« BACK  |  PRINT

RS

FRONT PAGE CONTRIBUTOR

Let’s tax wealthy foundations the same way we tax wealthy individuals

By: Neil Stevens (Diary)  |  May 29th, 2012 at 08:00 PM  | 

RESIZE: AAA

Down with the 1%! End the social injustice of gross income inequality! Smash the unfair fruits of capitalist oppression, in which a wealthy few take care of well-connected allies, instead of circulating their money into the economy for the 99% to get to touch!

It’s time we started taxing wealthy foundations at the same rate we tax wealthy individuals. Gates. Ford. Getty. Kellogg. Hewlett and Packard. Moore. Mellon. Rockefeller. Soros. These are not just the 1%, but the 1% of the 1%.

Great wealth in the hands of a few is undemocratic, whether it’s directly by a person, or given over to these private corporations that serve as embodiments of boundless ego. Tax them to fund a truly charitable social safety net for all Americans.

…

No, I am not sounding like an Occupier. In fact, the Occupations aren’t making this argument at all. If they believed what they want you to believe, they should. But they don’t make this argument, because they don’t believe what they claim to.

They’d never tax the Ford Foundation, the Foundation to Promote Open Society, or the like because these foundations are, with unions, the life blood of the organized, radicalized left in America. To tax these foundations would cut into their Community Organizer paychecks, so they’ll never even propose it.

So why tax “the 1%?” It’s because it’s a tax. This was never about “the 1%” or “the 99%.” That’s merely convenient rhetoric to be used to push the idea of higher income taxes. Much higher taxation is necessary to create the large, powerful socialist state in the United States of America. They will try for it by any means necessary.

Right now it’s high incomes. Assuming they got their way, they would then move on to Old Money. That 1%, the “idle rich,” would be the new target in the form of a consumption tax, whether a VAT (with a law prohibiting publishing prices without VAT, of course), or just a national sales tax.

It’s all about growing taxation to grow the state. There is no ideological consistency beyond that to be sought. The Occupiers are a movement that believed the wrong side won the Cold War, and so they intend to create the Union of Soviet Socialist Republics here in America.

Until they get that, they will not dare raise logically consistent proposals that would harm their ability to push that greater agenda. The 1% argument is a means to the end. It must be ignored whenever the greater agenda is threatened.

Wealth inequality is not inherently bad, and even less so income inequality. Even the Occupiers admit this with their selective calls for taxation. They’re not trying to shatter concentrated wealth. They’re only trying to fund the program of a radical, socialist ideological movement.

Tags: , , ,

COMMENTS

POSTING RULES  |  LOGIN TO COMMENT  |  REGISTER TODAY
  • path

    the list should include churches.

  • http://www.hakubi.us/ Neil Stevens

    Dumb? Bigoted? Embrace the healing power of and? I can’t tell yet.

  • Melody Warbington (rwm52)

    the Tides Foundation or Justice through Music?

  • http://www.hakubi.us/ Neil Stevens

    But sure, if we’re going to tax The 1%, let’s tax ALL of The 1%.

  • http://impudent.edublogs.org/ kyle8

    within a few decades. I wouldn’t mind dissolving the Ford Foundation and a lot of others.

  • btyger

    That’s a beautiful straw man you have there.

  • 6eorge Jetson

    to send an extra 15%–the double taxation they avoid–into the IRS.

  • ss396

    It is time to distinguish between non-profit and charitable in the tax code, and perhaps to tighten the definition of charitable. Charity was the norm before the growth of the progressive state, and it still provides valuable services, both complimentary and supplementary to the state. For this cause, charitable organizations should continue to receive preferential tax treatment.

    Non-profit foundations, on the other hand, do not need to be charitable and are not required to be charitable. To the extent that they are not charitable, their income should be taxed as business income.

  • Joliphant

    “Much higher taxation is necessary to create the large, powerful socialist state in the United States of America. They will try for it by any means necessary.”

    That boat has sailed. President Reagan managed to drop a few shells on it but since then there hasn’t even been much in the way of potshots.

    The occupiers are the end result of the failed ideas they shout so loudly for more of. Unfortunately any attempt to open their eyes provokes every defense mechanism you can imagine

  • The_Gadfly

    Because that distinction is already there. Before you can register as a charitable foundation you have to register as a not-for-profit. And after you’ve registered as a not-for profit corporation you can apply for one of 33 non-profit (tax exempt) corporation types, only some of which are allowed to accept tax-exempt donations (charities). I was thinking it was only around 14 until I searched and found this reference: http://www.muridae.com/nporegulation/documents/exempt_orgs.html.

    The problem is that most of the organizations to which Neil and you are referring fall under the 501(c)3 section of the code because they are 501(c)3 educational corps which also just happens to be the most favorable section of the code. The code is written broadly enough that outside of explicit political campaigning, just about any not-for profit can be engaged in “educational” activities. In fact, were it not for RedState’s explicit candidate endorsements, it could be registered as a 501(c)3 because it is educating those who visit about certain aspects of political and ethical thought. You can try to tighten the definitions, but you’ll quickly run afoul of the First Amendment to the Constitution, or more precisely, the current judicial interpretation of it.

  • http://www.helpawhiteguy.com livefreenh

    When Obama had his Nobel Prize money donated to “his” charity, he avoided paying taxes on it (and also avoided the fact that the money was supposed to go into the US Treasury). So this million dollar check went into the coffers of a race-driven tax-exempt org instead of the place where all of my tax payments go. How is that fair to ME?

    When someone buys a bottle of Paul Newman’s popcorn or salad dressing, the profits “go to charity”. Why is Newman bragging about not paying taxes here? Why does that make us want to buy his product?

    When liberals avoid paying taxes, it is “for a good cause”.

  • http://patriotpowerplay.blogspot.com/ mirac777

    Like feeding the poor. When’s the last time you saw Soros’ Open Society give a nickel to actually help anyone. PAC’s and Socio-political operations masquerading as charities and being allowed “non-profit” status is a disgusting disservice to America. The pattern of this BS was exposed in Cailf recently, where leftists used money from a License plate fund to help the 911 families… to shore up their budget.

    Soros is the scum of the earth: http://patriotslament.com/node/653

  • bobguzzardi

    Neil Stevens has come up with an idea so brilliant that one says “this is obvious”. Of course, one says to one self “Why didn’t I think of this sooner?”

    The Plutocrats and Oligarchs are hiding in plain sight as very profitable, privileged, tax exempt, “nonprofit” billionaire trust funds for the scions of the elite.

    Although many universities fall into this category, I would start with ‘Busting the Trusts” like that great Progressive TR did. Wealth concentrated in a privileged

    “Great wealth in the hands of a few is undemocratic, whether it?s directly by a person, or given over to these private corporations that serve as embodiments of boundless ego. Tax them to fund a truly charitable social safety net for all Americans.”

    This is one of the best ideas that has come from the most excellent RedState.

    All the best, Neil Stevens, whereever you are.

  • bobguzzardi

    It would be interesting, (and disheartening) to see what these the top ten executives of these nonprofits are paid. More than minimum wage, I would think.

    Neil Stevens is onto something

  • neiman1

    Warren Buffett talks about paying higher taxes but he has avoided all tax. By gifting his stock to his foundation he has avoided paying even the 15% capital gains tax.

    His stock, and Bill Gates stock, has never been taxed. By gifting their stock to their foundation they didn’t even pay the capital gains tax they claim is too low. By gifting their stock before it was taxed the government has never received any revenue. Now the foundation sell the stock and it remains untaxed.

    We need to at least tax the gifted stock at the capital gains rate. The government would have received over $15 Billion dollars if the two men had sold the stock and given the proceeds to their foundation.

    It is hard to hear Obama talk about the Buffett rule while the man avoids even the minimum tax he claims is too low for the good of the country

  • redstateneck

    True charities do so much good on a relatively frugal budget. It is difficult to weed the good one’s from the bad. If you tax Soros’s charity then you might have to tax your local church. Is that truly the path of the genuine conservative? 1% percent income tax will take care of our national defense needs. Let’s decentralize our Federal government and let the states handle things.

  • ihateliberals

    n/t

  • ihateliberals

    I think that many people need to have a class of what taxation is who is taxed and the impact of changing the tax code for Churches and charitable organizations and the difference from Tax Exempt and Non-Profit. If this much ignorance is prevalent here is prevalent in society in general no wonder the Government gets away with so much.

  • gizmo

    33?!?!? That’s insane! Yet, within this are ones so broad that they’re basically a catch-all..

    Insane!

  • johnlong88

    The Heritage Foundation just did a wonderful series on the US Consitition and all should learn this valuable subject. They would be a great instituion to teach us of taxation, tax exempt and non- profit foundations.
    I would much prefer people start learning about the subject of Fair Tax, a different way to collect our tax, but one that does not favor anyone or anything.

  • http://www.ufcle.com/willis/willis.htm Steven Willis

    The law of tax exempt organizations is a tough subject (although, in my opinion, one of the easiest in the tax law field).

    The word “non-profit” does not appear in relation to section 501(c)(3); however, it does appear in relation to (c)(4) (a social welfare group, contributions to which are not deductible).

    The number of categories in 501(c) has varied over the past few decades, but 33 is correct (off the top of my head). Most deal with deferred compensation and have nothing to do with charity. They appear in 501 because of the complex nature of deferred compensation arrangements. One should not be scandalized by this.

    The only entities to which contributions are deductible are listed in 170(c), which includes mostly (c)(2) – essentially (but not quite) the same thing as a 501(c)(3). The other few on the list are insignificant.

    The category “charity” encompasses traditional “helping the poor,” but it also includes everything else in (c)(3): art, religion, education, science, and such.

    The problem the OP describes is with private foundations more than with public charities. I would require all 170(c) organizations to satisfy a “public charity” status (found in 509). I would also toughen the definition of “public charity.” If so, many complications would disappear: closely-held, “family charities” would be no more, we’d rid ourselves of all the PF excise taxes, and we’d clean up considerable mess in the estate and gift tax arenas. This would also likely resolve the issues of “foundations” created by the very wealthy for one purpose, which later morph into something else entirely.

    I might also eliminate section 170 entirely, which would mean no contributions are deductible. That would not likely hurt churches or traditional charities, contributions to which are in-elastic. It would, however, hurt education and the arts which would have to stand on their own without an effective government subsidy.

    But, one must, as stated by others, distinguish between “non-profit” and “tax exempt,” which are not at all the same thing; and, one must distinguish between entities which are tax exempt and entities to which contributions are deductible, which are also vastly different.

  • bruceinva

    of many foundations, long after their founder has passed on and avoided estate taxes on all the wealth stuck into the foundation, is to find a place to, ahem, “employ” family members that would otherwise be unemployable in the business that generated the original wealth. Occasional remittances to truly charitable work keep them on the right side of the Internal Revenue Code. As a CPA with over three decades of experience, I’ve seen abuses beyond belief.

    Don’t understand the Internal Revenue Code? As Jay Leno says, “well, duh, that’s why it’s a ‘Code’.”

  • richardrider

    A recent WS JOURNAL editorial discussed the Maryland state millionaires tax imposed a few years. Didn’t go well. They collected almost no additional income — in no small part because some millionaires relocated.

    So now a new Maryland bill refines “millionaire” as anyone making over $100K — the less mobile productive folks who are more likely to grin and bear it.
    http://online.wsj.com/article/SB10001424052702303448404577412711946431318.html?mod=djemEditorialPage_h#articleTabs%3Darticle

    Divide and conquer. Are we surprised?

    Doubtless the remaining Maryland true millionaires won’t come to the rescue for this group — they will chuckle ruefully, seeing it as payback.

  • richardrider

    Actually, taxing such foundations has some merit — IF the foundation has taken a different direction than the founders intended.

    Most of the major foundations were set up by people who valued hard work and the American opportunity society. Most have been taken over by left wing ideologues.

    Tax ‘em to death.

  • commonsenseobserver

    But increase the charitable givings deduction.

  • http://www.redstate.com/wp-admin/user/profile.php docfreeman

    Why are unions classified as non- taxable entities when they have so much money to spend on political issues?
    Tax Code 501(c)(5)?: 501(c)(5) organizations. I believe it is time to re-write tax rules regarding labor unions. I see no reason why labor unions should be allowed tax exempt status when they have over $1 million dollars. Non- profits like churches or Red Cross do not pay for political ads like the labor unions do. It was reported that unions spent some $400 million in the last presidential election. This fact alone tell me that unions make too much money off their members and that this over payment should be reduced by taxing them. Like Obama says the rich should pay their fair share.
    How about writing a bill that changes the tax code that if a union has assets of more than $1 million they will be taxed for the additional money at 35% just like any business.
    List of unions and their asset as of 2011
    Union: American Federation of Teachers Membership: 887,000 Assets: $115 million
    Union: International Brotherhood of Electrical Workers Membership: 685,000 Assets: $482 million
    Union: International Association of Machinists and Aerospace Workers Membership: 613,000 Assets: $147 million
    Union: United Automobile, Aerospace and Agricultural Implement Workers of America Membership: 538,000
    Assets: $1.2 billion
    Union: Laborers? International Union of North America Membership: 633,000 Assets: $134 million
    Union: American Federation of State, County & Municipal Employees Membership: 1.5 million Assets: $97 million
    Union: International Brotherhood of Teamsters Membership: 1.3 million Assets: $175 million
    Union: United Food & Commercial Workers Membership: 1.3 million Assets: $157 million
    Union: Service Employees International Union Membership: 1.8 million Assets: $187 million
    Union: National Education Association Membership: 3.2 million Assets: $216 million

  • kauaicat

    for the idle heirs of the rich. They are only taxed if the annual charitable donations are less than 6.2% of the assets. The remainder of the assets may be used for any purpose the founder of the trust has prescribed – including the “employment’ of the aforementioned heirs.

    Depending on the investment return of the foundation, the funds available for distribution to the heirs can vary. As an example, a $500 million foundation with a net 10% return would generate a $50 million return, of which $19 million would be available for the heirs. If there were 20 heirs, each could receive $950,000 per year – an extremely liveable “wage”.

    That’s how it works – wealth preservation for the heirs, and a tax benefit for the donor.

  • spook

    The occupy movement threw any and credibility they may have had when the protested corps buying politicians and their vote rather than going after the politicians who sold their vote.

  • shanecroach

    Our nation is in deep debt. It got this way because of a breakdown in the moral fiber of our economic leadership — the rich.

    The rich are defined as those who have money. It is this class that led us into the banking crisis, and from there to the Obama administration and to a number of other social ills while turning their backs on the conservative Christian base (Mitt Romney? A cultist? Really, Republicans?)

    We, the USA, the nation, as an organization, are in debt. We must repay this debt or abandon the current financial system. Either way, the people who will suffer the largest setbacks WILL BE THE RICH, which the deserve because of their debased and immoral business activities over the last two decades and, really, beyond.

  • Pingback: hier