Education - The Road to Wealth

Welcome back to my blog! This post is for the second Action Project of the Humanities class, Equality. In this unit, Hxstory, we continued our conversations from the previous unit about the inequalities of race, gender, and class in society. We focused on reparations for slavery, Critical Race Theory, Brown v. Board of Education, and micro-aggressions that can contribute to racial tensions between groups. For Field Experiences, we spoke with Isabel Strauss, a designer and architect investigating how architecture can be used to create an egalitarian society in her Master's thesis project, Architecture of Reparations. We also met with Anthony Holmes, a survivor of the torture enacted by the Chicago Police Department from 1972-1991. Finally, we traveled to the Weinberg/Newton Gallery and met with Lisa Lindvay, the education director for the gallery For Those Without Choice exhibit. This talk helped us think about how race, gender, and class inequities are impacted by laws and policies which would be a guiding point for the Action Project. This AP asks us to pick an inequity relating to race, gender, or class, that could be addressed 100 years in the future as a news report. For my project, I chose to talk about the wealth gap in America and what factors contribute to making it expand and leave lower-income people without resources. I hope you enjoy watching my video. 

Education - The Road to Wealth, GHS, 2023

Script:

[insert headline]

Good evening from The Independent Source. Tonight’s story acknowledges the 2nd anniversary of the Breakthrough Learning Center’s completion. Since its construction, the high school has provided lower-income students with free education. The Breakthrough Learning Center’s curriculum focuses on giving students the opportunity to learn in ways most comfortable to them with a global perspective. The school draws in students from multiple kinds of backgrounds, especially those from neighborhoods typically underrepresented and underserved. It helps them grow in hopes of following their dreams of colleges, trades, or careers. Thanks to the funding provided by the Balanced Taxation Act, the Breakthrough Learning Center has been very successful.

[insert wealth image]

To understand the Balanced Taxation Act and the origins of the Breakthrough Learning Center, we must look back into history and examine what wealth truly is. So what really is wealth? Well, wealth is the total of an individual’s assets, such as a home, car, or anything else an individual owns that is valuable. That value comes from two things: one, a market for it, and two, the expanding economy. Due to our growing economy, the values of stocks, bonds, properties, and most other assets are built up. Such assets may have a reduced value at times because of occasional recessions but overall, the value of almost all wealth increases.

In 2023, America’s wealth gap was significantly larger than it is today. Lower-income people had a harder time finding their way out of poverty because of the systemic issues of the education system in relation to wealth inequality. People of low income had a harder time saving money that could be used for education. The more money put into a child’s education, the more resources that child has access to and the more opportunities that child has down the line. Wealthier families have far more resources in terms of time and money to better prepare their children to succeed in school and later in life. But for low-income families, the time and money aren’t the same, limiting the education that can be given to children and making it more difficult to find higher-paying jobs in the future that can build up savings for their children.

Wealth was also divided between America’s richest and everyone else. One of the largest issues contributing to wealth inequality was the system of taxation that existed 100 years ago. According to the Washington Post in 2019, [insert graphic] “in 2018, the 400 richest Americans paid a lower overall tax rate than almost anyone else.” [insert image] In June 2021, the nonprofit news organization ProPublica released a report that some of the world’s wealthiest people at the time, such as Elon Musk, Warren Buffet, and Jeff Bezos, paid little to no taxes compared to their wealth. [insert image] They did this by putting most of their income into investments and holding onto them while the stocks grew and grew, increasing their net worth. But they did not have to pay taxes on those gains unless they sold the stocks. And other legal methods, such as reporting losses and philanthropic giving, were used to lower their income taxes.

These methods are not beneficial to those of lower income, however. A person living paycheck to paycheck or choosing between paying for medicine or food does not have the available resources to divert any income into investments. “It’s time for a reckoning. But that is not what is happening; policymakers and wealthy corporations are doubling down on inequality.” From 2018 to 2025, the Tax Cuts and Jobs Act simplified the tax code for corporations and individuals. The intent of the TCJA was for corporations to pay less in taxes so owners could invest more in their employees and their businesses. One of the outcomes was that the corporations would use the extra money to buy back stock to increase the company’s stock value, giving the owners even more money. For individuals, the act lowered the tax rates for everyone, but the wealthiest benefitted the most as they had larger incomes.

[insert ABC News clip]

So what was being done to fight this? Robert Reich, an economist and former Secretary of Labor for the Clinton administration, used his platform, Inequality Media, to provide insight into wealth inequality and other pressing issues at the time. In one post analyzing the racial wealth gap and what should be done to reverse it, Robert provided methods that would help all Americans accumulate wealth and allow families to invest in their futures.

[insert Robert Reich clip 1]

We’ve made a lot of progress in identifying contributors to wealth inequality, but the wealth gap continues to exist and even expand at times. Opportunities for investing money into institutions like education have been ignored. The tax system and acts we have created to work towards decreasing the gap have benefitted the wealthy the most, as intended.

50 years ago, the Balanced Taxation Act was passed to make it so income from capital gains would be treated the same as personal income. The wealthy were using excess money to invest, so when the stocks rose in value and sold, they benefited from not paying as much tax on them. This policy places a commensurate value on capital gains, so the wealthy would be paying the same tax rates as everyone else.

The excess money from the higher capital gains tax was reinvested in lower-income areas. That money is going toward free education, which can help lower-income families save money for themselves and their children’s futures.

2 years ago, the funding collected since then was able to be used toward building the Breakthrough Learning Center. Celebrating the 2nd anniversary of its completion was Brad Smith, a board member of the Breakthrough Learning Center.

[insert testimonial]

“I am proud to be standing in front of you all today, celebrating the anniversary of our wonderful school. We are thankful to share this moment with you. Building a learning community that could provide free education to these kids and generations beyond has meant so much to the rest of the board and me. This all started with the passing of the Balanced Taxation Act. As the government reinvested more and more funds for education into our neighborhood, we decided to help other local schools work towards providing free education. All that time, year by year, we saved up a piece of that to go to this project. Now, the education our children receive pushes them toward brighter futures a bright young mind deserves.”

Brad has been working to create better opportunities for children’s futures for most of his life, making his and the school board’s achievements so impactful. With the help of the city and neighborhood executives, Brad hopes to assist in creating similar schools all over that can reach kids who deserve and do not yet experience the same academic success as children in wealthier areas. Many families benefitting from the savings they have built up have donated portions to the Breakthrough Learning Center in appreciation of the good work being done.

While wealth inequality still affects many to this day, progress has been made in closing that gap. It is the hope of Brad, the Breakthrough Learning Center, and all of us here at The Independent Source, that this change can benefit the lives of the less fortunate and create economic equality in the future.

[insert Robert Reich clip 2]

I hope you enjoyed watching my video. I decided to make a video over a podcast because of the clips I had in mind that could be shown to support my point. Coming up with a world 100 years in the future was difficult to imagine because anything can happen, but we were given the ability to come up with any future possible. I chose to keep America in a similar spot to how it is now where the wealth gap still exists and is large, but there is more effort being done to reduce it. This AP was completed under a lot of stress with the final weeks of the term upon us, but I enjoyed the process of trying to create a world in 2123. If I had more time I would try to make the video better with smoother editing and recording. Overall, I enjoyed working on the AP and listening to my classmate's reports. Thank you for reading, and I hope to see you in the next post.

Sources:

Bischoff, Bill. “Two Years after the Tax Cuts and Jobs Act - Who Are the Winners and the Losers?” MarketWatch, MarketWatch, 28 Feb. 2020, https://www.marketwatch.com/story/two-years-after-the-tax-cuts-and-jobs-act-who-are-the-winners-and-the-losers-2020-02-11.

Bower, Joe. “For the Love of Learning: John Oliver on the Wealth Gap and Inequality.” National Education Policy Center, 14 Aug. 2014, https://nepc.colorado.edu/blog/john-oliver-wealth-gap.

Chen, Grace. “Paupers and Princes: Economic Inequality at Public Schools.” Public School Review, Public School Review, 16 May 2022, https://www.publicschoolreview.com/blog/paupers-and-princes-economic-inequality-at-public-schools.

Dore, Kate. “Many Wealthy Americans Escape Big Income Tax Bills. Here's How They Do It.” CNBC, CNBC, 10 June 2021, https://www.cnbc.com/2021/06/10/how-wealthy-americans-like-bezos-buffett-musk-pay-little-in-income-taxes.html.

Duquette, Robert. “Tax Reform Update: Intent vs. Results so Far.” PICPA, 29 July 2019, https://www.picpa.org/articles/cpa-now-blog/cpa-now/2019/07/29/tax-reform-update-intent-vs-results.

Fernando, Jason. “Capital Gains Tax: What It Is, How It Works, and Current Rates.” Investopedia, Investopedia, 20 Feb. 2023, https://www.investopedia.com/terms/c/capital_gains_tax.asp#toc-understanding-the-capital-gains-tax.

Fontinelle, Amy. “How the TCJA Tax Law Affects Your Personal Finances.” Investopedia, Investopedia, 28 Feb. 2023, https://www.investopedia.com/taxes/how-gop-tax-bill-affects-you/.

Hendricks, Galen, and Seth Hanlon. “The TCJA 2 Years Later: Corporations, Not Workers, Are the Big Winners.” Center for American Progress, 19 Dec. 2022, https://www.americanprogress.org/article/tcja-2-years-later-corporations-not-workers-big-winners/.

“How Wealth Inequality Spiraled Out of Control | Robert Reich.” YouTube, YouTube, 3 Nov. 2021, https://www.youtube.com/watch?v=wOI8RuhW7q0. Accessed 16 Mar. 2023.

“Income Inequality Affects Our Children's Educational Opportunities.” Equitable Growth, 14 May 2019, https://equitablegrowth.org/income-inequality-affects-our-childrens-educational-opportunities/.

Powell, John A. “Six Policies to Reduce Economic Inequality.” Othering & Belonging Institute, 10 Sept. 2014, https://belonging.berkeley.edu/six-policies-reduce-economic-inequality.

Reich, Robert. “Robert Reich (WHY IS THE RACIAL WEALTH GAP WIDENING? AND WHAT SHOULD BE DONE TO REVERSE IT?).” Robertreich.org, 27 Apr. 2016, https://robertreich.org/post/143497867115.

“Tax Cuts and Jobs Act: A Comparison for Businesses.” Internal Revenue Service, https://www.irs.gov/newsroom/tax-cuts-and-jobs-act-a-comparison-for-businesses#:~:text=The%20Tax%20Cuts%20and%20Jobs,the%20changes%20and%20plan%20accordingly.

Thorbecke, Catherine. “How Our Tax Codes Let the Rich Get Richer: 'We Need Better Tax Laws'.” ABC News, ABC News Network, 14 June 2021, https://abcnews.go.com/Business/tax-codes-rich-richer-tax-laws/story?id=78182056.

“What Is the Racial Wealth Gap? | Robert Reich.” YouTube, YouTube, 27 Apr. 2016, https://www.youtube.com/watch?v=OD-_apYzFMQ&list=PLOLArO56vjuoRUru4q9YdbmhB5euqbFzt&index=5. Accessed 16 Mar. 2023.