Millions of dollars are being invested in the private prison by Wall Street hedge fund managers, Fortune 500 Corporations and everyone else seeking to profit off of American’s most booming business. We all know the facts and statics on the rising rate of incarceration and how it its not a cost effective measure, but a profit driven motive to those who seek to profit off prison labor. But, what is not known is these same 500 Corporations and Wall Street hedge fund managers are making a windfall of money by not only investing in private prison, but on their investment in Charter Schools. It all started back in 2001, when then President Clinton signed into law, the ‘Consolidation Appropriation Act’. This law included provisions from the ‘Community Renewal Tax Relief’. The law provides tax incentives for seven years to businesses that locate and hire residents in economically depressed urban and rural areas.
“As a result of this change to the tax code, banks, and equity funds that invest in Charter School in undeserved areas can tax advantage of a very generous tax credit. They are permitted to combine this tax credit with other tax breaks while they also collect interest on any money they lend.” – Washington Post-
This is why CEO Mark Zuckerberg partnered with former Mayor of Newark, New Jersey to promote charter schools and to donated a half a million dollars worth of stock to organizations that distribute charter school funding; and opened his own foundation, Startup: Education, to build new charter schools.
Charter schools are booming. There are now more than 6,000 in the United States, up from 2,500 a decade ago, educating a record 2.3 million children.
Charter Schools are lauded as better schools, but there is no known statistics which states Charter School graduation rates surpass those of public school students. The reason why its being promoted so heavily is because its a for-profit business field by both Republicans and Democrats.
According to FORBES, “Charter schools are frequently a way for politicians to reward their cronies. In Ohio, two firms operate 9% of the state’s charter schools and are collecting 38% of the state’s charter school funding increase this year“.
After Zuckerberg’s sizable donation was made in New Jersey, many called it a failure due to the fact that much of the money went to consultants and the tight knit reform movement. According to several reports, consultants were getting paid up to $1,000 a day. “Everybody’s getting paid, but Raheem still can’t read,” states, Vivian Cox Fraser, the president of the Urban League of Essex County.In May of this year, Zukerberg and his wife announced a $120 million investment in Oakland, CA. The problem with taking private philanthropic money? is there is really no reform in education, the children in Newark, NJ will continue to read below grade level and Zuckerberg will receive a hefty return and tax break on his investment.The truth of the matter is that anyone who invest $10 million in Charter Schools can double there money in seven years through a 39% tax credit as well as a tax credit on money that they’re lending. You’ll be able to collect interest on the loan as well. Its a win-win for Mark Zuckerberg to invest because its a guarantee he will double his investment in 7 years.