Saturday, September 15, 2007

A Tax Increase Is Not The Answer To Fighting Poverty by Akindele Akinyemi

African Americans are the only modern race of people in this country that created a political powerbase, before we created an economic powerbase. Think about it. No other race of people in America has taken this route, except for Blacks and to some degree, the Irish. The Irish plan has not worked out much better than ours has on the whole, but they had a few things going for them that Black America did not. Amongst them, they were not an enslaved people, legally prohibited from the basics, such as education, which in the 21st Century is, and will continue to be, the ultimate poverty eradication tool in America. Even our Latino brothers and sisters have gotten off on the right foot here. Say what you will about illegal immigration, Hispanic legal and illegal immigrants alike have learned something important about America, and quickly – you are nothing if not an owner or producer in this country.

I have been saying all along that missing this critical step of economic empowerment, ownership and the power of individual property rights early in our developmental process as a people in America, we wholeheartedly embraced the first true mainstream power that seemed to emerge from the fruits of the civil rights movement – political power. How wonderful. But political power without the underpinning of economic empowerment is a car without an engine.

Public policy in Michigan is principally designed around Michigan’s first priority; economics and ownership. Individual property rights. Think about it – from tax breaks and other protections for homeowners, to incentives for the working class, to incentives for small businesses and major corporations alike.. it’s all about owners and producers.

How many of us living in Detroit or other areas in Urban Michigan really care about a tax break unless you have a job? Do you really care about a bond issuance for infrastructure repairs or investment in your local community, unless you own a home or business? Frankly, those who are not owners or tax payers may not even know what others are talking about. It’s a foreign language to those who are not owners or producers. And so, as a result we have effectively tied one hand behind the collective back of our political leadership; forcing them to pursue a doomed public policy strategy not of proactively protecting, enhancing and growing our own individual property rights, but rather a reactive, defensive “strategy” of trying to protect and preserve an ever decreasing pool of mostly entitlements and public subsidies.

In the One Network we believe that the emergence of a true Black stakeholder class in Urban Michigan we will no longer see homeowners as Black, White or brown, but green. We will see our urban, inner city communities not as wastelands, but emerging markets in Michigan, vastly under-served, and the last bastion of lost capitalism. A place of future riches.

We cannot bring this into fruition if we are always trying to raise taxes here in Michigan. Strangely, no side, Democrat or Republican, has come to an conclusion on how to solve the state's budget crisis. Both sides are blaming each other.

The Mackinac Center for Public Policy has given some solutions that I think would be a good alternative. I have listed a few below.

Change the higher education funding mechanism to a standard "per-pupil foundation grant" in which the money is attached to the students, rather than each university getting an amount determined by legislative maneuvering. As colleges were forced to compete for students, they would "sharpen their pencils," rein in costs and eliminate the kinds of inefficiencies highlighted in recent audit reports. If the effect was that costs fell by just 5 percent, the savings would be: $70 million.

Shift state police road patrols to less expensive county sheriff deputies. With benefits and related expenses it costs more than $100,000 per year to employ a state trooper; most sheriff deputies cost much less to employ. Effect on public safety: Zero. Savings: $65 million.

Adopt the Hay Group report recommendations on rationalizing public school health insurance, including requiring co-pays and preferred provider networks. This could save: $422 million.

Eliminate the Michigan State University cooperative extension service and agriculture experiment station to save: $61 million.

The original version of this list recommended halting the so-called "21st Century Jobs Fund" before it borrowed and spent $400 million. It’s too late for that now: All but $33 million was spent before the 2006 election, and taxpayers will be repaying the debt for decades. At the very least, the bleeding can be stanched — $75 million of what is being characterized as a "$1 billion state deficit" is new borrowing for this boondoggle. Skip it and save: $75 million.

According to a Rio Grande Foundation report, if 5 percent of prisoners are placed in privately-managed prisons, the state saves 14 percent on overall prison spending because government-managed prisons have an incentive to "sharpen their pencils." Savings: $192 million.

Eliminate "History and Arts" subsidies, and cut state library subsidies in half: $35 million.

The rest can be found at

Regardless of what the outcomes will be in the next few days (hopefully we will not see any tax increases) if we do not begin to combat financial illiteracy it will kill the hopes and dreams of literally millions of African Americans with the will to make it.

Full financial literacy should practically link itself to viable strategies for true economic empowerment, conversion (converting a check cashing mentality into a bank account mentality, a renters mentality into a homeownership mentality, etc.) and ownership in low-wealth communities.

While Democrats and Republicans battle it out in Lansing over tax increases let it be known if we truly want to eradicate poverty, if we truly want to create social change, if we truly want to make a difference in our community, we cannot do it on a partisan political basis. This may be bad news for some. But if we look at the social movers of our times — Gandhi, King, Cesar Chavez, Mother Teresa — respectfully, none were politicians. They were moral leaders who had the vision and a passion to make a difference.

This of course is not to say that political leadership is not important, but frankly, just the opposite. Not JUST political leadership, and surely more than just partisan political leadership, is needed for our true emergence as a people. Having strong spirit-centered leadership throughout the Black community, starting in our homes and in our individual lives, helps and strengthens our political leadership in Lansing.

So if we want to make a change, we have to do something really difficult. We have to work together; Democrats and Republicans, blacks and whites, conservatives and liberals. We have to find a common ground.

In our Network when we talk about Genesis we teach people to believe in themselves. We do not conduct business with companies, governments, or organizations; we do business with people. Not just any type of business but business that will help transform urban ghettos into Christian communities.

The 20th century was about race and the color line. The 21st century is going to be about class and poverty. According to CNN, half of all Americans are living paycheck to paycheck. This is a 2001 report. By 2004, this figure was 70% living from paycheck to paycheck. There are more poor whites in America than poor anybody else. Do not let anybody tell you anything different.

We have to focus on spiritual wealth, emotional wealth, economic wealth, and especially educational wealth. Education is the ultimate poverty eradication tool. When you know better, you tend to do better!

It is not about making more money; it is about making better decisions with the money you make. You can make three million dollars and still spend five million. It does not matter.

If our elected officials in Lansing understood this simple concept we would not be sitting here talking about raising our taxes and keeping people poor.

The Beginning Path

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