I don’t really follow any sort of popular sports, so it may not surprise you to hear that I know next to nothing about March Madness. Well, I knew next to nothing about it. Thanks to PBS FRONTLINE I actually know quite a bit now, especially about the structural inequality of the NCAA, where everyone in the hierarchy gets paid, except for the “student athletes,” which is to say, the exact people who make the organization a profitable enterprise. The athletes do, after all, get an education, but as FRONTLINE observes, most students spend 40 or 50 hours per week involved with sports and the traveling related to their games, and some prestigious schools have a graduation rate for players that is less than one-in-four. Not a very good deal for the players. Furthermore, players have to give up their image rights, allowing the NCAA to license their likeness to video games and other intellectual properties, without paying the players a dime.
The episode is really worth watching. (Also, the segment about Ai Weiwei is also great. I didn’t watch the Manning segment, as it seemed predatory and would likely just depress me. Instead, here’s a good write-up from Glenn Greenwald about Manning’s torture.)
Also, Mother Jones has an informative article about the “poor tax” inherent in the IRS-refund-loans that tax preparers offer, most frequently in neighborhoods of lower socioeconomic status. These fees and other hidden costs add up to hundreds of percent of interest for those who elect to receive an instant refund advance.
“We recommend that you locate your office where the household income is $30,000 or less,” the Instant Tax manual counsels. Each franchisee attends a week of training sessions where “unbelievable emphasis was put on poor minorities,” according to former franchisee Habtom Ghebremichael, who recalls a trainer telling his group, “We cater to the ‘hood.” His archetypal customer, Ogbazion says, is an assistant manager at a fast-food restaurant earning $19,000 a year. “They’ve burned the banks,” he says. “They’ve bounced too many checks. They’ve mismanaged their finances.” Experience has taught him that a few amenities (a ficus tree, free coffee, TV in the reception area) go a long way in making customers feel welcome. “At the check-cashing place, they’re talking to someone behind bulletproof glass,” Ogbazion continues. “The welfare building—you can imagine what that’s like. Here, we treat them well, and they want to come back.”
The main source of their revenue is just overcharging people, however. The refund advance is used as a draw to get customers in the door, and then they are charged hundreds of dollars (out of their advance) for tax service — the same service the IRS and other organizations will provide for free. Here’s a pretty good example of the predation the author found:
One customer who bought Meister’s services early that January was Fred B. Newman, a custodian at a local hospital. A father of two, Newman anticipated a refund of around $4,000. He was behind on his electric bill and carrying a balance on a high-rate credit card. “Nothing too bad,” he said, though he wanted his money as fast as possible. Meister, unable to offer him a RAL, talked him instead into buying something called a refund anticipation check, or RAC.
It wasn’t clear why Newman would pay $42 for a RAC, which doesn’t ensure an instant refund. The RAC is meant for customers who lack bank accounts or who can’t afford to pay up front for tax preparation—it’s basically a charge for a temporary account where the IRS can deposit the refund, and from which a preparer can deduct his fees. Newman already had a checking account and a means of payment, but Meister put him down for a RAC without bothering to explain its purpose. “I can make that $42 go away if you don’t mind waiting on the IRS,” he said when Newman noticed the extra charge. He added that if Newman was worried about the price (his bill now totaled almost $400), he could simply wait six to eight weeks—the time it takes for a check to arrive when you’re filing by mail. In fact, Newman was already paying Meister an e-filing fee and thus, according to the IRS, would be getting his money no more than 15 days after filing—with or without a RAC.