Uncategorized — November 25, 2016 at 5:51 pm

Dick and Betsy DeVos avoided paying school taxes on summer home


Incoming Secretary of Education Betsy DeVos doesn’t just want to expand school choice, provide (unconstitutional) school vouchers so parents can use state tax dollars to send their children to private and religious schools, and privatize our public schools. She’d rather not pay school taxes at all, and was nabbed in a tax dragnet by the state of Michigan for trying to avoid paying her fair share of taxes on one of the couple’s vacation homes in 2013.

[CC image credit: Keith A. Almli | Wikimedia Commons]
According to an August 2016 story in the Detroit News, Amway heir Dick DeVos and his wife Betsy were found to be in violation of the state’s “principal residence exemption” and ordered by the state of Michigan to pay more taxes following a 2013 state audit.

As reported by The News, “The audits target properties that claim a 100 percent principal residence exemption. The tax break saves property owners from paying school district taxes up to 18 mills.” In the case of the DeVos’, the couple had claimed their $7.8 million compound in Ada Township as a “principal residence,” but “the state denied part of the tax break for that year because the property was used for another purpose, such as a business or rental”.

The DeVos’ 22,000 square foot compound sits on 100 acres of lakefront property near Grand Rapids. According to a September 2016 feature on the family’s new digs, “Their three-story vacation home sets a new standard for size and grandeur among the other million-dollar-plus mansions that line Lake Macatawa, a popular spot with access to Lake Michigan. The stone and shingle house has 22,000 square feet of space. But if that’s not enough room, there’s a 6,200-square-foot guest house, plus a large infinity pool with a 700-square-foot pool house and three garages.” The complex includes a “17,000-square-foot home, 12,000-square-foot tennis club and a convention center.”

The couple does have their defenders. “It seems unfair to dun people who have, in many instances, worked hard to obtain that second home or cottage,” said Michael LaFaive, director of fiscal policy for the Mackinac Center for Public Policy. “I don’t think many of them were born with silver spoons in their mouths.” Ms. DeVos and her husband have been major financial supporters of the Mackinac Center over the years; “Between 1998 and 2011, Mackinac received $560,000 from four DeVos foundations.”

In fact, the DeVos’ connections to the Mackinac Center run long and deep:

Who funds Mackinac? In tax records obtained by Kroll, two big names stand out: the Charles G. Koch Foundation and the Dick and Betsy DeVos Foundation. Charles G. Koch is, of course, one half of the influential Koch Brothers. And it’s no surprise that the Koch-backed Americans for Prosperity (AFP) had a major presence rallying support for the bills in Lansing this week.

But among Michigan power brokers, DeVos might well be the bigger name. Dick DeVos is the son of Richard DeVos, the founder of Amway. In 2006, after achieving success in the corporate world, DeVos the younger ran for governor of Michigan as a Republican. He lost—by a rather decisive 14%—to Democrat Jennifer Granholm.

But tax officials defended the dragnet, and the proceeds returned to the state’s coffers as a result of their investigations. “It’s partly about the integrity of the tax-collection system itself, but it is a revenue generator that collects money the school aid fund should have gotten,” said Larry Steckelberg, administrator of the Treasury Department’s property services division, which oversees the audits. “The most important thing is sending a signal that the integrity of the system is important and you should follow the rules.”

Since 2012, the audits have generated $85 million in potential revenue for the state school aid fund plus interest.

Ms. DeVos most likely won’t even notice the additional taxes she and her husband now have to pay, and doesn’t seem terribly concerned when it comes to accusations of financial improprieties:

“I have decided to stop taking offense,” she wrote, “at the suggestion that we are buying influence. Now I simply concede the point. They are right. We do expect something in return. We expect to foster a conservative governing philosophy consisting of limited government and respect for traditional American virtues. We expect a return on our investment.”

“People like us,” she added archly, “must surely be stopped.”

Well, yes and no, Betsy: we’d like to see you start paying your fair share of school taxes on your properties, instead of using your family’s enormous wealth to hire lawyers to find loopholes–legal and otherwise–to avoid doing so.

But we’d love to see your appointment as Secretary of Education stopped dead in its tracks.

And that’s probably the only education policy issue we agree on, Betsy: that “people like you must surely be stopped.”