Volume 40 Number 46

August 16- August 22, 2006

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› lynn@sfbg.com
There was no better place than the Castro Theatre to watch Stanley Kubrick’s 2001: A Space Odyssey, which kicked off the 70mm Series on Aug. 11. (Future delights in store: South Pacific and Tron!) The timing wasn’t bad either: among the film’s many viscerally unsettling images (see: bludgeoned animals; HAL’s omnipresent glowing red eye; an astronaut jerkily struggling for oxygen, then floating off into deep space), one in particular for me managed to mainline a vein of depression and fear concerning where world events — and US foreign policy — are taking us, ceasefire notwithstanding. That would be the moment (melodramatic, yes, but provoking dead silence in the theater) when ape-man moves beyond territorial posturing and realizes that he has the technology to bring home dinner and brutally slaughter his neighbors.
On a less dismal note, go check out our blogs — www.sfbg.com has spawned a whopping five of them in the wake of our Web site redesign, and we’re quite enjoying our adventures in 21st-century-style online media. We’re a little creeped out to find ourselves in the company of late bloomer Mahmoud Ahmadinejad, who, we learned at press time, just posted his first entry on his own blog (a punishing 2,000-plus words in English). But we feel good about the fact that we got the jump on the Iranian president by at least a month or so.
Ahmadinejad’s first post is packed with autobiographical tidbits and railings against, yes, US foreign policy — much like our own content! But we’ve also got Kimberly Chun’s report and pics from the Bleeding Edge Festival on our music blog, Noise. In Pixel Vision you’ll find Cheryl Eddy’s musings on the fact that, per court order, Ted Kaczynski’s copy of The Elements of Style will soon be on the auction block — plus the extended mix of Eddy’s interview with Snakes on a Plane snake handler Jules Sylvester. And in the Bruce Blog, you’ll learn what happens when a national glossy business mag has the unmitigated temerity to refer to Guardian headquarters as “grungy” in the lead paragraph of its cover story. Read all about it in “Why People Get Mad at the Media,” parts one through six. SFBG

The case against the JROTC


OPINION Make no bones about it: the Junior Reserve Officer Training Corps (JROTC) is a program of the US Department of Defense. Its purpose is clear: to recruit high school students into the military. Two years ago, 59 percent of San Franciscans demonstrated their disapproval of that sort of recruiting by supporting Proposition I. It’s time for the Board of Education to follow the wishes of those voters and phase out the JROTC in favor of a nonmilitary program.
On Aug. 22, it’s very likely that the San Francisco school board will do just that. Before the board is a proposal to not only ease out the JROTC but also form a blue-ribbon panel to find an alternative.
It’s not a new idea. In the mid-1990s, a similar board proposal failed by a 4–3 vote. This time the vote will probably be reversed. Phasing out the JROTC in San Francisco should be a breeze. Two years ago, a measure to put the city on record as wanting to bring the troops home from Iraq passed by 64 percent. Since Sept. 11, hundreds of thousands of San Franciscans have protested the wars in the Middle East. There’s no other city in this country with so much antiwar activity. So what’s the problem?
It’s the kids. The JROTC has successfully organized scores of young people (mostly white and Asian) to attend school board meetings to testify about the benefits of the program. A few LGBT kids have said that the local chapter of the JROTC does not discriminate, which JROTC officials confirm. What they don’t talk about is the fact that a queer kid can’t be out (or found out) in the armed forces. Since 1994, when “Don’t Ask, Don’t Tell” was first implemented, more than 11,182 queers have received the boot. There are also beatings and harassment to contend with in the military if you’re suspected of being queer. It’s not a pretty picture.
The JROTC doesn’t tell kids that a lot of what the recruiters promise is a lie — the kids might not get the educational benefits and job training promised in all the promotional materials. As Z Magazine reported (August 2005), 57 percent of military personnel receive absolutely no educational benefits. What’s more, only 12 percent of men and 6 percent of women who have served in the military ever use job skills obtained from their service. As Lucinda Marshall noted in an Aug. 24, 2005, article on ZNet, “According to the Veterans Administration, veterans earn less, make up 1/3 of homeless men and 20% of the nation’s prison population.” Be all that you can be?
Education was never the point of the military, of course. As former secretary of defense Dick Cheney once said, “The reason to have a military is to be prepared to fight and win wars…. It’s not a social welfare agency, it’s not a jobs program.”
Let’s not sell our youth short. Or make them fodder for oil wars. Or subject them to antiqueer discrimination and hate crimes. Let’s give them all the skills they need to make their lives the best they can be. We can do that without the military. SFBG
Tom Ammiano, Mark Sanchez, and Tommi Avicolli Mecca
Tom Ammiano is a queer former school board president and current supervisor of District 9. Mark Sanchez, the only queer member of the current San Francisco Board of Education, authored the current anti-JROTC resolution. Tommi Avicolli Mecca is a queer antiwar activist who was recently honored by the American Friends Service Committee.

Shackling the tax man


› gwschulz@sfbg.com
Late last month, David Cay Johnston of the New York Times managed to get a story about IRS layoffs picked up by the San Francisco Chronicle and placed on page three. That’s no small challenge, even in one of the most politically charged cities in the nation. It was not a sexy story, neither to liberals nor to conservatives.
But the story’s timing was impeccable.
Johnston reported that the IRS was poised to lay off 157 of its 345 estate- and gift-tax attorneys working at agency offices throughout the country — a division of investigators that generates more revenue for the federal treasury by catching tax cheats than any other group of auditors, about $2,200 for every hour that they work.
Dismantling the estate tax has been among the most aggressive crusades taken up by the Republican Party and its friendliest contributors for at least the last decade. Leaked to the Times by IRS whistle-blowers, the story about the layoffs surfaced just days before Congress rejected for the fifth time since 2001 an attempt by fiscal conservatives to get rid of the estate tax. The legislation failed despite Republican control of both the House and Senate. Even tempting Democrats with the first federal minimum-wage hike in 10 years couldn’t do the trick.
So how could defending the estate tax and the right of the IRS to collect it survive two branches of the federal government dominated by a political party that holds most taxation in contempt? It’s because families awash in seemingly infinite wealth are the only ones who get hit by the tax — despite false claims made by the GOP that the estate tax kills small businesses.
California filed more estate-tax returns in 2001 than any other state in the country by a margin of thousands. The only state that came close was Florida, and California still filed around 6,000 more returns, according to the most recent IRS numbers.
In other words, the Golden State is filthy, stinking rich and more vulnerable to the estate tax than other states. GOP party leaders in Washington insist the issue will return in the form of a new bill, and the IRS is behaving as if the estate tax has already disappeared. If it does, the richest families in the United States — highly concentrated in California and the Bay Area — stand to collectively save billions of dollars.
The Bay Area contains within its sloping hills and mammoth upstart tech firms higher income levels and more general wealth than almost anywhere else in the country. In fact, the San Francisco metropolitan area is the fourth wealthiest in the nation, according to Merrill Lynch, and two tiny cities between here and Mountain View, where Google is based, have the highest per capita median income in the United States. Those two cities, Atherton and Hillsborough, have a combined population of about 17,000, and while many of these techie tycoons are young, the day will come when they die and pass millions of dollars on to their descendants. Will there be enough tax investigators available to audit those estates? Will there even be an estate tax?
Following Johnston’s revelations, a Times editorial suggested the layoffs were a politically motivated attempt by the Bush White House to circumvent the legislative process. What it can’t accomplish through Congress it can do by handcuffing the tax police.
“This is an election year issue,” said Jay Adkisson, a private sector tax lawyer from Laguna Niguel who documents egregious cases of fraud on his Web site, Quatloos! “They’re trying to appease Republican voters who were angry over the failure of Congress to do something about the estate tax.”
The story of the IRS layoffs didn’t just catch the attention of readers. Congress responded too. Twenty-three lawmakers — including, somewhat predictably, Democrat Tom Lantos of California’s 12th District — immediately fired off a letter to Bush-appointed IRS commissioner Mark Everson demanding to know if the agency could now effectively investigate estate-tax avoiders.
None but the most obscenely wealthy Americans pay even a dime in taxes when they earn an inheritance upon a death in the family. Estates aren’t hit with taxes until they reach a value of $2 million, or $4 million for a married couple. Only estates exceeding those amounts are assessed any tax, according to the Center on Budget and Policy Priorities (CBPP).
And if the family hires a savvy tax attorney or estate planner, those nontaxable values could easily rise to $10 million, according to Adkisson.
A research director at the Brookings Institution named Diane Lim Rogers opined in the Chronicle last May that because of current exemptions, about one half of one percent of dead people will actually be followed to the grave by the tax man. Besides, it’s the beneficiaries of an inheritance who pay. Despite grand claims made by Republicans that the beneficiaries of an estate will be paying half of what they’re handed in taxes, even the estates eligible for taxation see on average a 20 percent rate, according to the CBPP, which relied on the IRS for its statistics. For those who do pay estate taxes, deep discounts are available through charitable donations.
“The argument made about lots of people being ‘burdened’ by estate taxes is that they go through lots of convoluted tax-planning strategies in order to avoid the estate tax, so even if they don’t end up paying any estate tax, they are still adversely affected [burdened] by the existence of the tax,” Rogers wrote in an e-mail to the Guardian.
But even considering the cost of estate planning, Rogers said, no one would rationally spend more avoiding taxes than they would actually paying them.
Keith Schiller, a respected private sector tax attorney based in Orinda, earns princely sums teaching millionaires how to take advantage of loopholes in the federal tax code. He’s not opposed to the estate tax on principle; he just wants to simplify the way his clients pay their dues.
“I do believe the estate tax serves a social function of breaking down generational dynastic wealth,” he said in a phone interview.
Schiller said the IRS is conducting nowhere near the estate-tax audits it once did and that may be the only justification for laying off auditors. Still, the knowledge required by agency investigators to analyze and understand complex estate-tax avoidance schemes is immense. About 50 estate- and gift-tax attorneys based in Southern California and the Bay Area exclusively handle returns filed for the IRS from inside the state.
David Dean, president of the San Jose–based National Treasury Employees Union (NTEU) Local 238, said it’s not clear which offices will have layoffs. All 350 estate-tax auditors are being offered buyout deals that include their pensions plus up to $25,000, or $13,000 after taxes.
Dean and the NTEU, which represents the auditors and opposes the layoffs, insist the IRS isn’t entirely sure how much money is hidden from the agency each year through either elaborate trusts or simple refusals to file. It’s known as the “tax gap,” and three days after Johnston’s story appeared, the inspector general of the IRS, J. Russell George, told Congress that the agency’s estimated figures for delinquent estate taxes hadn’t been updated in years. His report described a self-fulfilling prophecy in which the IRS expressed no desire to update the figures because “consideration is being given to eliminating or reducing the number of people required to pay estate taxes.” The last estimate was about $8 billion, but that figure is for the most part unreliable, he testified.
But the law still exists, regardless of whether an anti–estate tax agenda eventually succeeds in Congress.
“If a law is on the books, you still have to close down on the cheaters,” said JJ MacNab, an estate planner who spent 18 years in the Bay Area working for tech clients. “If you don’t enforce a law on the books, no one’s going to have faith in the system.”
MacNab now lives in Washington and as a hobby assists people who buy into tax-avoidance schemes that turn out to be illegal. She said these days, it’s low-income earners who are likelier to be audited, a conclusion Johnston also came to in his 2003 best-seller, Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich — and Cheat Everybody Else. The book shows how the recent layoffs are a small part of a larger movement to weaken the IRS’s investigative capabilities.
And that movement begins with those who can afford to fund it. Who are they? Well, they’re not your average farmer.
Consistently during the debate over estate taxes, the GOP has co-opted the populist language that once dominated America’s agrarian communities by claiming that the “death tax” bleeds poor farming families dry. It’s a spectacular rhetorical tool, but it’s an ugly distortion.
In fact, it’s the nation’s wealthiest families who have led the charge to dismantle the estate tax, not its small farmers, according to an April report put together by two groups, Public Citizen and United for a Fair Economy. The analysis identified a handful of enormously wealthy families that stand to save more than $70 billion if their lobbying efforts succeed. And that lobbying effort, the report notes, has amounted to around $490 million in direct and indirect lobbying expenditures since 1998.
The list includes Ernest Gallo of the E & J Gallo Winery, based in Modesto, and John A. Sobrato of Sobrato Development, listed by Forbes as one of the largest commercial landlords in Silicon Valley, with a familial net worth of approximately $2 billion. The Gallo family is reportedly worth about $1 billion.
The rest of the list is in part a who’s who of America’s billionaires: Wal-Mart’s Walton family; Charles and David Koch of the nation’s largest privately held company, the Kansas-based Koch Industries (also benefactors of libertarian think tank the Cato Institute, founded in San Francisco); and the Dorrance family of the Campbell Soup Co.
Ernest Gallo’s participation in antitax measures is particularly well documented. Elected officials he has supported with contributions in the past sponsored federal legislation in the ’70s and ’80s that allowed for millions of dollars in estate-tax exemptions for the Gallo family. One bill was even dubbed by estate-tax supporters the “Gallo amendment.”
The Public Citizen report links the Gallos to anti–estate tax lobbyist Patricia Soldano and her Orange County–based Policy and Taxation Group (PTG), which has spent $4 million lobbying solely against the estate tax since 1998. While the authors are unable to pinpoint exactly how much the Gallos had given to PTG directly, both the Sobratos and the Gallos are listed as clients of the group. The Gallos have reportedly spent hundreds of thousands of their own dollars supporting individual candidates.
It’s doubtful that very many people who actually paid estate taxes last year would know how to repair a grain harvester. In 2001, Johnston of the Times famously challenged the anti–estate tax American Farm Bureau Federation and the Bush administration to find just one example of a farm estate being sold to pay the taxes on it. Johnston reported they were unable to do so.
Estate planner Schiller likened opponents of the estate tax to medieval villagers who complained of gout to prove how well nourished they were.
“People want to believe they have an estate-tax problem,” he said, “so they can feel successful.” SFBG



Aug. 15

Visual Art

“Another Best Friend Somehow”

As American icon or American spirit, Bob Dylan is constantly revived by the cultural defibrillator in large and very small ways. The group show “Another Best Friend Somehow” pairs the very-much-alive musical bard with a late poet whom critical elites and the makers of trends haven’t smiled upon as much of late: Dylan Thomas. Robert Allen Zimmerman’s namesake denials be damned – there are plentiful reasons to explore shared and distinct aspects of these two men’s lives and creations. Curators Jamie Atherton and Jeremy Lin have assembled an array of artists – including San Francisco-to-London’s Simon Evans, San Francisco’s Rebecca Miller, and New York’s Andre Razo – to do just that. (Johnny Ray Huston)

Through Oct. 7
Daily, noon-10 p.m.
Attic at Four Star Video, 1521 18th St., SF
(415) 826-2900


Dream Date

If you’re wondering what happened to twee, you’re not the only one – really, though, where did it go? Apparently to Oakland, as the girls of Dreamdate have made clear on their self-titled seven-inch. It’s fun of the most fluffy, benevolent kind, inspired by the cavemanlike Beat Happening and more obviously by Thee Headcoatees, and a sound not tapped into as much as it should be. It’s like the leaner, vegetarian picnic alternative to the beer-pounding barbeque every other East Bay garage band is hanging out at. (Michael Harkin)

With the Skyflakes, the Concubines, and Matcli
9 p.m.
Hotel Utah Saloon
500 Fourth St., SF
(415) 546-6300