, your wishes and limited, ignorant, and deluded  thinking. Goodness! 

Are you listening DeSantis??? Cause we see this erroneous interpretation of what an elected "leader" is, being acted out on local, state, and national stages.And it doesn't stop there, as we see heads of religious groups battling it out on the local and  a global scale, spilling into politics and governance, ~ declaring their interpretation to be the only one to be adhered to, and followed.

How did we come to this? I thought that that was what democracy and the American Revolution was all about ~ the throwing off a concept of autocracy  in the form of monarchy  and a rich ruling class being all powerful ,~ and committing this nation to ideals of  "liberty, equality, national, religious and civil rights,  and responsible citizenship".

And that brings me to the title of this post....Hopefully, you're aware of DeSantis' childish reaction to the Disney corporation's position on his legislation that is absolutely disrespectful, harmful and unconstitutional, as it relates to segments of the population. Yes I say unconstitutional, because I'm sure at some point in the future...all this type of legislation will be banned and repealed, because if infringes on so many aspects of a human rights.

But much as I hate that corporations now have greater rights than individual citizens, I love their move when it came to DeSantis' trying to harm them, and basically control actions and affairs at the Florida Disney Park.  They made a chess move that was so sweet, that DeSantis and his small-minded cronies and attorneys, didn't even know what hit them.

Checkmate!

lovu

Kendke 

In Their Game of Chess, Disney Just Said Checkmate

photos via Instagram, @rondesantisfl

Ron DeSantis is not a happy camper today. The homophobic Governor of Florida has made it his mission to erase any and all mentions of anything gay in public schools as he wages a fake culture war. Gearing up for a supposed Presidential run the 44-year-old politician proudly declares Florida “woke-free.” The schoolyard bully has sparred with everyone from drag queens to Mickey Mouse these past months.

Well, he is finding out that neither Disney nor the drag queens are sitting back and taking his ridiculous shit. The overzealous former attorney might be completely in shock today as Mickey Mouse and his crew not only clapped back but clapped back harder and louder rendering DeSantis’ hand-picked five-member board completely useless. BOOYAH!


This useless war started when Disney began publicly opposing the infamous Don’t Say Gay bill the wannabe fascist signed into law. According to CBS News,

“In taking on Disney, DeSantis furthered his reputation as a culture warrior willing to battle perceived political enemies and wield the power of state government to accomplish political goals, a strategy that is expected to continue ahead of his potential White House run. The new supervisors replaced a board that had been controlled by Disney during the previous 55 years that the government operated as the Reedy Creek Improvement District. The new board members held their first meeting earlier this month and said they found out about the agreement after their appointments.”


Local ABC News affiliate WFTV notes, “Particular focus was paid to one section that board members said places certain restrictions on the district until 21 years after the death of the last surviving descendant of King Charles, or until Disney abandons the resort.” Finally, a reason for Americans to be interested in the monarchy!

Is there a more fragile ego than that of the straight, white, male Republican? Disney beat the Harvard Law School graduate at his own sketchy, shady game. Could he have seen this coming? Just last week Disney announced they will host the largest LGBTQ conference promoting queer rights in the workplace this September. Disney has been in Florida decades before DeSantis and they will be there long after he is gone.

THIS IS OUR HOUSE said every Disney princess to the GOP hellbent on destruction.

One of the appointed board members vows to fight back and regain control. Brian Aungst said, “We’re going to have to deal with it and correct it. It’s a subversion of the will of the voters and the Legislature and the governor. It completely circumvents the authority of this board to govern.” Good luck with that.

Disney is stepping up, and going above and beyond for our community and for all Americans. DeSantis leads with hate and fear. On the opposite end of the spectrum is Disney — the happiest place on Earth. We need to choose happiness over hate and fear. Always.


 

 

Do I think it’s a good thing that Disney is demonstrably more powerful than the Governor of the 3rd largest state? No.

 

 

Monday, March 27, 2023

Perspective: Two ~ Actually Three Views of the Great Thelonious Monk

 

 Thelonious Monk, Paris 1969
 
 In observing phenomena, an important factor, is the perspective of the observer.Throughout time, from anthropology, history and cultural studies, people have made assumptions, statements, comments and even edicts about what they observe. And the public generally takes those as facts. 
 
What we all forget, is that whatever we are looking at, how we interpret it, name it, and react to it, is based on what is the consciousness, the quality of the body of accumulated thought that the individual observer, is looking 'with'. In other words, if one is looking with a biased, jaded or negative mindset, whatever they see, must go through that veil of perception. So the free-er one is of previously held 'facts' and perceived ideas, ~ the more neutral, open and objective one can be ~ the greater the chance that a truer understanding can be reaped.

I started this post, just to share the New Yorker article on the film that's been released and that's now touring the nation in art house theaters. The article mentioned history scholar/activist Robin D. G. Kelley's highly reviewed autobiography of Monk. The book is on my list of future purchases and as Kelley is a thinker I really value, I searched and found a review of the book. Reading the 2009 review, I was struck how the review made serious mention of the very issue that this film was created to illuminate about Monk's personna.
 
So this post just grew, and became organically expanded to include these thoughts of my own, and the way my Dear Mind ties it all together. For what I definitely got out of this experience is the all important quality of perspective.
 
It was at a service at Agape International Spiritual Center, where I first heard Rev. Michael say, "It's not what you're looking at~It's what you're looking with." And I've loved that concept ever since. Because it's so true. If you're looking with love, an open mind and pure interest, your faculties have a greater chance of seeing things more fully. Whereas if skepticism, fear, doubt and anxiety are heavily entrenched in one's psyche, one's inner mechanism, then whatever you're observing or experiencing,  is filtered through those emotions first, before one can make make an assessment, or even develop an understanding....

Oh the wonderful ways Life reminds us of what we need to be mindful of ......and I thought this was just about a chance to share the genius of the great composer and musician Thelonious Monk....!
 
The film will be showing in Los Angeles, 2 days the first week of April, 2023. 
4/06/23
Los Angeles, CA 
 
4/07/23 
Beverly Hills, C

In the winter of 1969, at fifty-two years old and after decades of revolutionizing the way we hear notes and silence, the jazz pianist and composer Thelonious Monk was invited to record a conversation and solo session for French television. As the outtakes of the program reveal, the occasion quickly devolved into a probe of Monk’s carefully protected private life. 

By this point in his career, it was commonplace to portray Monk as stylistically bizarre. He and his music were often presented as conjoined elements in a broken or stilted grammar of near-madness, as though strangeness were his currency. The TV program, aired in 1970 as “Jazz Portrait: Thelonious Monk,” was no different. The interview at the center was conducted by Henri Renaud, a French jazz pianist, whose evident idolization and envy of Monk distorts any effort at an honest conversation. Both the final version and the additional footage that was left out stand as a testament to the media’s effort to capitalize on Monk’s perceived oddities by fashioning him into a jester for his rapacious public.

Rewind & Play: ‘It’s Not Nice?’,” a new documentary about Monk by the French Senegalese director Alain Gomis, remixes the original raw footage into a devastating ballad of the artist’s erasure. At the beginning of the film Monk deplanes in Paris. From the opening frames, we witness the gleam in his eye and the rhythm of his gait. As a muse, he is ideal—captivating to observe and aware of his effect on others. A bewildered half smile leaves and returns to his face in intervals, like a refrain. It’s especially sincere at the arrivals gate, and it widens when his wife, Nellie, who has accompanied him from New York, comes into frame. She sports a low Afro, a sleek black coat, and gold-rimmed sunglasses whose chic gaudiness contrasts with her modest demeanor. If Monk is our muse, she is his.

From the outset, it is clear that the unspoken, like the dropped notes in Monk’s music, is the defining characteristic of his approach to private life. When he’s not looking at Nellie, whose presence makes his hierarchy of feelings immediately apparent, it’s difficult to determine the ratio of pleasure to angst in his movements. Film crew in tow, the couple arrive at their hotel. Monk heads to a bar, still armored in his regal half-hearted cheerfulness but on the brink of his alternate register, a discreetly exasperated-ecstatic one. A bystander, not wanting to be documented, remarks in French, “Oh, it’s a hidden camera . . . we mustn’t talk.” Monk has a drink and a hard-boiled egg, never putting down his cigarette. He turns around to pet a dog that someone has brought to the bar, and, as the light brightens, the bloodshot cast of travel and exhaustion is visible in his eyes.

Monk’s dominant energy at this point in the film is a jovial melancholy. In the recent past, his peer John Coltrane and his friends Bud Powell and Elmo Hope had all died, and Monk himself had spent more than twenty gruelling years of touring, playing, living, and composing within the unforgiving confines of an industry that preyed upon its talent. As Robin D. G. Kelley writes in his biography of the jazz legend, Monk had quite literally walked off his pain, sometimes walking so much that he got sores on his feet. Following the death of his idol Coleman Hawkins, Monk was said to have paced for three days. The cameras capture the wry decorum of a man too generous to pursue escapism wholeheartedly and too intelligent to relish sycophants trampling on his soulfulness in pursuit of his glamour. A few scenes in, we get Monk at the piano rehearsing a haunted melody while bystanders perch around the instrument and smoke. Renaud instructs, “Make it look like it’s live . . . That’s the modern way.”

The plaintive self-consciousness of this request makes Monk seem like an ancient sage surrounded by fractious acolytes. The film crew stare him down as he plays, as if his genius were a transgression and they are a tribunal. His chords become more sombre, indicating his awareness of their scrutiny. It’s a visually wrenching exchange between performance and spectatorship. Eventually, Monk wearies and leaps up from the bench abruptly, ceremoniously.

In another scene, he sits down and submits to the interview portion of the program. “Do it your way,” he says, in restrained frustration. Among the melodies Monk plays is “Crepuscule with Nellie,” a song he wrote for his wife, and Renaud opens the interview by asking about her. All the romance that Monk conjured with his composition is held up for investigation. His bewildered grin returns and turns into something more detached. Renaud repeats the question.“All I can say is that she’s my wife and the mother of my kids,” Monk offers guardedly. The film crew prod him for another take. He repeats the same simple pronouncement. Do they want him to reiterate the passion that he confessed to with his playing?

Renaud persists, changing the subject to feign mercy. Why does Monk keep his piano in his kitchen, he asks, seemingly anticipating an outlandish pop-spiritual explanation about the energy of the room, a neat anecdote that can be added to jazz mythology. Monk responds matter-of-factly: “That was the largest room in the apartment.” Renaud appears crestfallen. In French, he had added that he’s been to Monk’s “cramped” New York apartment, and inflects the adjective with blunt pathos. Monk’s eyes are starting to spin and rove, not in anger so much as the palpable disappointment of one who has been tricked and cornered by forces he almost trusted.

Gomis does a startlingly precise job of imposing a Chaplinesque burlesque on the breakdown in communication between Monk and Renaud. There’s a muscle to the exchange between shots, takes, and pauses that is reminiscent of real sparring in a ring. Sweat gathers on Monk’s brow, its presence made more overwhelming by the invasive lighting. His eyes narrow into deeper alertness and take on a saddened cast, as the subtle attempts to undermine him accumulate. Tense silences stand in for the bells between rounds.

Relentless, Renaud reroutes to another, equally risible line of inquiry. He wants to know if Monk feels that he was “too avant-garde” for the audience at his first concert in France, in 1954. Now Monk is openly indignant: “It seemed like that I was the star the people was coming to see, but I wasn’t getting the money.” Cut! This scene is the source of the film’s subtitle. Having led Monk to acknowledge his own stature, Renaud halts. “It’s not nice,” he eventually reprimands Monk condescendingly, all of his submerged arrogance and entitlement finally on display.

On the second take, Monk’s recall is more detailed and more resentful. He reiterates the sentiment that he was being exploited, and it seems clear that he’s aware that he is again being exploited in a similar way. “Bernard, I think it’s best if we erase it. What he’s saying is really derogatory,” Renaud interjects in French, a language Monk cannot fully understand. Monk is now smiling with an air of sublimated rage and disbelief, still and statuesque as a tintype. Imagine being berated and told that it’s an honor.

Monk stands up and attempts to walk offstage. “How about us going to this dinner and forgetting this TV program?” he stammers, pained, painful to watch. Renaud physically jostles him back toward the bench. For a moment, their clash is a near-embrace, one that stalemates in Monk’s tentative acquiescence. He’s still standing for his third attempt at the question about his first tour in France. This round, he plays the changes: “The first time I came to France, I was ossified all the time I was here.” Finally, a threat—this retort proves he knows that he’s being asked to stiffen into the same thankless showmanship all over again. He lights a cigarette, his face now assuming an expression of resigned contempt. He recounts his modest beginnings for a few bars, while Renaud maintains a smug distance. Then, with an emphatic “Merci beaucoup!,” Monk liberates himself from the exchange.

“I should care, I should let it upset me” are the lyrics to the song that Monk solos in the next scene. As the television crew orbit the piano, he slurs the standard’s notes, some giggling and the bulk sobbing quietly. While playing, he walks into his own shadow, grinning. Monk’s dignity and agency are apparent in his walk, and he plays like he walks, in round and dreamy notes with a destination clear only to him. These are the brilliant circles for which he named his compositions, and they are aspects of his nature that arouse rapture from anyone with eyes and ears. Asking him to dissect his process on a technical level is tantamount to an act of hostility.

Everything he has to testify he has volunteered as song and gesture, spinning circles again and again for us, until we might comprehend the pattern between notes that only he can access and that only he can elaborate into work of understated and jarring beauty. The soft pink hue of aged videotape appears over Monk’s image, like the flag of a new nation under jazz. Beads of his sweat fall on ivory keys, and his fingers move with even greater agility. More perspiration falls, and the room goes silent.

Cameramen and journalists often make the mistake of thinking that they can package an artist into an icon, bestowing upon their subject an image that might be converted into money or fame. Biographers and documentarians make this mistake, too. The elegance of “Rewind & Play” lies in its effort to back away from this territory of error and subjection, and in doing so to dim the obnoxious, prideful lights of the tradition of star-making. The film closes with a montage of Monk’s silent gestures, which exhibit a tenderness and deliberateness so arresting that you almost forget you’ve just watched him provoked into a muted war with the idea of himself. We hope that Monk himself was able to forget that subtly riveting trauma, but it’s doubtful. What we witness in “Rewind & Play” is likely one of the incidents that instigated Monk’s withdrawal from public life, seven years after “Jazz Portrait” was filmed. When, during that retreat, the producer Orrin Keepnews called him to ask if he would like to talk about “the old days” Monk’s succinct response was “No, I wouldn’t.”

Many years later, in 1986, the pianist Cecil Taylor was filmed watching a Monk concert on video. He gasps in appreciation and smiles like a giddy child: “He has on wonderful shoes, he has on wonderful shoes!” I think Cecil has it right. His outrageous praise lets him meet Monk on his own terms, in a sense of rhythm and style so exclusive that even its withholding character is a display of care and sympathy toward admirers. Monk, his music, and his silence epitomize an adage attributed to Louis Armstrong—if you have to ask what it is, you’ll never know. 

And Beloveds, I highly recommend you read Robin D. G. Kelley's autobiography of Monk. Here's a review from the New York Times. 

lovu dearly,

Kendke

Monk’s Moods

Thelonious Monk, the great American jazz artist, during the first half of his jun­ior year at Stuyvesant High School in New York, showed up in class only 16 out of 92 days and received zeros in every one of his subjects. His mother, Barbara Monk, would not have been pleased. She had brought her three children to New York from North Carolina, effectively leaving behind her husband, who suffered bad health, and raising the family on her own, in order that they might receive a proper education. But Mrs. Monk, like a succession of canny, tough-minded, loving and very indulgent women in Thelonious Monk’s life, understood that her middle child had a large gift and was put on this earth to play piano. Presently, her son was off on a two-year musical tour of the United States, playing a kind of sanctified R & B piano in the employ, with the rest of his small band, of a traveling woman evangelist.

The brilliant pianist Mary Lou Williams, seven years Monk’s senior and working at the time for Andy Kirk’s Clouds of Joy orchestra, heard Monk play at a late-night jam session in Kansas City in 1935. Monk, born in 1917, would have been 18 or so at the time. When not playing to the faithful, he sought out the musical action in centers like Kansas City. Williams would later claim that even as a teenager, Monk ­“really used to blow on piano. . . . He was one of the original modernists all right, playing pretty much the same harmonies then that he’s playing now.”

Thelonious Monk
Credit...Illustration by Joe Ciardiello

It was those harmonies — with their radical, often dissonant chord voicings, along with the complex rhythms, “misplaced” accents, startling shifts in dynamics, hesitations and silences — that, even in embryonic form, Williams was hearing for the first time. It’s an angular, splintered sound, percussive in attack and asymmetrical, music that always manages to swing hard and respect the melody. Monk was big on melody. Thelonious Monk’s body of work, as composer and player (the jazz critic Whitney Balliett called Monk’s compositions “frozen . . . improvisations” and his improvisations “molten . . . compositions”), sits as comfortably beside Bartok’s Hungarian folk-influenced compositions for solo piano as it does beside the music of jazz giants like James P. Johnson, Teddy Wilson and Duke Ellington, some of the more obvious influences on Monk. It’s unclear how much of Bartok he listened to. Monk did know well and play Rach­maninoff, Liszt and Chopin (especially Chopin). Stravinsky was also a favorite.

Robin D. G. Kelley, in his extraordinary and heroically detailed new biography, “Thelonious Monk,” makes a large point time and time again that Monk was no primitive, as so many have characterized him. At the age of 11, he was taught by Simon Wolf, an Austrian émigré who had studied under the concertmaster for the New York Philharmonic. Wolf told the parent of another student, after not too many sessions with young Thelonious: “I don’t think there will be anything I can teach him. He will go beyond me very soon.” But the direction the boy would go in, after two years of classical lessons, was jazz.

Monk was well enough known and appreciated in his lifetime to have appeared on the cover of the Feb. 28, 1964, issue of Time magazine. He was 46 at the time, and after many years of neglect and scuffling had become one of the principal faces and sounds of contemporary jazz. The Time article, by Barry Farrell, is, given the vintage and target audience, well done, both positive and fair, and accurate in the main. But it does make much of its subject’s eccentricities, and refers to Monk’s considerable and erratic drug and alcohol use. This last would have raised eyebrows in the white middle-class America of that era.

Thelonious Monk at the Newport Jazz Festival in 1963.

Credit...Associated Press

Throughout the book, Kelley plays down Monk’s “weirdness,” or at least contextualizes it. But Monk did little to discourage the popular view of him as odd. Always a sharp dresser and stickler for just the right look, he also favored a wide array of unconventional headgear: astrakhan, Japa­nese skullcap, Stetson, tam-o’-shanter. He had a trickster sense of humor, in life and in music, and he loved keeping people off-balance in both realms. Off-balance was the plane on which Monk existed. He also liked to dance during group perform­ances, but this served very real functions: first, as a method of conducting, communicating musical instructions to the band members; and second, to let them know that he dug their playing when they were in a groove and swinging.

Even early in his career, Monk often insisted on showing up late to gigs, driving bandleaders, club owners and audiences to distraction. And on occasion he would simply fall asleep at the piano. He would also disappear to his room in the family apartment for two weeks at a time. When he was young, these behaviors or idiosyncrasies were tolerated and, more or less, manageable. But the manic, erratic behavior turned out to be the precursor of a more serious bipolar illness that would over time become immobilizing. From his father, Thelonious Sr., who was gone from the scene by the time Monk was 11, Thelonious Jr. seems to have gotten his musical gene (there always seems to be one in there). But he also inherited his father’s illness. Monk Sr. was committed to the State Hospital for the Colored Insane in Goldsboro, N.C., at the age of 52, in 1941. He never left.

Kelley, the author of “Race Rebels” and other books, makes use of the “carpet bombing” method in this biography. It is not pretty, or terribly selective, but it is thorough and hugely effective. He knows music, especially Monk’s music, and his descriptions of assorted studio and live dates, along with what Monk is up to musically throughout, are handled expertly. The familiar episodes of Monk’s career are all well covered: the years as house pianist at Minton’s after-hours club in Harlem, which served as an incubator for the new “modern music,” later to be called bebop; the brilliant “Genius of Modern Music” sessions for Blue Note, Monk’s first recordings with him as the bandleader; the drug bust, where Monk took the rap for Bud Powell and lost his New York cabaret license for six years; his triumphant return in 1957 with his quartet, featuring John Coltrane, at the Five Spot; the ter­rible beating Monk took for resisting arrest in New Castle, Del.; the final dissolution and breakdown. Likewise, the characters in Monk’s life and career are well served: his fellow musicians; his family; his friend and benefactor, the fascinating Pannonica (Nica) de Koenigswarter, the “jazz baroness,” at whose home in Weehawken, N.J., Monk spent his final years. He would die, after a long silence, in 1982, in the arms of his wife, Nellie.

Musicians — particularly jazz musicians of Monk’s period, and most especially Monk, taciturn and gnomic in utterance by nature — tend not, as writers do, to write hundreds of letters sharing with intimates what is going on in their hearts or heads. A biography of Monk, perforce, has to rely on the not always reliable, often conflicting, memories of others. Instinct is involved, surely as much as perspicacity, in sifting through the mass of observation and anecdote. The Monk family appears to have shared private material with Kelley that had hitherto been unavailable. This trust was not misplaced. There will be shapelier and more elegantly written biographies to come — Monk, the man and the music, is an endlessly fascinating subject — but I doubt there will be a biography anytime soon that is as textured, thorough and knowing as Kelley’s. The “genius of modern music” has gotten the passionate, and compassionate, advocate he deserves.

THELONIOUS MONK -The Life and Times of an American Original 

By Robin D. G. Kelley 

Illustrated. 588 pp. Free Press   

$14.89 on Amazon although if possible order/buy it from a Black owned book store.

 

Wednesday, February 1, 2023

A History of the Current Debt Level of America - Easily explained

Republicans aren’t going to tell Americans the real cause of our $31.4tn debt

Robert Reich

The rich used to pay taxes. Now they loan money to the US government – at a profit that everyone else pays for

‘When Republicans are in power, they rack up giant deficits, mainly by cutting taxes on corporations and the wealthy. Then when Democrats take the reins, Republicans blame them for being spendthrifts.’
When Republicans are in power, they rack up giant deficits, mainly by cutting taxes on corporations and the wealthy. Then when Democrats take the reins, Republicans blame them for being spendthrifts.’
Photograph: Mandel Ngan/AFP/Getty Images

The dire warnings of fiscal hawks are once again darkening the skies of official Washington.

They’re demanding that the $31.4tn federal debt be reduced and government spending curtailed – thereby giving cover to Republican efforts to hold America hostage by refusing to raise the debt ceiling.

It’s always the same when Republicans take over a chamber of Congress or the presidency. Horrors! The debt is out of control! Federal spending must be cut!

When they’re in power, they rack up giant deficits, mainly by cutting taxes on corporations and the wealthy (which amount to the same thing, since wealthy investors are the major beneficiaries of corporate tax cuts).

Then when Democrats take the reins, Republicans blame them for being spendthrifts.

Not only is the Republican story false, but it leaves out the bigger and more important story behind today’s federal debt: the switch by America’s wealthy over the last half century from paying taxes to the government to lending the government money.

This backstory needs to be told if Americans are to understand what’s really happened and what needs to be done about it. Republicans won’t tell it, so Democrats (starting with Joe Biden) must.

A half century ago, American’s wealthy helped finance the federal government mainly through their tax payments.

Tax rates on the wealthy were high. Under Republican president Dwight Eisenhower, they were over 90%. Even after all tax deductions, the wealthy typically paid half of their incomes in taxes.

Since then – courtesy of tax cuts under Ronald Reagan, George W Bush, and Donald Trump – the effective tax rate on wealthy Americans has plummeted.

Not only has their income tax rate dropped but other taxes that hit them hardest, such as the corporate tax, have also declined.

Even as the rich have accumulated unprecedented wealth, they are now paying a lower tax rate than middle-class Americans.

Trump’s 2017 tax cut – largely a handout to the rich – helped push the tax rate on the 400 wealthiest households below the rates for almost everyone else.

By 2018, the 400 wealthiest American households paid a lower total tax rate – including federal, state, and local taxes – than any other income group. Their overall tax rate was only 23%. It had been 70% in 1950.

Middle-class and poor families didn’t benefit from the drop in income and corporate taxes. They now pay more in payroll taxes (which finance Medicare and Social Security) than previously, so their overall taxes have remained fairly flat.

One of the biggest reasons the federal debt has exploded is that tax cuts on corporations and wealthier Americans have reduced government revenue.

In the first full year of the Trump tax cut, the federal budget deficit increased by $113bn while corporate tax receipts fell by about $90bn, which would account for nearly 80% of the deficit increase.

Meanwhile, America’s wealthy have been financing America’s exploding debt by lending the federal government money, for which the government pays them interest.

As the federal debt continues to mount, these interest payments are ballooning – hitting a record $475bn in the last fiscal next year (which ran through September). The Congressional Budget Office predicts that interest payments on the federal debt will reach 3.3% of the GDP by 2032 and 7.2% by 2052.

The biggest recipients of these interest payments? Not foreigners but wealthy Americans who park their savings in treasury bonds held by mutual funds, hedge funds, pension funds, banks, insurance companies, personal trusts and estates.

Hence the giant half-century switch: the wealthy used to pay higher taxes to the government. Now the government pays the wealthy interest on their loans to finance a swelling debt that’s been caused largely by lower taxes on the wealthy.

This means that a growing portion of everyone else’s taxes are going to wealthy Americans in the form of interest payments, rather than paying for government services that everyone needs.

So, the real problem isn’t America’s growing federal budget deficit. It’s the decline in tax revenue from America’s wealthy combined with growing interest payments to them.

Both are worsening America’s already staggering inequalities of income and wealth.

What should be done? Isn’t it obvious? Raise taxes on the wealthy.

  • Robert Reich, a former US Secretary of Labor, is professor of public policy at the University of California at Berkeley

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