Sometimes, even people you respect do stupid things. I’m talking about the Obama Administration’s proposal for taxing families that put money into 529 college savings plants. Right now, parents can set aside funds for their kids’ college education which gets invested in mutual funds and any growth in investment is tax free. In other words, when your son or daughter is ready for college, if you put $20,000 away and it’s now worth $30,000, that $10,000 gain goes untaxed. 

So according to Ron Lieber, financial columnist for the NYT, the proposal would have the IRS hitting families with capital gains tax on the increases from the investment going forward, but also grandfathering the proposal to tax past gains. I admit to having a direct stake in this. We’ve been saving for my son’s college tuition since he came into the world. He’s now a sophomore in college and that 529 fund has paid his tuition. There’s no way we could have paid the hefty cost of college without those savings.  Don’t we want to reward families who put away money for their kids’ college education? Why would we ever take away those tax advantages?

According to Lieber, it was an idea that was never going to happen but it was floated. The idea is that people who have enough money to put away for college savings could part with some of it and pay higher taxes. But Lieber also noted that

money from affluent families have helped lower administrative costs in the 529 plans, which used to be much too high. Everyone benefits from that, including families with less money. There was also the fear that if there’s little or no tax advantage, wealthier families wouldn’t invest in 529s, forcing many states to close down their plans. That would discourage people with less from saving what they can.

The Administration didn’t press forward with the plan. “I think what they failed to recognize is how proud parents are of their decision to set aside money for college,” said Joe Hurley, the founder of a savingforcollege.com. “It isn’t money for a fishing boat. It’s money that they are sacrificing. Anything that threatens that is essentially telling them that they did the wrong thing when they felt like they did the right thing.” That’s right. And that’s why this idea of taxing growth on 529s made no sense and was a sure fire way to get people riled up and angry.  Glad the story has a happy ending and they scratched the plan.

 

This week marks our nation’s annual celebration of Martin Luther King Jr. day. As we honor a truly great American icon we keep in mind two parallel and pertinent events that are occurring in America. One is the increasing awareness of the epidemic of police killings of black men (and black women too, though not as frequently). “The Root” enumerates 20 unarmed African Americans and the stories surrounding their killings by police.

The killing of Tamir Rice, is particularly troubling. Tamir, 12, was killed by a Cleveland cop as he waved a toy gun around in a park – this very officer had been fired from a suburban Cleveland police force for being too impulsive and lacking in good judgment. The Cleveland police department hired him without doing a background check.

As protests have sprung up across the country, with proclamations like “Black Lives Matter,” surely King would have led the marchers across America to protest these terrible killings and seek solutions.

The second event revolves around the movie “Selma.” The film, currently in theaters and directed by a black woman, stars a black actor and focuses on MLK’s campaign for voting rights in America.

While the reviews are positive, neither the director – an African American woman – nor the actor who vividly portrays Dr. King’s struggle to achieve the right to vote for African Americans – have received an Oscar nomination.

In the movie, King’s political skills are in sharp relief: he refused to be cowed by President Lyndon Johnson. He led his followers through a phalanx of dangerously racist cops and locals wielding nightsticks nail studded clubs, whips and guns. These scenes are depicted so graphically I could hardly watch.

The tense phone conversations between King and LBJ have viewers on pins and needles. LBJ capitulates and eventually passes the Voting Rights Act, because he has to. He accuses King of reckless opportunism, but the civil rights leader triumphs because he makes the case that without voting rights, blacks are denied power to throw out white office holders who deny them the right to vote, the right to march, the right to be free of harassment and discrimination.  Martin Luther King, a disciple of Mahatma Gandhi, wins the day,

There’s something else – something troubling – being played out on another totally different stage: neither the African American female director nor the actor playing King were nominated for Academy Awards.

So how important is an Oscar nomination anyway? Very important, and for a variety of reasons. Over the weekend CNN featured two men debating whether the Academy was racist. The white commentator said no, absolutely not, The Help and 12 Years A Slave, the first about black maids in the South as the civil rights movement unfolded and the latter, about a free black man in the 1850s kidnapped and sold into slavery, both won major awards in the last few years . The African American commentator laughed. “I thought you were kidding. The Academy is only comfortable acknowledging black actors playing servants or slaves. But in a film like Selma, black actors and directors don’t get any recognition.”

The director of “Selma,” Ava DuVernay, is a black woman who for years sought studio backing to make the movie. And, as David Carr wrote in the New York Times this week, “No club in the United States — over the last several years, the academy has been around 93 percent white, 76 percent male and an average of 63 years old — is in more need of new blood than Hollywood.”

Carr further argues for the importance of Oscar recognition. He says the Oscars, “convey recognition at the highest level of a craft that is seen by millions.”

These two seemingly vastly different issues are not so different after all. They are both focused on the value of African American life in America and African American contributions, social, political, and cultural. Yes, we have an African American president and that is a milestone, but America still suffers from the ugly legacy of slavery and I fear that we continue to minimize the value of African American life and African American achievement in America.

2015 is a historic year  – it marks the 50th anniversary of both the Selma marches and the Voting Rights Act. We could recognize these events by acknowledging the risk black men face every day at the hands of the police – and that police officers have a hard job – and supporting campaigns like “Black Lives Matter.” We need also to recognize the talent and achievement of black directors, actors and producers at the Oscars. Martin Luther King would have been very proud, I think, of Selma, and especially its directors, actors, and producers. Happy MLK celebration to all.

Sometimes I really hate what lawyers do to parse the plain language of the law. Last week was a case in point. I attended Supreme Court argument in the case of Peggy Young vs. UPS. Young challenged her treatment as a UPS worker expecting a baby and needing to go on light duty but the company refused to reassign her. The statute in question is the Pregnancy Discrimination Act of 1978 (PDA). 

As it happens, I worked on getting that bill passed as a Congressional staffer. In 1978, Congress rushed into action to overturn a blatantly absurd finding by the Supreme Court in a case called Gilbert vs. GE where the Court actually said that not making physical accommodation for pregnant women in the workplace while accommodating all sorts of other disabilities wasn’t sex discrimination under the 1964 Civil Rights Act but simply discrimination against pregnant people.

Ahem. Pregnant people are ALWAYS women so in fact the finding in Gilbert is in fact discrimination against women. So why were we back at the Supreme Court again last week 36 years later re-litigating this case?  The PDA is very simple. It says:

To amend Title VII of the Civil Rights Act of 1964 to prohibit sex discrimination on the basis of pregnancy.Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, that section 701 of the Civil Rights Act of 1964 is amended by adding at the end thereof the following new subsection:

“(k) The terms ‘because of sex’ or ‘on the basis of sex’ include, but are not limited to, because of or on the basis of pregnancy, childbirth, or related medical conditions; and women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work, and nothing in section 703(h) of this title shall be interpreted to permit otherwise.

In other words, pregnant women should be treated the same for all employment related persons as those with similar in their ability or non ability to work.

Peggy Young simply wanted light duty at UPS late into her pregnancy, as ordered by her doctor. UPS wouldn’t accommodate her. But men with other similar disabilities, including those with DUIs who couldn’t drive a truck, were accommodated. This doesn’t seem like rocket science. But the Supreme Court seemed to think interpreting the PDA was very complicated. What did each word mean and why was it there? As Lyle Denniston of SCOTUS Blog commented on the case: “ The Justices probed deeply into what that section’s words — and punctuation — convey, even to the point of trying to sort out whether a semi-colon made a difference.  There did not appear to be a consensus on the meaning.”  I mean really! There was a great deal of consensus in Congress when the PDA was enacted.

Peggy Young’s plight is not isolated. Appearing before Congress earlier this year, Armanda Legros testified that she was sent home by her manager at an armored truck company, indefinitely and without pay, when she was six and a half months pregnant and had to avoid heavy lifting. She also testified that a co-worker who injured his back on the job was granted the accommodation that she was denied. UPS claims that the comparisons are between those who are injured on the job and those injured outside of the workplace, in which case UPS claims it has no duty to accommodate them and pregnant women fall into that category. 

I can tell you that when Congress enacted the PDA, it was meant to cover exactly Peggy Young’s case – if men at UPS had disabilities that are accommodated, so should Young. I’m told by Supreme Court scholars pregnant women might lose this case. How sad. In fact, UPS has changed their employee practices to ensure that pregnant workers have a right to light duty when needed. But we have to go thru this slow tortuous process to protect pregnant women’s rights nevertheless.

NCL filed an amicus brief in support of Young, joining the ACLU and many other groups. Among the arguments in the brief is that when women are forced to leave the workplace because of pregnancy-related conditions, while other workers with similar limitations are provided light duty, women suffer the very discrimination that Congress sought to eradicate. They lose income, economic security, and benefits, including health insurance, often with devastating results.

I found that listening to the case – I was in the overflow room at the Court reserved for members of the Supreme Court bar –infuriating. Why are we still debating these basic rights for working women. I only hope that the Supreme Court will look at Congressional intent in passing this bill and finally, 36 years later, give Peggy Young and all pregnant women who work the kind of accommodation Congress intended them to have when it passed the PDA. That’s good for women and good for families.

Consumer advocates often lament the number of consumers who are “unbanked.” It’s true that having a bank account is a sign of stability and that having your money attached to a checking account and ATM card can help build credit and promote long term saving. But it appears that banking fees have driven millions of low income customers away; 25 million Americans are unbanked. Another 63 million are under-banked, which means they may have bank accounts but rely on some alternative financial services. These include check cashers, payday lenders, prepaid cards, and lending and saving circles instead of banks. 

I happened to see one of my relative’s Bank of America statements; this relative doesn’t earn much of an income. He opened a bank account with a $100 deposit and three months later there was only $25 left. He hadn’t spent any of money; the $75 went toward a $25 monthly fee to maintain the account. Thank god he didn’t bounce any checks; his account would have been wiped out.

Several years ago the New York Times Magazine, in a story about payday lenders, quoted a low-income customer who used Payday lenders because their fees were predictable. He said he couldn’t trust bank fees because he never knew what they would cost. He closed his bank account after bouncing two checks at $39 a pop.

This week’s New York Times featured an op-ed written by Lisa Servon, a profession of urban politics in New York who worked for a short period at Check Center a payday lender in Berkeley, CA. Her customers found that bank fees had increased 25 percent in one year, that only 39 percent of noninterest bearing checking accounts were free, down from 76 percent in 2009, and the average overdraft fee is $32.74, and low income people bounce checks because they have little or no financial cushion. Some of the payday lenders charge less for a money order than the post office. And Servon points out that bank overdraft charges could amount to 5,000 percent if viewed as a seven day loan. Servon concludes that the problem isn’t the unbanked. It’s the banks that have become too expensive.