How to do it
by Troy Henry
Upon arrival in America, Black Americans were enslaved for several hundred years. And the impact of this systematic and institutional practice still has a multi-generational impact on many Black Americans today. The enslavement and de-humanization of the Africans brought to America for economic and white lifestyle purposes is truly the original sin of this country. Our government made numerous promises of reparation (40 acres and a mule). Yet real efforts to compensate African Americans have been paltry to non-existent. Black communities today continue to reflect inhumane conditions that are the repercussion of approximately 400 years of pain and suffering.
A nation of people does not just snap out of this type of institutional racism. It takes time and proactive efforts to truly attempt to right the wrongs of this sin. Historically, oppressors have compensated their victims. The people of Germany compensated the Jews for the Holocaust. America compensated the Japanese people as a result of the WWII internment. However, the White American community has never fully addressed the most heinous of all punishments inflicted on a people that are largely responsible for building this great country.
Reparations For Slavery
There has been much written recently about the need for reparations for Black Americans, and most of these articles have been thoughtful and “on point”. I would like for you to reference several outstanding articles that prompted me to write this body of work. Each has a unique perspective and discussion regarding the need and benefits of reparations.
The link below is a CNBC article profiling the need and growing support for reparations.
The link below provides the perspective of the wealthiest Black American (Robert Smith Jr) regarding reparations.
The link below gives you the perspective of one of America’s great entrepreneurs (Bob Johnson) regarding reparations.
The article below attempts to establish the value necessary to properly compensate Black Americans reparations.
While each of these articles and many more do an outstanding job of justifying the necessity for Black American reparations, none of them fully address the high-level implementation of such a program. The remainder of this article will discuss a practical approach to funding the program and the benefits associated with it.
RELATED: WE NEED MORE THAN SYMBOLIC CHANGE
Today, the current US stock market including NYSE, NASDAQ and OTC markets have a value of approximately $37 Trillion. This figure captures the current market value for all publicly traded enterprises. The Federal Government has approximately $300T in assets under management in the form of property and other assets. While it is impossible to trace each asset and company to the act of slavery or any derivative activities, many of these enterprises (public and private) were directly or indirectly the beneficiaries of this heinous systemic sin of slavery.
My approach for reparations for each individual Black American, would target any individual with a gross income of $500,000 annual income or less based on your most recent tax return. Neither I (small business owner), Rob Smith (Vista Equity CEO), LeBron James (NBA great) or many others Black Americans would participate in this program, because they have successfully and permanently overcome the scars of slavery. Also, individuals who immigrated to the US after 1990 would also be excluded from the program even though their ancestors may have experienced slavery, it was not in the USA and therefore would not qualify. Based on the above qualifiers approximately 5 million out of the 45 million Black Americans would not qualify. Based on the numbers above, a reparations payment of $10Trillion would pay to create a one-time payment of $250,000 to every Black American born before 1/1/2021 or whatever date is appropriate.
Is Money Available?
So how do we generate $10T without crippling the entire US economy? Answer: Every publicly traded company would pay a 15% one-time tax on the market value of their company. Since most companies would not have that amount of funds on hand, its payment could be made in the form of additional shares of contributed stock to the fund. While this would cause an immediate dilution of share value, it does not put any company at a competitive disadvantage since their competitor would be subject to the exact same tax and repercussions. As a result, over time the market will respond to this tax much like it has done to the Corona Virus. This would generate approximately $6T for the reparations fund.
The 2nd source of funds would be the federal government. The Federal government has the ability to issue one-time payment funds like what was done for the Corona Virus. In addition, the federal government has un-used and under-utilized property that could be contributed to the reparations fund. While some of this land may be less desirable, it would represent value to the fund and could be monetized if necessary. This federal contribution would represent an approximately $4T contribution to the fund.
The reparations funds would be managed on the behalf of the Black American recipients by 10 Black-owned securities firms ($1T each), thereby making them significant players in the financial community with the power and ability to train future financial leaders of America. The financial management firms would commit to a minimum 6% annual rate of return to remain in the program.
Each of the 40 Million Black American qualified recipients would have the option to take the cash as a non-taxable lump sum of money or as a cash dividend (non-taxable) from the fund. Any recipient of the funds must agree not to receive any other federal government subsidies such as: food stamps, Section 8 housing voucher, etc. Also, this would assist the federal government in reducing its entitlements budget. For Black Americans stuck in the entitlement system, these funds represent access to self-sufficiency and self-determination.
The impact on the Black community would be immediate and extremely positive. Allow me to give you an example of the fund’s effect.
Assumption: family of 4, husband and wife with 2 kids (3 & 5years old)
Recipient qualifies for $250,000 times 4 family members equals $1M
Recipient chooses to leave the funds with the fund manager and receives a 6% annual dividend equal to $60,000.
In addition to their normal income, the family has $60K non-taxable income to pay for a better school, home, or new business
Assumption: Single individual (age 25)
Recipient qualifies for $250,000
Recipient chooses to payoff $50,000 in debt and purchases a home without a mortgage for $200,000.
The recipient can now continue their life debt free.
Use of the proceeds can have a myriad of potential positive and negative examples, One essential element to this program will be that anyone choosing to take their funds out of the program must enroll in a financial management course to aid them in the best course of action for using these funds. Only after a person successfully completes the course will funds be distributed.
BENEFITS of REPARATIONS
There are a significant number of benefits to this reparation program that can transform our country and attempt to make up for the nations original sin. The US budget would be less burdened with entitlement programs due to the program, thereby allowing the government to increase funding for roads, public education, and other priorities. America would be a more educated nation since more and better educational opportunities will emerge. There will be more innovation due to an increase in entrepreneurship because lack of capital cripples many small businesses. Crime will be reduced since the economic conditions for many of our fellow Black Americans will have improved significantly.