SAT.. AUGUST
TKECASCUSATIZZS-IS
Tax Shelters To Spur
Black Economic Progress
by William R. Morris, President
Housing & Community Development Consultant
Blacks who are making it now should take a serious
look at tax sheltered real estate investments as a means
to gain personal financial security, enhance black
economic development, and provide housing for the
poor. It may come as a surprise that federal tax laws
can be used to achieve such important goals for blacks
but it is quite plausible and entirely feasible. ,
Mighty tides are drawing new real estate money back
into the cities, including black areas, that, until recently,
had been written-off as bad risks. Now, the energy
crunch, high housing costs, downtown revitalizations
and federal tax laws are coalescing to accelerate a
"back-to-the-city" movement in city after city. Heavy
investments have already occurred in many downtown
business districts. The play is now turning to nearby
older neighborhoods occupied predominantly by
blacks. Tax sheltered real estate investments are becom
ing so significant these days that innercity properties are
sought by sophisticated investors as the best tax game in
town.
If blacks own enough depreciable real estate it is
possible for them to shelter their entire income from
personal taxes. Uncle Sam, in fact, encourages this
result because the more people invest in real estate the
better housed our nation becomes. Tas shelters are
neither illegal or immoral. They exist mainly because
Congress feels that they are socially and economically
useful. The encouragement of investments through real
estate tax sheltering is one way of helping to achieve the
national goal fo decent housing for all people.
The secret? Ownership of depreciable real estate,
such as apartments, office buildings, stores and
warehouses. Any property held for investment or for
use in a trade or business cna qualify for special tax
treatment.
A true tax shelter is an investment where the investor
saves more income tax dollars than he spends on the
property. Depreciation is the best shelter of all because,
to be entitled to this deduction no actual payment of
cash is required. Maximum depreciation is the goal of
most investors.
In buying a $100,000 rental property, for example,
the non-depreciable land value is estimated at $20,000
and the structure at $80,000. Being an older building
you select a 20-year remaining useful life for it. After
paying all of the property's expenses the property pro
duces $3,000 in annual net income which you put in
your pocket. Using the straight-line method would give
a $4,000 annual deduction for depreciation, or a tax loss
of $1,000 which can then be subtracted from your other
income.
Real Estate Syndication's
Syndications can offer middle-income blacks a conve
nient and rewarding way to invest in real estate. The
group ownership of an interest in real property is
popular because it lets the individual who is not profes
sional in the real estate field share in the tax benefits, in
come, and capital appreciation features of ownership.
Syndicates have been formed to own all types of pro
perty from office buildings to orchards. Some own only
one property; others own multiple properties. Limited
Eartnerships are the most popular form of ownership
ecause of their tax and operating advantages. In this
kind of partnership there is usually one or more
"general partners" who have no voice in management
but their liabilites are limited as they would be in a cor-
Public syndications are regulated by both the state
and federal Securities and Exchange Commission. The
niore popular private syndications can be exempted
from regulation if they meet both state and federal
guidelines. The first step in evaluating any syndication
s to read carefully the prospectus. Everyone is advised
:o consult a good attorney and tax accountant before
making an investment. Tax sheltering is complicated
and subject to legislative changes. Many people in high
income brackets legally pay no income taxes due to
these kinds of investments and its perfectly legal.
For blacks, real estate syndications offer the pooling
of funds with others to invest in properties that may be
beyond the reach of one individual; no management
worries; and higher returns on investments. As more
and more blacks (many now have two incomes in the
?amily) enter the 50 and up tax brackets it makes real
50od sense for them to consider the increased incomes
ratential from tax sheltered real estate investments for
hemselves and, if they have an interest in racial ad
ancement, to understand that their investment can help
reed new life into low-income communities and pro
vide a better economic base for blacks in areas where
roperty values are increasing.
Remembering
There is a lot of truth in the old saying that people
have short memories. Psychologists tell us that we
especially tend to forget unpleasant events, which
generally might be a good thing, for our mental well
being. But some things we should not forget.
Working now in the heat of summer, 1980, we recall
the depressing terror of those summers in the late 40's
and early '50's when swimming pools and movie houses
were closed to children, and all public gatherings, in
cluding" church services, were discouraged. People pret
ty much stayed at home during those summers.
Infantile paralysis, as it was widely known, stalked a
large part of this country, especially the South. During
the peak epidemic years 1952 through 1954
132,000 people, mostly the young, were infected by
polio in this country, 56,000 of whom were paralyzed.
Over 6,000 died. The iron lung with its wheezing bellows
became a familiar and frightening symbol of what was
happening.
According to Dr. J.N. MacCormack, head of the
state's Communicable Disease Branch, North Carolina
suffered a reported 6,627 cases of polio from 1945
through 1954. The first polio vaccine was approved for
general use in April of 1955, and slowly this dread
disease was brought under control.
It is important to keep in mind that polio has not been
eliminated, as was smallpox. The polio virus is still with
us, and every year there are cases in areas where people
are not fully protected with the vaccine, which can now
be taken orally.
Public health officials constantly remind us that all of
the vaccines in the world are of no value if they are not
used. Now they are emphasizing that the state's new im
munization law requires all students, regardless of
grade, to be protected against the childhood diseases
including polio starting with the opening of school
this fall. Even now, some upper grade students are not
fully protected.
School officials have been working for months
reviewing student health records to see who needs im
munization, a Herculean job for which they should be
applauded. Since the state has an estimated 100,000 new
students in the system each year, county health depart
ments and private physicians have been busy immuniz
ing school beginners.
This is the kind of public-interest teamwork that will
prevent a repetition of those terrible polio surrjmers.
$25 Billion
White House
Waste
By Charles E. Belle
A long hot summer
short on necessities and
knick-knacks is develop
ing for young and old in
the black American com
munities across the coun
try. U. S. Department of
Commerce Bureau of the
Census confirms that
about one out of every
seven persons 65 and over,
as early as 1977, had in
comes lower than the
poverty level. The
number of poor black
Americans age 65 and
older has increased
substantially each year.
The aging of America is
not new, but the atrocities
committed against elder
members of the black
American community is
multiplied by economic
mistakes of the ad
ministration. In 1978, fifteen million
households were main
tained by persons 65 and
older. Over sixteen per
cent of these were black
American households
representing almost a for
ty per cent jump over the
average national black
American population of
twelve per cent.
Crime, a direct correla
tion with economic disad
vantaged groups, grows
with the community's
unemployment level. For
crimes against persons, ac
cording the U. S. Govern
ment, Bureau of Census,
victimization rate of the
elderly was thirty crimes
per 1 ,000 population com
pared with about 130 per
1,000 for persons twelve
and over. Flashing the
fact that the young
unemployed are more like
ly to steal from themselves
rather than their im
poverished elders.
Larceny was the most fre
quent crime against
another person. Perfunc
tory, however, in almost
every crime category,
elderly black Americans
were more likely to be vic
tims of crimes than elderly
whites.
White House sources
&aVe,irehely3 'HStfrteettted v
that thie President's" pro
posed balanced 1981
budget has been broken by
big unemployment in
surance payments to
formerly employed peo
ple. The sum is expected
to cause at least a $3'2
billion deficit. Payments
on unemployment benefits
are expected to approach
$25 billion in 1981, while
revenues will total only a
little more $21 billion.
Bungling the books as
usual, administration ex
perts look askance at the
waste.
The late slashes in
CETA, Comprehensive
Education Training, look
like limp spaghetti next to
this sham. Senior advisers
to the President had
predicted unemployment
would not top TVi per cent
the entire year. Eureka! !
Already it is banging at
the eight per cent mark,
making a tunnel to nine
per cent. Perhaps the
President truly believed
his balanced budget would
cure inflation after all
its clear it's killing the
black American com
munities young and old
alike.
By Gsrsld C. Hcrn3, Esqulrs
The 13th Amendment And the Future
Of Blacks In The United States
Recall the scene: Blacks attempting to
break the chains of oppression, push for
compensatory legislation. Along with their
allies in Congress they argue that because of
historic patterns of discrimination remedial
legislation is needed in the areas of employ
ment, education, etc. The foes of this drive
argue any "special" programs for blacks in
herently discriminate against whites; i.e., it
constitutes so-called "reverse discrimina
tion." Sound familiar? Certainly, it does. But
the point is that this scenario was not played
out this year, this decade or even this cen
tury. The fact is that this was the historical
backdrop for the passage of the 13th
Amendment in the mid-1 860's. The fact is
that newly freed slaves and their allies were
arguing that simply to proclaim blacks to be
"free" without extending any aid or
assistance would be a cruel deception. In
deed, they argued that blacks required
"special" assistance becuase they had a
"special" status i.e., human property.
The main demand, of course, was for "40
acres and a mule." Needless to say, the new
ly born Ku Klux Klan fiercely resisted this ef
fort and was the main proponent of the no
tion that these "special" measures and their
constitutional underpinning the 13th
Amendment was some form of "reverse
discrimination."
"The more things change, the more they
remain the same." Today, the Ku Klux Klan
guns down blacks in Chattanooga and North
Carolina and are tried by all-white juries.
Once again they argue that "blacks are get
ting everything" and that is why they are ac
ting. But what is the 13th Amendment and
what relevance does it hold for today? The
13th Amendment abolished slavery and
"involuntary servitude." However, it went
further. The framers of the 13th Amend
ment congressmen Sumner, Stevens, et.
al. recognized that is was just not suffi
cient to lift the burden of slavery from black
backs; they knew that even after the burden
was lifted, the back would still be bent and
would not be sufficient to compete in life's
race. Hence, the 13th Amendment was also
designed to abolish the "badges of slavery."
What is a "badge of slavery?" In short, it
is anything that signifies or establishes une
qual treatment for blacks. This view was
validated by the U. S. Supreme Court in the
well-known case of Jones v. Mayer where it .
was stated that denial of housing oppor
tunities constitutes a "badge of slavery" and
is thereby unconstitutional?
The Affirmative Action Coordinating
Center has taken the position consistently
that affirmative action is not only constitu
tionally permissible but constitutionally
mandated under the 13th Amendment.
This brings us to the all-important case of
Memphis v. Green, 610 FED 2d 395. This
case concerns an attempt by a white com
munity in Memphis to build a "Great Wall"
blocking out and segregating the black com
munity. This case is absolutely critical for a
number of reasons. First of all, in a time
when the KKK is on the move, when right
wing facist-minded politicians like Jesse
Helms can reach the U. S. Senate, etc.,
moves to impose South African-like apar
theid in the U. S. must be taken quite
seriously especially when it receives the
sanction of a city administration.
Secondly, this case is now before the U. S.
Supreme Court. The case was decided
favorably in the lower court on the basis that
the wall was a "badge of slavery" and
violative of the 13th Amendment. But given
the frequent right-ward tilt of the Burger
Court, it is not unrealistic or alarmist to im
agine the Supreme Court overturning the
lower court decision and sustaining the
building of such a wall. And if a wall can be
built to separate black and white
neighborhoods, why not walls to separate
blacks and whites on the job or in school?
Before you know it, U. S. society would be
returning to the "moonlight and magnolia"
days of the 1870's.
Let there be no mistake: The Supreme
Court like any other major institution is sen
sitive to political currents. If they feel that a
hail storm of protest would greet an anti
black ruling, they will be hesitant to overturn
the lower court. But if they feel that the
black community is "asleep at the switch,"
this will provide impetus for an adverse rul
ing. Therefore, what is to be done? At
minimum, all who read this article shoald
immediately contact their charch, Ihcir
union, their social club, their NAACP
Chapter, their community group, their
whatever and strongly suggest thai they for
thwith send a mailgram to AACC granting
permission to sign our friend-of-the-court
brief sustaining the lower court's opinion.
(126 West 119 Street, New York, NY 10026
phone (212) 864-4000.) Send it soon.
TIME IS OF THE ESSENCE.
At the same time, you should be ever wat
chful to insure that what happened in Mem
phis does not reach your community.
It is certain that we do not want to be like
the Jews in Germany and wake up one morn
ing wondering how we got to a concentration
camp.
Do not be in the position of being able to
just hang your head when your children ask
you in 1990 "What were you doing when
the 13th Amendment the Constitutional
underpinning of black progress was being
dismantled?"
By Congressman Augustas F. Hawkins
Taking The Circus Out of Presidential Politics
Election-year Presidential politics being
what they are, have never been noted for
their coming to grips with the real, people
oriented, bread and butter issues.
In my remembrance, Franklin Delano
Roosevelt, campaigning in 1932 for the
Presidency at the heighth of the Great
Depression, is the only President who was
willing to candidly talk about the nuts and
"baits of rue economic rtdoverf . His1 theme
was jobs and increased industrial productivi
ty. He wanted to resolve the fact that "one
third of this nation is ill clad, ill fed and ill
housed," through the implementation of
programs that would put Americans back to
work.
His programs worked.
Not always to his liking; but America did
slowly move back to economic recovery,
because Roosevelt believed that the tools of
government were to be used to help all
segments of the society not only those
with wealth and position.
We are now confronted with economic
problems as serious as those we faced in the
30's.'
But in this Presidential election-year we
have no Roosevelt-like candidates who will
clarify the nature of the issues, and talk
about their resolve.
This nation is in the midst of a serious
depression, which is at the core of our pro
blems. Addressing the manner in which this
depression will be over-come, is the only
issue worthy of Presidential debate.
The people of this country need to know
what Reagan means when he says he is for,
full employrrtent, arid what h : intends to do"
to bring about its implementation. We need
to know how he intends to use the
mechanisms of the Full Employment Act,,
and whether he will work to achieve its goals
and timetables, without trying to violate
them as President Carter did early this year,
when Carter said that "reaching the goals of
a 4 per cent unemployment rate and 3 per
cent inflation by 1983 is no longer prac
ticable." Carter changed the goals: 4 per cent
unemployment would be reached in 1985,
and 3 per cent inflation by 1988. (He also
violated the law of the land when he in
stituted these changes.)
But what I am most concerned about is the
fact that these keys to our economic salva
tion will not be addressed. Rather, what we
are going to get will be castigation by the
Reaganites of Carter's image and a like
scenario to these "none issues" by the
Carter camp.
Without a true clarification of the issues
and the sacrifices confronting the American
people, the Carter and Reagan camps each
hope that they will be the victors in this race,
owing the least in accountability and respon
sibility tq the people of this nation.
We are at the brink of an economic abyss.
The Presidential debates in this election
should tell us how each candidate intends to
save us from falling into the abyss.
We need to be challenged by the can
didates to pragmatically confront slow
economic growth, creeping inflation, in
creasing unemployment, energy shortages,
and the emasculation of viable human ser
vices to those in need by budgetary
manipulations.
For months now I have been raising these
questions, and testing the mettle of these
men who want to be President.
We've got to ask the questions now, and
demand answers now, before another do
nothing President gets elected and hides
himself in the Rose Garden of the White
House.
Coping
by Dr. Charles W. Faulkner
Ego Defense Methods
"It there It no struggle,
there it no progress. Those
who propose to lavor freedom
end yet depreciate agitation,
art men who want crops
without plowing up the ground.
They wtnt rain without thunder
and lightning. They want the
oceant mi(esllc waves without
tht awful roar of Its waters."
Frederick Douglass
Dear Dr. Faulkner:
How does one know when he is being
awkwardly defensive due to his lack of con
fidence n himself? Calvin S., Ontario.
Dear Mr. S.:
There are times when one does not realize
a conscious manner that he is being defen
sive. Most ego defense is conditioned and
occurs before a person can reason out his
behavior. It occurs before one decides how
he should react to a specific situation.
The defensive person lacks full confidence
in himself and becomes insecure and nervous
around people considered by ''him to be
superior. He might tend to become defen
sive as a means of hiding his insecurity or in
order to bring the other person "down to
size."
Some types of defense mechanisms are:
Unprecipitated and unnecessary argument;
complaining; refusal to participate in ac
tivities with the threatening person; personal
attack; anger; frustration; trembling; crying;
sickness and heart palpitations.
Following are some characteristics of ego
defense mechanisms:
1) Self-perpetuating The individual,
fearing that he will be rejected, withdraws
into lonely isolation which limits develop
ment of his ability to interact with other peo
ple; 2) Unconscious The person merely
reacts to situations without thinking but,
later, regretting his behavior;
3) Universal Everyone has insecurities
and responds defensively on threatening oc
casions; 4) Unreal The defensive person reacts
to how he thinks others feel about him rather
than how they really feel about him, which
may be quite different;
5) Stress Producing The defensive per
son tends to feel emotionally drained of
energy after an encounter that is threatening;
6) Manipulative The defensive person,
through his actions, hopes to change the
A Postal and Federal
Viewpoint
The Plight of the Postal Worker
behavior of other people in order that they
might respond favorably to him.
Defensive behavior of normal people
often elicits the required response as when
a person smiles at another in order to obtain
a smile in response. The acutely defensive
person, however, usually overdoes his acting
to the extent that it becomes obvious to
others who, in turn, refuse to respond to him
as he desires.
The acutely defensive person who has a
deeply-ingrained negative self-image is likely
to get worse before getting better simply
because he becomes trapped in his own pro
blem. He develops characteristic defensive
behavior to the exclusion of normal
behavior. Others may define his defensive
behavior as abnormal.
The average person utilizes some defen
siveness in certain situations. Often, this
behavior represents one's strong desire to
improve himself and usually motivates him
to greater success and happiness.
by Robert L. White
People love to get together and talk about how bad
the Postal Service is. Nearly everybody can tell about a
letter he or she never got, or a package that was either
not delivered or was damaged.
Hardly anyone ever mentions the 320 million pieces;
of mail that arrive on time six days a week. Or that the
Postal Service is the largest service of its kind in the
world.
Postal workers are hard working, efficient, dedicated
men and women who perform one f the most impor
tant services to the country that we have. They deserve ;
respect - not scorn. They deserve security - not threats
of paycuts and dismissals.
It is my feeling that Postal workers could do with a lot
more support from the public. Take a greater interest in
the plight of these public servants.
Absenteeism control is a highly demoralizing element
within the Postal Service. Workers who are ill are often
docked or denied their earned sick leave. Family
emergencies are treated callously by managment and
supervisors are often near tyrannical in the performance
of their duties.
: It is difficult to imagine the abuse of power within
management in the Postal Service. I have heard of a
postal employee with 3,000 hours of earned sick leave to
suffer a heart attack and be accused of taking unwar
ranted leave.
Additionally, 'jobs are being lost to the competition
created by automation. In the mailhandlers craft alone;
no new jobs are being created for those lost to
mechanization. The craft is slowly fading out through
attrition.
; The public needs to revise its attitude toward their
, jgublic servants. '