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The value of adding political contributions to your financial plan

by Williams D. Brack, Special to The New Tri-State Defender

When I was a financial planner, I taught my clients the financial fundamentals in addition to providing financial advice. The strategy is timeless and still works: manage your risk using insurance, tithe, invest early and often and leave a legacy without compromising your lifestyle in retirement.

This strategy needs to be updated. Political contributions should be added to the list of financial fundamentals.

Donating to political issues and candidates isn’t exclusive to the rich. There is so much money in politics. Donating has become equally as important as voting.

According to the Washington Post, nearly half of the donors to Barack Obama’s presidential reelection campaign in 2011 gave $200 or less. Bernie Sanders received donations from over 2 million small donors, with an average amount of $27. The Democratic Party candidate for Shelby County mayor notes that his most popular donation amount is $20.18.

With a seemingly growing disconnect between average citizens and elected officials, it is important that the masses donate consistently to political candidates. Corporate campaign spending and lobbying don’t just stand in the way of a fair political system, it also stands in the way of an economy that works for the middle class.

Money doesn’t just give big donors the chance to support a candidate; it also gives them leverage to reshape the economy in their favor. The policies that the rich and corporate want –a extremely low tax rates on the wealthy at a time of record deficits, underinvestment in our future, and special incentives and tax breaks – are increasingly at odds with the policies the working and middle class desperately needs. The favored policies of the wealthy and corporate are imposing major financial risks on our society.

In Memphis, education is underfunded, we need more police officers, existing public safety employees deserve raises and better benefits, public transit is underfunded and even more streets need to be paved. While most agree Memphis needs more tax dollars to fund government services, since 2016, the City of Memphis has given tax breaks to 37 companies in the name of “economic development.”.

According to the Economic Development Growth Engine (E.D.G.E.), in 2016, 2017 and so far in 2018, the City of Memphis sacrificed $13 million, $134 million and $48.5 million respectively of annual tax revenues.

While I understand the importance of tax incentives in attracting new corporations and jobs, city officials must be more discerning about the types of companies and the number of abatements given annually. The abatement of taxes for corporations is on the back of a community in need of funds for vital government services.

Recently, Fitch Credit Ratings upgraded the City of Memphis’ bond rating. This upgrade will allow the city to borrow money cheaper when borrowing is necessary. While giving credit to our economic development efforts, Fitch Credit Ratings “expects revenue growth of the city to remain sluggish given the modest economic expectations and recent population trends.

Also, the City’s expenses are expected to rise at a rate that exceeds revenue growth.”
Adding political contributions to your financial fundamentals will ensure that people who represent all of us – instead of a rich and powerful few – will be elected to represent our interests.

(Williams D. Brack is a commercial banker, civic volunteer, and community activist. He can be reached at [email protected].)

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