Topic: Y u apolitical kids better start paying attention
Tukuler
multidisciplinary Black Scholar
Member # 19944
posted
... and making plans
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Planet Money The Economy Explained NPR logo Newsletter There Is Growing Segregation In Millennial Wealth
Planet Money
April 27, 2021 6:30 AM ET
Greg Rosalsky
Editor's note: This is an excerpt of Planet Money's newsletter. You can sign up here.
A few years ago, as everyone focused incessantly on millennials' apparent obsession with avocado toast, a team of researchers at the Federal Reserve Bank of St. Louis got to work investigating something much more serious: millennial wealth. They found that the typical millennial household, as of 2016, had only about $28,000 in net worth — putting them 40% behind what previous generations had in wealth at the same age (in inflation-adjusted terms). The data suggested we millennials were becoming a "lost generation," destined to be poorer than the generations that preceded us.
Baby boomers and Gen Xers have faced their fair share of calamities — stagflation, the double-dip recession of the 1980s, disco — but millennials have had it really rough. Millennials who got college degrees exited school deep in debt and entered a job market ravaged by the Great Recession. Millennials who didn't get college degrees found it harder to get a well-paying, blue-collar job, after trade and automation closed avenues that past generations had used to get to the middle class. We saw our child-rearing and first-home-buying years — not to mention our ability to work face-to-face — interrupted by a pandemic. And all the while we've slogged through an economy muddied by growing inequality, stagnation and a fading American dream.
The research team at the St. Louis Fed recently got its hands on some fresher data, which the team crunched to reveal what had happened to millennials in the years since 2016. The team found shockingly different trends within our generation. Some of us have rebounded dramatically in recent years. Others have fallen further behind. Black millennials have had it worst of all: They aren't just falling further and further behind white millennials in building wealth for their families — they're falling further and further behind what previous Black generations amassed in wealth.
.
A millennial crunches the data
Born in 1991, Ana Hernández Kent is considered a young millennial: old enough to have friends who wear skinny jeans but young enough to have friends who spend too much time playing Fortnite and making videos on TikTok. She's a senior researcher at the Institute for Economic Equity at the Federal Reserve Bank of St. Louis, and she has been on the team of researchers at the St. Louis Fed studying trends in millennial wealth. (Note: We spoke with her on April 15, before the Fed's periodic media blackout.)
The data culled by Kent and her fellow researchers comes from the Federal Reserve's Survey of Consumer Finances, which has detailed information on American wealth going back to 1989. The Fed releases the survey every three years. It's based on extensive interviews of thousands of Americans about the minute details of their finances.
When the latest round of data from the survey was released last year, Kent and her colleagues got to work trying to figure out what had happened to millennials, since their previous study suggested millennials could be on their way to "lost generation" status. That study had data only until 2016, and the new survey gave them data up until 2019. The researchers focused on older millennials, who were born in the 1980s (we'll just call them "millennials" from here on out, but note we're not talking about younger millennials, who were born in the 1990s).
This time, the researchers found some surprisingly good news: Many millennials made dramatic progress after 2016. "What we found was pretty substantial: They had made wealth gains of over 80% in just a three-year period," Kent says. By 2019, the typical millennial household had increased its net worth to about $51,000. Millennials are still significantly behind in amassing wealth — about 11%, or about $6,400, behind previous generations — but they're way better off than they were just three years before.
Kent says there are various reasons for this rebound. About half of millennials are invested in stocks, so the recent surges in the stock market helped. Even more important, Kent says, is the effect of millennial homeownership. More than half of millennials now own homes, and home prices surged between 2016 and 2019. Lastly, many millennials made progress in paying off their student loans, which show up in the data as negative wealth. But this generally positive snapshot of the typical millennial masks something troubling: Non-college-educated and Black millennials are still lagging way behind.
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The lost millennials
Kent and her colleagues found that the typical millennial without a college degree has 19% less family wealth than what previous generations without a degree had when they were the same age. Millennials who graduated from college, on the other hand, have just 4% less wealth than their similarly educated equivalents in generations past had. This growing inequality between college and non-college-educated millennials fits into a ginormous amount of other research that shows that today's blue-collar and low-income workers have less upward mobility than they did in previous generations.
Kent singled out a few potential factors for this disturbing disparity between Black and white millennials. First, white millennials are more likely to benefit from having wealthy parents. Their parents have more resources, for example, to help them with down payments on their first house or to help them pay off their student loans.
About 80% of Black millennials with at least a bachelor's degree still have student loan debt, compared with about half of white millennials. White millennials are also more likely to own assets like stocks and homes, which have ballooned in value in recent years. While about two-thirds of white millennials own homes, less than a third of Black millennials own homes.
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posted
Yeah,I've seen various YouTube lectures by the late Amos Wilson saying that Black folks issues are the same but we are blinded by superficial changes and perceived parity with white folks. To accrue wealthy,we need to come together and consciously invest are money into ourselves and foster appropriate group relationship to maintain our existence in this world.
Posts: 1123 | From: New York | Registered: Feb 2016
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Tukuler
multidisciplinary Black Scholar
Member # 19944
posted
quote:Originally posted by Thereal: Yeah,I've seen various YouTube lectures by the late Amos Wilson saying that Black folks issues are the same but we are blinded by superficial changes and perceived parity with white folks. To accrue wealthy,we need to come together and consciously invest are money into ourselves and foster appropriate group relationship to maintain our existence in this world.
To "the Kids" I say
Attain property.
Buy a effin trailer, (you young, you can live it down. Owning one, or its likes, is better than owning heaps of those valueless scraps of paper called rent receipts). Use its equity and sale to buy a small unattached house. And so on till by 45 you own that house you really want. Ambitious? Once you have the house you'll pass down to your inheritors don't stop 'till you own property 'shares' equal to a block. There are offerings where any individual can benefit from the offerer doing the apt maintenance and sharing part of rent proceeds for your help in covering operating expenses.
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Those with say 200-1000 a month not needed to survive. Besides owning propety through REITs and CrowdFunding what tips and stock advisor services do you recommend?
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Consider brickless mortarless online only banks. They'll reward your savings better than the .01% traditionals like to do to you.
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Knowing this same old OP problem, what possible solutions have you (all readers members or lurkers)?
Like TheReal says, group incentive and action is indeed a prime goal How to prepare individuals to work as a checked and balanced group toward the "need to come together and consciously invest are money into ourselves and foster appropriate group relationship to maintain our existence in this world. "
Tukuler
multidisciplinary Black Scholar
Member # 19944
posted
Though home ownership is the cornerstone of generational wealth, even after acquiring property you will still have to struggle against systemic racism in the real estate sector including capital providers.
When purchasing home property tell whoever's getting you the loan that you've been put on hold and been offered outrageous rates. If they honestly answer that racism was the reason stick with them. Otherwise find an agent who lives in the real world and doesn't pretend they're not vampiring you as is the negro code standard they won't expose as they benefit from it to your detriment.
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Black couple’s home was valued $500K higher after they had a White friend pose as the homeowner
February 16, 2021 at 02:00 pm | Money Moves | Francis Akhalbey | Content Manager Francis Akhalbey
Paul and Tenisha Tate Austin said they believe race played a part in their home being initially undervalued -- Screenshot via ABC7
Though the reasons for that, including - redlining, - challenges with securing home loans and - undervaluing Black-owned homes aren’t hidden secrets, efforts to mitigate these setbacks have moved at a snail’s pace.
In California, a Black Bay Area couple shared their story on how their home was undervalued by a White appraiser despite making significant renovations amounting to hundreds of thousands of dollars. They believe race played a part.
Speaking to ABC7, Paul and Tenisha Tate Austin said they purchased their Bay Area home in 2016 after initially struggling to close deals on properties they were interested in due to challenges including being outbid. They said they eventually became homeowners thanks to another Black family that wanted to sell their property off to a Black couple.
The couple said when they moved into the 1960s-built home, they invested heavily in renovations, spending $400,000 in constructing new floors, a deck and a fireplace. They said they also installed new appliances and added 1,000 square feet of space as well as a whole new floor.
When their massively-renovated home was subsequently appraised, however, it was far below their expected valuation. “I read the appraisal, I looked at the number I was like, ‘This is unbelievable’,” Tenisha Austin told the news outlet.
The couple said the appraiser – an older White woman – used coded language including “Marin City is a distinct area” in her appraisal. She valued the couple’s home at $989,000 – $100,000 more than its previous estimate before their $400,000 renovation, ABC7 reported. The Austins said they believe race played a part in the White appraiser’s estimation of their home.
Racial discrimination in the housing system in the United States continues to persist, with Black Americans usually struggling to secure home loans compared to their fellow Whites, The New York Times reported in 2020. The former are also subjected to redlining, where they are denied mortgages in some neighborhoods. This practice further devalues homes in Black neighborhoods. Black homeowners also reportedly claim their properties are usually appraised far less than that of their neighbors in mixed-race and predominantly White neighborhoods.
“We still see Black people as risky,” Perry said. “White appraisers carry the same attitudes and beliefs of white America — the same attitudes that compelled Derek Chauvin to kneel casually on the neck of George Floyd are shared by other professionals in other fields. How does that choking out of America look in the appraisal industry? Through very low appraisals.”
A report by Redfin also revealed only 44% of Black Americans managed to own homes in 2020 as compared to 74% of White Americans. President Joe Biden has proposed financial reforms to make it less cumbersome for Black Americans to purchase homes.
<< The Joe Biden who just denied America is racist is gonna fix racism? Hah! - YYT al~T >>
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An interracial couple’s home was appraised 40% higher after they removed photos of Black relatives
Remember and don't be a cowardly fool willingly gypped by your avowed enemy. Ask how agent, lawyer, etc., will circumvent the Negro Code for you. Their response is all you need to decide if you will give them your money.
posted
^That same thing happened to my house. Spent 25% of the homes worth into improvements. My appraisal was 5% higher than the previous appraisal that was performed after extensive water damage while the entire floor was ripped up and a foot of drywall was removed on every wall on the first floor.
My appraiser was a black woman who didnt seem at all impressed with my 5 figure wood floors. Meanwhile every other person i invited in uttered an expletive upon seeing them.
It was at that point I decided remove any doubt of a long term future in America. After 17 years of owning a home in a "Black city" its value has NOT risen faster than inflation. BUT....its better than renting.
Invest, put 1-3% of your net worth into risky things like Crypto and NFT. Save slow. Take that 300 child credit for each child and put some in a 529 and a custodial trading account for your kids.
My suggested markets: Emerging markets / China / Blockchain / Water and natural resources
Collectively we swirling around the toilet bowls. Some individuals will be good though.
Posts: 2463 | From: New Jersey USA | Registered: Dec 2007
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Tukuler
multidisciplinary Black Scholar
Member # 19944
posted
Any opinion on that private citizen $6000/year no questions asked $$$$ give-away to the sufferers at twice the Fed poverty level?
Honestly I don't see a Black collective in the USA anymore now that anyone here with a black skin regardless of heritage is seen as an American Negro by American Negroes and the home grown American Negroes are inventing blackEurope and blackNative identities for themselves while ignoring the spike in criminal behavior in black residential areas.
I intend for me and mine to be among those individuals who are good.
quote:Originally posted by Tukuler: Any opinion on that private citizen $6000/year no questions asked $$$$ give-away to the sufferers at twice the Fed poverty level?
Honestly I don't see a Black collective in the USA anymore now that anyone here with a black skin regardless of heritage is seen as an American Negro by American Negroes and the home grown American Negroes are inventing blackEurope and blackNative identities for themselves while ignoring the spike in criminal behavior in black residential areas.
I intend for me and mine to be among those individuals who are good.
I dont know exactly what type of collapse is coming but its coming. Some type of reset. Right now there is a work rebellion and the "Fight for 15" just turned into the "Fvck 15 we want 25". Nobody can find employees because the wages are shit. Markets are ridiculously overvalued . i dont know man, i feel sorry for folks. Hebrews and Aboriginal lunacy sucking all the air out the room. B1/fBA clowns pushing back aginast ADOS for the bag...yeah. I gave up. Im getting my bag and breaking up out hear.
Posts: 2463 | From: New Jersey USA | Registered: Dec 2007
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Tukuler
multidisciplinary Black Scholar
Member # 19944
posted
Wow! You gonna let your Personal Ancestors toil go for naught?!? Listen, I can understand. You have half a foot in Ethiopia's House. Bajan Rabbi Arnold Ford emmigrated to Ethiopia and registered the USA Aethiopian Hebrew congregations with Ethiopia's official religions wherein the emperor, back then, was the head of all religions in the nation. Rastas, another Israel cohort, was granted land at a place call Sheshamane (sp).
I got no where to run to and have half a foot in the House of American Negroes. The only community I feel deeply as mine is the Israelite community of African origins with Torah Scrolls, 'Sepharade'/Orthodox prayerbooks, observant of Sabbath and Holy Days no different than other historic Jewish communities. I ain't goin to no Mauritania (shame shame shame) and sorry Senegal, but my French is for crepe (ouch).
Yaknow, in this Struggle you gotta take Vette's advice and just go chill out with non-involvement for a spell. Though her current hiatus is no vacation. Setting a 501(c) fleet a sail in ship shape, whew. Cheer up. Head above water. Nile Rodgers --Mr Yowsah Yowsah Yowsah-- was a Black Panther you know
A luta continua to a real brother daily on the frontline not fakin the funk runnin some bunklies
Oh, I almost forgot. This one may be a big reliever, at least an eye opener about a place called ♪Vildgolia, land of the Deaf Dumb and Blind who understand your words yet never respond once to all the truth they heard.
Now don't you despair Ain't no rule that say they gotta care They can always swear They deaf dumb and blind
quote:Originally posted by Tukuler: Wow! You gonna let your Personal Ancestors toil go for naught?!? Listen, I can understand. You have half a foot in Ethiopia's House. Bajan Rabbi Arnold Ford emmigrated to Ethiopia and registered the USA Aethiopian Hebrew congregations with Ethiopia's official religions wherein the emperor, back then, was the head of all religions in the nation. Rastas, another Israel cohort, was granted land at a place call Sheshamane (sp).
I got no where to run to and have half a foot in the House of American Negroes. The only community I feel deeply as mine is the Israelite community of African origins with Torah Scrolls, 'Sepharade'/Orthodox prayerbooks, observant of Sabbath and Holy Days no different than other historic Jewish communities. I ain't goin to no Mauritania (shame shame shame) and sorry Senegal, but my French is for crepe (ouch).
Yaknow, in this Struggle you gotta take Vette's advice and just go chill out with non-involvement for a spell. Though her current hiatus is no vacation. Setting a 501(c) fleet a sail in ship shape, whew. Cheer up. Head above water. Nile Rodgers --Mr Yowsah Yowsah Yowsah-- was a Black Panther you know
A luta continua to a real brother daily on the frontline not fakin the funk runnin some bunklies
Oh, I almost forgot. This one may be a big reliever, at least an eye opener about a place called ♪Vildgolia, land of the Deaf Dumb and Blind who understand your words yet never respond once to all the truth they heard.
Now don't you despair Ain't no rule that say they gotta care They can always swear They deaf dumb and blind
Stay up brother stay up!!
Fortunately i have choices. And i am here to fight and improve just like i didnt run to the suburbs when i got my bag and cushy job. But there are implications to having wealth to move but stating in the ghetto.....financial its all for charity. So while i sit for 16-17 years in my home surrounded by black kin only to see my value not rise faster than inflation --- My Ethiopian inlaws bought a home for 3ook that goes for 700k less than 6 years later. Insult to injury, or icing on the cake in their view is their Ethiopian child getting a "Black" Scholarship. So who is really winning?
Ultimately, America dont like Negroes and i and im damn tired of giving her my expertise. Now when i have enough money to retire i will be damned if i give all my hard earned money back to her. She dont deserve it and she cost too much. I would feel like a european Jew retiring in Nazi Germany. I have racial fatigue and this place is bad for my mental health.
Posts: 2463 | From: New Jersey USA | Registered: Dec 2007
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posted
The benefits of staying in the "black" neighborhoods... is that gentrification will hit your home values sooner or later... experiencing that right now with my parents property in Phoenix, Arizona of all places.. we have a super hot post covid real estate market but gentrification of the downtown area began back in the early 2000's .. the jump is crazy... but we ain't selling... as a NYC gentrification pro.. we are gonna HOLD.. because now we have all of the lifestyle, services and benefits long awaited for...
Just look at the ghetto gentrification hit list..
Harlem Greenpoint Brooklyn, Williamsburg, Brooklyn etc... Compton Atlanta Downtown Chicago
ETC...
But never mind that devaluation of ADOS properties and neighborhoods is PURPOSEFUL...
Police deliberately direct crime, drugs and prostitution to certain "areas" of the city for "containment" and control... seen it done Way back in the 80's here in phoenix.. it is a constant GAME the Police play..
Real estate undervalue is also purposeful.. black sellers may be perceived as more desperate and the markup for the real estate agent is higher resulting in a higher commission for the agent.
Also the banks and credit institutions have built in negrophobia underwriting guidelines..
It is SO pointless to blame the victims aka ADOS..
Am I tired of Negrophobia? You better believe it.. that is why I have developed a Global Citizen lifestyle..
And I am working on my second passport/dual citizenship situation...
I got my bags packed and one foot out the door at ALL TIMES....
-------------------- It's not my burden to disabuse the ignorant of their wrong opinions Posts: 2701 | From: New York | Registered: Jun 2015
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Tukuler
multidisciplinary Black Scholar
Member # 19944
posted
Um, why would anyone want to live in a ghetto (meaning deprived slum district)? That's not my ideal black residential area. All over the USA there are predominantly Black residential areas that aren't hoods. Blacks are notorious for letting others define their ethnic label, 'true'culture (as if there's only one American Negro culture and it's "Urban"),and expected behavior and responses to outside stimuli.
If migrating somewhere without the quality of life American Negroes have built America up to, with blacks killing each other over centuries old ethnic animosity/quarrels with no solutions in sight is ones best option, look at the ratio of the target country where you will be foreigners for who and how many are immigrating and emmigrating and why?
OK, people of my previous generations willingly came to America with no intentions of ever going back. Look at the countries where Africans risk their lives to leave to flood North Africa enroute to Europe to become paid servants or underemployed criminals if lucky enough to evade homelessness and slavery in North Africa.
Well, we all gotta do what we gotta do based on what we individually perceive as best but think again if raising children who will not belong to any ethnicity of any African country they're raised in, something non-black temporal immigrants won't ever face.
Retirees are relatively worry free. Youngers with skill sets demanding top pay may be just as worry free but what of your offspring who may not acquire demanded skills? They be like all the other citizens contemplating the death risking rush to employment in Europe. They could wind up in the USA just to drive a cab.
But yes, before undergoing a post 2024 Trump America Melanophobia and likely melanopogroms,dual citizenship is a 'prime directive' if not already done then needs be, I agree.
I admit wanting to spend retirement years on Barbados because Bajans own and operate their island and don't place tourists above citizens and have sky high literacy rates and ... and ...
Ghetto's grow up around working class/middle class black neighborhoods...
I don't blame any victims of white supremacy and racism.. to blame the victim is gas lighting and Stockholm syndrome..
quote:he NFL assumes Black men start with lower cognitive skills when it decides who gets paid from a $1B brain injury settlement. Thousands are demanding that stop.
-------------------- It's not my burden to disabuse the ignorant of their wrong opinions Posts: 2701 | From: New York | Registered: Jun 2015
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Tukuler
multidisciplinary Black Scholar
Member # 19944
posted
I think some Blacks do want to live in the ghetto. Or did I mistakenly misconstrue "Black City" for slum-ghetto versus ethnic-ghetto? Don't seem so
quote:Originally posted by beyoku: i am here to fight and improve just like i didnt run to the suburbs when i got my bag and cushy job. But there are implications to having wealth to move but staying in the ghetto.....financial its all for charity. So while i sit for 16-17 years in my home surrounded by black kin only to see my value not rise faster than inflation --- My Ethiopian inlaws bought a home for 300k that goes for 700k less than 6 years later.
.
I was raised in a ghetto (Black quarter of the city) but few areas there were actual slums not even its projects (until after the late 60s early 70s joint Black ghetto & Puerto-Rican barrio riots sparked by police beatings). ♪https://www.youtube.com/watch?v=dEP6PIJubUI
Most peoples enjoy seeing faces like their own. Many peoples choose to live among mainly their own ethnicity or stock. Some gated communities are Golden Ghettoes with no slum elements at all. There are even communities with no gates, just a traffic sign telling drivers they cannot enter these streets.
I asked Beyoku to respond to Ras Baraka's $6000 give away to Newark residents living below twice the federal poverty level. It's a government program 100% funded without tax payer monies afaik. This ain't no PM so everybody outside NewArk can please reply too!
quote:White society,” the presidentially appointed panel reported, “is deeply implicated in the ghetto. White institutions created it, white institutions maintain it, and white society condones it.” The nation, the Kerner Commission warned, was so divided that the United States was poised to fracture into two radically unequal societies—one black, one white.
White Supremacy is a SCIENCE... victim blaming however kindly you want to put it... or frame it is gaslighting... GTFO.... with that sith...
This is the age of KNOWING.. google is at your finger tips and there is no excuse for ignorance..
Understanding white supremacist strategies is the only avenue for personal freedoms.. no one should suffer financially or personally because one chooses to live around black people.
Black Excellist: Top 10 Richest Black Communities in Texas
^^^^ this is why I work for myself.. I found working with large groups of white people and white bosses very very bad for my mental and physical health..
-------------------- It's not my burden to disabuse the ignorant of their wrong opinions Posts: 2701 | From: New York | Registered: Jun 2015
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quote:Originally posted by Tukuler: I asked Beyoku to respond to Ras Baraka's $6000 give away to Newark residents living below twice the federal poverty level. It's a government program 100% funded without tax payer monies afaik. This ain't no PM so everybody outside NewArk can please reply too!
I was using the term "Ghetto" as a euphemism for formerly redlined. My hood is not a slum, nor do i feel for my safety, but i do have a house full of guns just incase. In Reference to the UBI test....Its a start but as i understand it is only a test run for a few hundred individuals.
Some yeas ago i was listening to a podcast on a study in Canada where they took the poor performing students from the worst performing school. They tried mentoring, tutoring, jobs program etc. Everything to see what would boost the teens education. The thing that made the most impact of all the variables was giving the PARENTS 4-5000 a year. It was all about the money that gave the parents more resources and more importantly TIME.
We will see what effects it will have but I am not too keen on Baraka's administration. It seems typically neoliberal and corrupt. The most important transformation i have seen in the city in the past 10 years is gentrification via luxury rentals. New luxury rentals are everywhere. Its like that is all that's being built. Single family developments that locals can afford are missing in action. I a not a developer, so I have no idea of the dynamics behind the trend, but if its not luxury then its semi-luxury subsidized rentals, if not that its $750,000 2 and 3 family units. Our city is poor and this administration is not doing a good job to increase its property Tax base. This just got polished off - Teachers Village Looks good,.......2k for a 2 bedroom is hardly affordable, higher than my mortgage. This city fixes up property in PRIME locations and then subsidizes it. Its an unsustainable model.
We will see how the UBI works but unless ALL the money is earmarked i would be surprised if they complete the second year. Newark is EXTREMELY inefficient in just about everything. NJ is one of the poorest states in the Nation as far a debt per citizen. Administratively.....a lot of the city workings haven't even been moved to computer.
Posts: 2463 | From: New Jersey USA | Registered: Dec 2007
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quote:Originally posted by Tukuler: I asked Beyoku to respond to Ras Baraka's $6000 give away to Newark residents living below twice the federal poverty level. It's a government program 100% funded without tax payer monies afaik. This ain't no PM so everybody outside NewArk can please reply too!
I was using the term "Ghetto" as a euphemism for formerly redlined. My hood is not a slum, nor do i feel for my safety, but i do have a house full of guns just incase. In Reference to the UBI test....Its a start but as i understand it is only a test run for a few hundred individuals.
Some yeas ago i was listening to a podcast on a study in Canada where they took the poor performing students from the worst performing school. They tried mentoring, tutoring, jobs program etc. Everything to see what would boost the teens education. The thing that made the most impact of all the variables was giving the PARENTS 4-5000 a year. It was all about the money that gave the parents more resources and more importantly TIME.
We will see what effects it will have but I am not too keen on Baraka's administration. It seems typically neoliberal and corrupt. The most important transformation i have seen in the city in the past 10 years is gentrification via luxury rentals. New luxury rentals are everywhere. Its like that is all that's being built. Single family developments that locals can afford are missing in action. I a not a developer, so I have no idea of the dynamics behind the trend, but if its not luxury then its semi-luxury subsidized rentals, if not that its $750,000 2 and 3 family units. Our city is poor and this administration is not doing a good job to increase its property Tax base. This just got polished off - Teachers Village Looks good,.......2k for a 2 bedroom is hardly affordable, higher than my mortgage. This city fixes up property in PRIME locations and then subsidizes it. Its an unsustainable model.
We will see how the UBI works but unless ALL the money is earmarked i would be surprised if they complete the second year. Newark is EXTREMELY inefficient in just about everything. NJ is one of the poorest states in the Nation as far a debt per citizen. Administratively.....a lot of the city workings haven't even been moved to computer.
And this was even before the implementation of drugs in Black communities by the Nixon administration, which started in the early 70'.
quote: Watch: Ronald Reagan and his ‘War on Drugs’
“October 14, 1982, President Ronald Reagan declared a “war on drugs,” doubling-down on an initiative that was started by Richard Nixon.”
quote: The Black Family in the Age of Mass Incarceration
“American politicians are now eager to disown a failed criminal-justice system that’s left the U.S. with the largest incarcerated population in the world. But they've failed to reckon with history. Fifty years after Daniel Patrick Moynihan’s report “The Negro Family” tragically helped create this system, it's time to reclaim his original intent.”
quote: Exclusive: Lee Atwater’s Infamous 1981 Interview on the Southern Strategy
“You start out in 1954 by saying, “Nigger, nigger, nigger.” By 1968 you can’t say “nigger”—that hurts you, backfires. So you say stuff like, uh, forced busing, states’ rights, and all that stuff, and you’re getting so abstract. Now, you’re talking about cutting taxes, and all these things you’re talking about are totally economic things and a byproduct of them is, blacks get hurt worse than whites.… “We want to cut this,” is much more abstract than even the busing thing, uh, and a hell of a lot more abstract than “Nigger, nigger.”
Tukuler
multidisciplinary Black Scholar
Member # 19944
posted
Hidden Ways they Pass Wealth to their Heirs Tax-Free
<< Only thing I could figure out was to put the names on real property, autos, and carefully stuff a savingsw/checking acct. If yours are upright with good levels of moral conscience --ie have never fucked you over beyond tolerable limits-- remove your name before senility sets in. What've y'all come up with? >>
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Cut through the chaos with real time updates on the news affecting the global economy. Enable Notifications. Enable Later Andrew Harrer/Bloomberg/Getty Images Businessweek The Hidden Ways the Ultrarich Pass Wealth to Their Heirs Tax-Free
An inside look at how Nike founder Phil Knight is giving a fortune to his family while avoiding billions in U.S. taxes.
By Ben Steverman, Anders Melin, and Devon Pendleton Illustrations by Chris Nosenzo October 21, 2021, 12:00 AM EDT
Sitting in the bleachers by the University of Oregon’s running track, Nike Inc. founder Philip Knight offered the sort of lofty promise many other super rich Americans have made over the past decade. The bulk of his money, he told CBS News that day in 2016, would be given away—eventually. “By the time the lives of my children and their kids run out, I will have given most of it to charity,” he said. What Knight didn’t mention was that, for years, he’d been using a range of legal techniques to ensure his heirs keep control of most of his assets and profit from them in the process, quietly transferring vast piles of money in a textbook example of how the rich avoid taxes.
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Knight is now 83, and since founding Nike in 1964 he’s built a fortune worth about $60 billion. He’s hardly the only American billionaire to take advantage of lawful tax-avoidance tricks—filings show JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon, Zoom Video Communications Inc. founder Eric Yuan, and many others employ such tools. The family of Walmart Inc. founder Sam Walton pioneered one of the techniques Knight appears to have used. But because Nike is publicly traded and both Knight and his surviving son, Travis, play roles on the company’s board and must report their stock transactions, theirs is the rare case that can be examined in detail from public filings, exposing a process that’s usually shrouded in secrecy. Bloomberg Businessweek identified about $9.3 billion in Nike shares and other assets Knight has moved to his descendants, starting in 2009. The full total could be more.
“It’s a perfect case study in how the major estate tax loopholes work in tandem and how the estate tax is entirely avoidable,” says Robert Lord, a tax attorney in Arizona and a consultant for Americans for Tax Fairness, an advocacy group. Lord brought the transactions to Businessweek’s attention. Knight’s representatives declined to comment on them, beyond saying they were integrated into his philanthropic strategy.
The U.S. started collecting estate taxes in 1916, levying a 10% rate on fortunes of $5 million (roughly $125 million today) or more. The top rate steadily rose, to 77%, where it remained until the late 1970s. Then rates began to fall, and at the turn of the 21st century critics of the estate tax and the related gift tax started to score some major wins. During the George W. Bush administration, Republicans successfully whittled away at the levy by cutting the top rate and lifting the lifetime exemption for the taxes—the total amount anyone can leave to heirs tax-free. President Donald Trump doubled the exemption for eight years starting in 2018, so for the moment only married couples leaving $23 million or more to their heirs need to worry about estate and gift taxes at all. Last year the taxes brought in only $17.6 billion, out of $3.4 trillion in federal revenue, according to the U.S. Department of the Treasury. Their decline is one of many factors that have contributed to a dramatic increase in wealth at the top, helping make the 20 richest Americans, including Knight, worth a combined $1.9 trillion, according to the Bloomberg Billionaires Index.
The past decade of record-low interest rates, rising asset prices, and ever-looser tax rules has made this an historically ideal time for the top 0.1% to pass wealth to their heirs. These trends have turned once-minor loopholes in the tax code into gaping flaws. In Knight’s case, the tax savings from a sophisticated estate plan were magnified by a remarkable rise in Nike’s stock, which rode a surge in online sales to climb about 1,000% over the past 12 years and bring the company’s valuation from $25 billion to $250 billion.
First, Knight cycled millions of Nike shares through a series of trusts that effectively moved billions of dollars’ worth of stock price gains from his estate to his heirs, tax-free. Then he put most of his remaining shares into a vehicle called Swoosh LLC and let a trust controlled by his son, Travis, purchase a stake at a big discount. The chain of trusts let hundreds of millions of dollars in dividends flow to Knight’s heirs with him covering the income taxes. All this planning also ensured his family would retain control of his sneaker empire. Alberto E. Rodriguez/Getty Images
Such moves almost always happen in strict secrecy. The wealthy merely need a lawyer to draw up some documents. The IRS might not review transactions until decades later, when the giver dies and an estate tax return is due. That’s if the agency, underfunded and short on specialists, even looks in the first place. “I’ve had estate tax audits basically handled by receptionists in some offices,” says Edward Renn, a partner at Withers law firm who’s based in New Haven.
Formerly, when it became clear that wealthy taxpayers and their advisers had found a blatant loophole, Congress would close it. In recent decades, lawmakers have preferred to keep them open, but legislation put forward by congressional Democrats would seek to plug most of the ones Knight has taken advantage of. Even modest reforms to an estate tax now paid by fewer than 1 in 1,000 Americans at death could, in theory, serve as a check on intergenerational inequality, taking a 40% bite from transfers of fortunes that might not otherwise be taxed. “If you’re interested in taxing wealth,” says Columbia law professor Michael Graetz, “the estate tax is the only mechanism the federal government now has.”
To get ahead of the possible changes, the super rich are rushing to set up trusts and transfer assets to heirs while they still can, as lobbyists representing their interests work to maintain the status quo.
The foundation of Knight’s strategy is the grantor-retained annuity trust, or GRAT. His first step was to set up nine GRATs, which successfully transferred Nike shares now worth $6.1 billion to heirs tax-free from 2009 to 2016. Two other GRATs that show up in public filings received about $970 million of unspecified assets from Knight. The filings don’t disclose the ultimate beneficiaries, but Lord says that, based on how family wealth transfers usually work, they might include the family of Knight’s late son, Matthew, who died in 2004.
Officially, gifts are taxable: If you send someone more than $15,000 per year, you’re supposed to file a separate gift tax return, with the total counting toward your $11.7 million lifetime estate-and-gift-tax exemption. (Double that for married couples.) Once you reach that threshold, you must pay a 40% levy. But giving heirs the right to profit, risk-free, from your investments? Not a taxable gift if you route it through a GRAT. “It looks like the heirs didn’t receive anything of value, but in fact they have been given all of the upside growth potential,” says Ray Madoff, a law professor at Boston College. Tax-Dodging Tools of the 0.1% The GRAT (Grantor-Retained Annuity Trust)
Lets heirs profit from an asset they don’t technically own, paying an annuity back to the wealthy person who set it up—the grantor—and thereby avoiding having the funds designated as a taxable gift.
1. Set up a GRAT (or have your lawyer do it) and make your heirs the beneficiaries.
2. Put in assets, such as stocks, that have a good chance of making money over time. Technically this isn’t a taxable gift, as long as the GRAT is set to repay you the initial value of the assets in the form of an annuity, usually over two or three years.
3. If the assets go up in value during this period, the gains can stay in the GRAT, minus a (usually low) minimum rate tied to interest rates. Whatever’s left goes to the heirs tax-free.
4. If the assets drop in value during that time, your heirs are unaffected. You can pretend the GRAT never existed and try again. The more GRATs you set up—and some of the ultrarich open one monthly—the higher the chance some will succeed.
DID YOU KNOW? In an August survey of filings from 70 randomly selected S&P 500 companies, more than half had executives and top shareholders who used GRATs. The total value of shares in those GRATs: more than $12 billion. In one example, Dimon shuffled JPMorgan shares now worth $127 million into and out of GRATs in November 2020.
Giulia Marchi/Bloomberg/Getty Images
GRATs and other such tools have the basic goal of making wealth look much smaller than it really is. It’s possible to have your gifts appear to be worth almost nothing, even as you move millions or even billions of dollars tax-free. The giver merely retains a promissory note—basically an IOU that sees the trust agree to pay back the gift’s value over time. Smart businesspeople ordinarily wouldn’t hand over a valuable asset in exchange for something as flimsy as an IOU, but the rules let advisers construct the legal fiction that this is a normal transaction and not a taxable gift to the trust.
After routing a fortune through GRATs, Knight put much of his remaining Nike shares into Swoosh LLC, which exploits a loophole President Barack Obama tried to close in his final days in office. Called the minority valuation discount, it takes advantage of rules allowing taxpayers to take discounts on assets that are harder to sell. If you have a 25% stake in a $100 million private company, for example, it’s probably not worth its theoretical value on the open market: To actually turn it into $25 million, you’d need to persuade other shareholders to buy you out or to sell the entire company, then get full price for your stock.
To exploit the loophole, wealth advisers intentionally put their clients’ assets in structures that seem to make them harder to sell. If you own an apartment building, for example, you might put it in an entity whose ownership is split among trusts for various family members. Each trust looks like it lacks control of the building, which lets you tell the IRS that the sum of the slices is worth less than the unified whole.
Or you do what Knight did: Take publicly traded stock such as Nike shares and put it in an LLC, then divide that up between yourself and your heirs in a way that qualifies for a discount, minimizing your own tax bill while passing more assets onto heirs. Knight put the bulk of his Nike shares into Swoosh in 2015. The following year, Travis’s trust purchased a slice of Swoosh that effectively put him in control of Nike, according to Nike’s annual report. The 48-year-old filmmaker got a 15% discount on the company’s stock price at the time, delivering a $215 million tax-free gift from father to son. In addition to part of Swoosh, the trust (which also benefits a broader array of family members) holds $6.5 billion worth of shares, including those that left Knight’s estate through GRATs. Tax-Dodging Tools of the 0.1% The Minority Discount
Artificially deflates the value of your asset by splitting it among separate owners.
1. Take almost any kind of investment—a private company you own, a piece of real estate, a stock portfolio—and put it in an LLC or another legal entity.
2. Divide the LLC into pieces and spread it among your heirs or trusts created on their behalf.
3. Claim that the combined value of the pieces is less than the value of the whole, because no one entity controls the entire investment. Some advisers insist that their client’s stake is worth 30% to 40% less than it would otherwise be, with bigger discounts for smaller stakes lacking voting power over the LLC.
4. Later—perhaps after you die—your family can get together and sell the entire asset on the open market and profit from its real, nondiscounted value. This works even for an LLC containing publicly traded shares that, if they hadn’t been locked up in the LLC, could easily have been sold off for their full value.
DID YOU KNOW? The family of Thomas Frist Jr., co-founder of hospital chain HCA Healthcare Inc., holds its 22% stake in HCA through an entity called Hercules Holding II. His three children own pieces of Hercules through various trusts. The family has at least $500 million worth of HCA shares in GRATs and $18.2 million in a generation-skipping tax-exempt trust.
Knight’s estate planning is “very artfully done,” Lord says. The attorney, whose tax work once included helping clients use loopholes, until he grew concerned about rising wealth inequality, first ran across filings in May showing Knight’s transactions. Each filing alone looked relatively innocuous, but when Lord put them all in a spreadsheet he quickly realized he’d found something significant: The number of Nike shares Knight ran through GRATs matched those that ended up in a trust that had also become the destination for Swoosh shares. “I’ve never seen anything like this, where you can put it together,” Lord says.
GRATs fit into a category of trusts called intentionally defective grantor trusts. They’re useful to the wealthy because when the assets they hold increase in value and are sold, their creator, not their beneficiary, is taxed for the gains. In effect they let rich parents pay income taxes for their children. This loophole, like others, came about in an effort to close a different one. Formerly, when the wealthy paid much higher income tax rates than they do now, they’d hide income by routing it through multiple trusts that owed lower rates. Lawmakers in the 1950s responded by making those trusts “defective,” taxing whoever set them up instead, usually at the highest rate. But although that closed the income tax loophole, advisers later realized their clients could avoid the estate and gift tax by setting up an “intentionally defective” trust with their descendants named as beneficiaries. Knight’s regulatory filings don’t disclose exactly how much his heirs may have benefited from this feature, but Businessweek estimates the total could be more than $140 million.
An era of low rates has made tactics like these especially lucrative. The IRS requires that swaps of assets into trusts be structured somewhat like loans, and it sets minimum rates based on government bond yields. For Knight, low rates meant that Nike’s dividend, which has since 2009 delivered $380 million to trusts ultimately benefiting his heirs, would easily cover interest payments on his transactions, Lord says.
Mark Wolfson, a managing partner of investment adviser Jasper Ridge Partners who counsels Knight on philanthropy and estate planning, says the billionaire’s transactions “are integrated with Mr. Knight’s philanthropic strategy. For example, the trusts include charitable beneficiaries, and most of Mr. Knight’s assets are expected to be transferred to charitable organizations.” An estimated $50 billion remains in Knight’s estate, according to the Bloomberg Billionaires Index, and would be taxable when he dies, assuming he doesn’t have a plan to avoid those taxes, too.
Given his philanthropic goals, one remaining option would be a charitable trust, which can wipe out an entire estate tax bill. Charitable trusts—and specifically split-interest charitable trusts—can work a bit like GRATs, in that they also give heirs the chance to profit on the trust’s investments and are most effective when interest rates are low. The key difference, of course, is that they must also donate funds to a family foundation or another charity. According to IRS data, Knight already has one charitable trust, which contained assets worth $889 million in 2019. Tax-Dodging Tools of the 0.1% The Split-Interest Charitable Trust
Wipes out tax bills by placing assets in trusts that are directed toward philanthropy while also benefiting you and your family.
1. Set up what the IRS calls a split-interest trust, so-named because its proceeds are divided between charitable and noncharitable beneficiaries. These come in a few different flavors. The charitable lead trust is especially useful for erasing estate taxes when interest rates are low.
2. Place assets in the trust. This transaction doesn’t trigger estate or gift taxes as long as you follow IRS rules. A charitable lead trust, for example, must pay small amounts to charity annually over a set period, often 10 or 20 years, but can then give the rest to your heirs tax-free.
3. Invest your trust in more aggressive assets, such as stocks, because your heirs will benefit from any upside. The size of your tax deduction is based on IRS estimates of how much is likely to go to charity over the life of the trust—calculations based on interest rates at the time you donate the money. If your trust’s investments beat those assumptions, something that’s especially easy to do in low-interest-rate environments like the current one, your heirs can end up with as much as or more than you originally placed in the trust.
4. While your trust must donate to charity, the funds don’t need to get there quickly. They can flow into pots of money you control, including a family foundation (which can pay as little as 5% per year to nonprofit causes) or a donor-advised fund (a more flexible charitable vehicle that has no such requirement whatsoever).
Even though Knight escaped billions of dollars in gift taxes, he could have avoided even more. “If Knight wanted to move the entire estate to his kids free of estate tax, he could have easily done it,” Lord says. Knight could have put far more in GRATs to start with, for example, and set up far more of them (though his charitable goals might have rendered such efforts unnecessary).
For the first time in decades, the most lucrative estate tax loopholes are under serious threat. The proposal House Democrats passed through the Ways and Means Committee in September would cut the lifetime exemption in half, to about $12 million for a married couple, and it explicitly targets minority discounts and grantor trusts, including GRATs. Existing trusts, including Knight’s, would be allowed to keep operating.
The proposal would also limit the effectiveness of dynasty trusts, a powerful and increasingly popular tool that allows a fortune to propagate to multiple generations tax-free. IRS rules require that wealthy families pay estate or gift taxes for each generation the money passes through—so, for example, a $100 million gift from a rich couple to their grandchildren gets taxed twice. But to appeal to the wealth management industry, certain states—notably Alaska, Delaware, Nevada, and South Dakota—changed their rules to allow for the creation of dynasty trusts, which can last forever and allow multiple generations of heirs to live off the family fortune tax-free. (Wolfson says Knight’s trusts don’t fit this category.) Tax-Dodging Tools of the 0.1% The Dynasty Trust
Allows a family fortune to do what even the richest billionaire can’t: live forever, by preserving wealth for distant generations.
1. File to open a trust in a state such as Delaware that’s abolished the long-standing tradition of requiring trusts or other legal arrangements to have an expiration date. You don’t need to live in one of these states to take advantage of its looser rules.
2. Get enough assets into the trust to provide for multiple generations of heirs, starting with a relatively small amount to avoid triggering a big tax bill. Trump’s tax reform established the current tax-free ceiling of $11.7 million, or $23 million for a married couple.
3. Once you’ve seeded your dynasty trust, set up transactions between it and other entities you control, including GRATs or your own bank or investment accounts. These deals should appear, on paper, to be legitimate deals, but the terms can be as generous as possible. A dynasty trust might “buy” an investment from you for only 10% of its value, with a promise to pay back the rest eventually. There’s no limit on how big the trust can get.
DID YOU KNOW? An Amazon.com Inc. Securities and Exchange Commission filing showed that at the end of 1998, Jeff Bezos’ mother and stepfather, Jackie and Miguel Bezos, held 112,500 shares in a “generation skipping” trust set up two years earlier. Those shares, potentially held for Jeff Bezos’ children and any nieces and nephews, are worth $2.3 billion today, adjusted for stock splits.
Kevin Mazur/Getty Images for Statue Of Liberty-Ellis Island Foundation
If the most popular routes around the estate tax are ultimately blocked, charitable trusts might become one of the few remaining ways for a large fortune to avoid being taxed at a 40% rate when passed from generation to generation. To date, Knight has focused his philanthropy on only a few institutions, such as Stanford, where he went to business school, and the University of Oregon, where he was an undergraduate and ran track more than 60 years ago.
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