Our business
elites—the Zuckerbergs, the Gateses, the Schmidts, the Erik Princes and the Daniel Loebs of the world—continually trumpet how terrible public school education has become, how charter schools may save us. They ask for looser regulations in immigration because the United States can't compete with the
talent pool around the world. Why can't we compete? Because, you know, our crap educational system. One of the many reasons our public education system stinks is a lack of real support for the educators responsible for teaching our nation's youth. The other is money.
About that...
A 2011 report by Citizens for Tax Justice (CTJ) showed that corporations pay less than half of their required state taxes, which in addition to K-12 educational funding provide a significant part of pension funding. More recently, the reportThe [sic] Disappearing Corporate Tax Base found that the percentage of corporate profits paid as state income taxes has dropped from 7 percent in 1980 to about 3 percent today.
It may be getting worse. A PayUpNow analysis of 25 of our nation's largest corporations shows a total state tax payment of 2.4%, about a third of the required tax, based on the average maximum state tax rate of 7.3%.
You might say: hey, they're putting their money where their mouths are—they believe in charter schools! Hey, don't yell at me.
Here's a refresher:
It turns out that at the tail end of the Clinton administration in 2000, Congress passed a new kind of tax credit called a New Markets Tax Credit. And what this allows is it gives an enormous federal tax credit to banks and equity funds that invest in community projects in underserved communities, and it’s been used heavily now for the last several years for charter schools. And I focused on Albany, New York, which in New York state is the district with the highest percentage of children in charter schools. Twenty percent of the schoolchildren in Albany are now attending charter schools. And I discovered that quite a few of the charter schools there have been built using these New Markets Tax Credits.
And what happens is, the investors who put up the money to build the charter schools get to basically virtually double their money in seven years through a 39 percent tax credit from the federal government. In addition, this is a tax credit on money that they’re lending, so they’re collecting interest on the loans, as well as getting the 39 percent tax credit. They piggyback the tax credit on other kinds of federal tax credits, like historic preservation or job creation or Brownfields credits. The result is, you can put in $10 million and in seven years double your money.
They steal food off of the trucks and then yell at the people trying to feed our children. They believe in money.