When money gives the wealthiest 1% that kind of power, the rest of us are second-class citizens. Stopping the wealthy from buying their way to the front of the line means reducing income inequality. And a crucial step to reducing income inequality is ensuring large corporations and the wealthy pay their share of taxes.
Ottawa (14 March 2019) — While most of the headlines about a scheme for wealthy parents paying bribes to get their kids into university focused on actresses Felicity Huffman and Lori Loughlin, the real story is the role played by rising income inequality. It’s rising income inequality that has given parents the money and the motive to use their money to enable their children to get around the rules.
Bribes paid to get children of the wealthy admitted to universities when grades not good enough
The way the scheme worked is that wealthy parents paid an education consultant to pay bribes to get their children into high-profile universities. Sometimes, the bribes were for things like having someone take tests in place of the children. Other times the bribes were to allow their children to bypass academic requirements by being admitted to the university as athletes — even though they were not going to be playing any sports at a competitive level.
On March 12, the United States Attorney’s Office for the District of Massachusetts announced that 50 people had been charged. The overwhelming majority of the 33 parents charged were corporate CEOs or senior executives.
Role of tax breaks for large corporations and the wealthy
One of the root causes of income inequality is that large corporations and the wealthy don’t have to pay their fair share of taxes. Tax cuts, loopholes, and being able to get away with using tax havens have all allowed the wealthy to pay far less tax than they once did.
While supporters of more tax breaks for large corporations and the wealthy claim that when the rich and large corporations have more money, they will invest it in ways that create jobs, that isn’t what has happened in practice. Instead, the rich accumulate more and more wealth, and the ways they spend it are often bad for society and bad for the planet. The wealthy paying bribes to allow their children to get around the entrance requirements for university is only one example.
When public services are underfunded, more people are left behind
At the same time that tax breaks let large corporations and the wealthy accumulate an increasing share of the planet’s wealth, they create budget problems for government. The underfunding of public services is an inevitable consequence. For low- and middle-income families the under-funding of public services increases the risk that you or your children will be left behind.
For the wealthy, it means using their money to avoid the consequences of cuts to public services like education and healthcare. And for a significant number of well-heeled individuals, their sense that the rules should only apply to low- and middle-income people means they don’t seem worried about whether the way they use their money is against the law.
Underfunding public services increases ability of wealthy to legally bypass the rules
Underfunding public services doesn’t just make it more likely the people from low- and middle-income backgrounds will be left behind. The under-funding of public services produced by tax breaks also provides legal ways for the wealthy to get around the rules.
When public funding is cut, many services try to raise money from wealthy donors. When services are able to raise money from the wealthy donors, the donors often expect more than recognition in exchange for their donation.
As everyone from academics to late-night TV show hosts have pointed out, there are plenty of examples of wealthy families suspected of using donations to universities as a legal way to bypass the academic requirements that students from low- and middle-income backgrounds would have to meet. One of the better known examples is Jared Kushner, Donald Trump’s son-in-law and advisor, whose acceptance into Harvard followed a $2.5 million donation to the university from his parents.
Reducing income inequality makes it harder for the wealthy to buy their way to the front of the line
People are understandably angry when they see rich families using their money to get around the rules. When money gives the wealthiest 1% that kind of power, the rest of us are second-class citizens. But, stopping the wealthy from buying their way to the front of the line is about reducing income inequality. And a crucial step to reducing income inequality is ensuring large corporations and the wealthy pay their share of taxes.
The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 390,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. — NUPGE