Tax breaks for teachers unlikely solution

“We should make teachers pay no tax…It’s not just the money. We need to make teachers a special class in our society.”

I would suspect that, at this very moment, more than a few of my readers have already moved on to the next section of the paper after reading that opening line. I can almost hear the eye rolls and the head shakes. “There goes that Frost fellow again, quoting some left wing socialist clap trap about teachers.”

While it is true that I do lean to the left, politically speaking at least, this quote did not come from some left-wing think tank, nor some crusading educational reformist, nor even some fat cat union boss. (For what it’s worth I know several union bosses and I would describe none of them as “fat-cat”.) No, oddly enough, this idea about how we should compensate teachers comes directly from one of the wealthiest and most influential businessmen in the world.

Stephen Schwarzman is the CEO and co-founder of the Blackstone group, a Park Avenue hedge fund company that was handling somewhere in the vicinity of $470 billion in assets in 2019. He is somewhat infamous for making donations in the nine figure range, (Yes, nine figures.) including a $188 million donation to Oxford University, and a $350 million gift to MIT to put towards their study of Artificial Intelligence. He is also a close personal friend and advisor of Donald Trump. When one thinks of abjectly nauseating personal wealth, Schwarzman comes in towards the top of the heap.

But back in April, appearing on CNBC’s talk show “Squawk box” , Schwarzman outlined what he called a “Marshall Plan” for economic reform in the US to raise up the middle class. His three points were 1) raise the minimum wage, 2) provide more resources for technical training programs in schools and 3) eliminate taxes for teachers.

Now, it is not uncommon for insanely wealthy businessmen to have an opinion on how teachers should be compensated. Mostly, however, these suggestions tend to run along very similar lines, often mirroring the private sector. Indeed, a few years ago, a group called the Canadian Council of Chief Executives (now The Business Council of Canada) commissioned a full report on the subject, determining that teachers pay should not be based on their years of service, but rather on some sort of performance metric. For a bit of financial context, the members of that particular organization control somewhere in the vicinity of $4.5 trillion in assets.

Certainly, local well to do’s like John Risley and Bill Black have been anything but shy about their views on our education system, and I have often found myself puzzled by this seemingly obsessive pre-occupation the uber-wealthy have with my pay cheque. The concern comes from a rather fundamental ideology that is shared by many of the one-percent. The belief that markets should be allowed to function free of government “interference” (read: regulation) is seemingly ingrained in the minds of many a millionaire. This idea is the very basis of neo-liberalism, which equates the accumulation of personal wealth with individual freedom, and often ties back to the notion that the rich simply carry too heavy a tax burden.

That is why it was such a novel moment to hear someone like Schwarzman specifically mention an elimination of taxes on teachers as a possible way of improving the overall education system. Although Schwarzman was using the same rhetoric often spouted by reformers about how “Our graduates simply aren’t competitive on a global basis” and used America’s poor showing in large scale international assessments to support his argument, his solution was novel, if nothing else. As opposed to increasing accountability measures and looking for ways to devalue the teaching profession, Schwarzman took a very different approach. If we want the best and brightest coming out of our schools, it may be time to look for ways of enticing the best and brightest minds to the profession.

What was even more interesting in Schwarzman’s plan was that he did not suggest a series of tax breaks, like the $500.00 that, thanks to Justin, teachers can now claim for buying classroom supplies out of their own pockets. This was a complete elimination of federal tax on teachers. And Schwarzman was very clear on the purpose. This was not simply about monetary compensation, but rather about raising prestige. To improve the American education system, Schwarzman surmised, “We have to address getting the best people.”

Now, in the name of full disclosure, it would be unlikely that I would be against a similar scheme here in Canada, where the federal tax rate for an average teacher salary of $70,000.00 comes in at about 15%, give or take. Certainly, if I were to suddenly have to stop donating 15% of my paycheque to the feds, I would not be too particularly upset. As well, tax breaks, on paper at least, are actually worth more than pay increases, since the latter are, of course, subject to tax.

However, as much as I might be personally tempted, Schwarzman’s idea is flawed. Standardized test scores are not an accurate measure of how well or how poorly a particular jurisdiction is doing educating its young people, they are simply convenient. Furthermore, there is absolutely no evidence of any validity that shows public schools are not preparing students to compete in the global marketplace, nor, indeed, that this should be the primary purpose of public education. Finally, Schwarzman’s basic premise that providing higher financial compensation would bring in “the best” people does not hold up under any serious scrutiny. While financial compensation is important up to a certain point, I don’t know if it could be argued that it results, somehow, in a higher calibre of human being being drawn into the profession. If that were true, lawyers would all be saints and, well, Donald Trump.

However, there is something in the idea that I do like. That is the bit about prestige. If we truly do value education, and truly do want the best, and the brightest, and most dedicated individuals at the front of our classrooms, we may want to turn our minds to that particular piece of the puzzle. And although the idea of eliminating taxes for teachers may not be the answer, that one of the wealthiest individuals in the world is suggesting that we need to take a look at how we view the teaching profession is nothing if not refreshing.

I wonder if I can get Schwarzman to give our Premier a call before NSTU contract negotiations resume this fall?

Originally published in The Chronicle Herald, Monday, July 29th.