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Post by robeiae on Apr 17, 2017 6:02:42 GMT -5
The justification is that they are contributing to education, scientific research, art, the poor/disabled ... things that, face it, a lot of people don't really feel the urge to promote or invest in. Things that aren't for the most part "profitable," monetarily and/or immediately. There's not likely to be financial return for an investment in an elementary school, or cancer research, or, well, anything having to do with arts, veterans, developmentally challenged kids, whatever. It's a fairly expansive justification, but regardless, it's the fundamental basis of this that doesn't make real sense, imo. SO WHAT if they are contributing to these things? Good for them (I guess). This policy--like so much of the tax code--is just a giveaway enacted for browinie points, imo. *shrug* I think it's pretty straightforward. You don't have to agree, of course. But because you disagree, it doesn't mean I haven't explained myself. Lol. You keep imagining you're going to trip me up somewhere. OF COURSE I'm against such tax deductions. I'm against almost all tax deductions, in fact. I'd think you'd be getting that drift, by now. Why should I get a tax deduction because I gave the United Way $100? It's total. bullshit. There's no reason for it. It's just--again--a giveaway. Ditto for things like the mortgage tax deduction. Of course, I realize no one is going to wipe away the tax code anytime soon. That would put too many "tax professionals" out of work. But that said, the more narrow issue here--of non-profits not paying taxes on investment gains--is one that can and should be addressed, imo. Again, everyone investing who has realized gains is in the same boat. Again, we're not talking about taxes that would drive them out of existence. It's just common sense, imo. This particular tax break defies the same.
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Post by Amadan on Apr 17, 2017 9:10:07 GMT -5
Having just read No One Would Listen by Harry Markopolis, the idea that the SEC ensures the system works has me laughing. I realize that the fact that Wall Street screws us over a thousand times more than any non-profits do by going untaxed is not, in principle, a contradiction to the argument against non-profits being untaxed (a huge wrong does not justify a smaller one). But it does seem to me that if we're looking at ways the system should be reformed, the ROI would be far, far, far greater by doing something about the dysfunctional SEC and closing loopholes for corporations than by saying "Hey, why should charities get tax breaks?"
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Post by Amadan on Apr 17, 2017 9:22:53 GMT -5
Lol. You keep imagining you're going to trip me up somewhere. OF COURSE I'm against such tax deductions. I'm against almost all tax deductions, in fact. I'd think you'd be getting that drift, by now. Why should I get a tax deduction because I gave the United Way $100? It's total. bullshit. There's no reason for it. It's just--again--a giveaway. Ditto for things like the mortgage tax deduction. Okay, let me walk you through this. Suppose I am paid $100. I get taxed on that. Fine and good. Suppose I am not paid $100. I don't get taxed on that because I do not get taxed on money I... don't have. Still with me? Now, suppose I say "Instead of giving me $100, I'd like you to take $100 from my paycheck and give it to a charity." I didn't receive that money. The charity did. Therefore, I don't get taxed for that $100. (I know - please gods tell me I'm right - that you're aware that donating $100 to a charity does not mean I get $100 off my tax bill, it just means I don't pay taxes on that $100. So it's not "free money" going from the government to the charity. I am still giving up the $100 minus the taxes I would have paid on it.) You can argue that the charity should be taxed on my $100 - i.e., that charities should not be exempt from taxes. You are apparently making that argument. I disagree, but okay. But that's entirely different from the argument that I should be taxed on money that I give away. On a pragmatic level, if you did away with tax deductions for charitable donations, charitable donations would probably be dramatically reduced. Again, you can make the libertarian argument that the government shouldn't be incentivizing anything because politicians iz stoopid and social engineering and who needs art and science and bridges anyway, but most people disagree, and generally it's been a net benefit that civilizations build things.
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Post by robeiae on Apr 17, 2017 10:01:39 GMT -5
Lol. You keep imagining you're going to trip me up somewhere. OF COURSE I'm against such tax deductions. I'm against almost all tax deductions, in fact. I'd think you'd be getting that drift, by now. Why should I get a tax deduction because I gave the United Way $100? It's total. bullshit. There's no reason for it. It's just--again--a giveaway. Ditto for things like the mortgage tax deduction. Okay, let me walk you through this. Suppose I am paid $100. I get taxed on that. Fine and good. Suppose I am not paid $100. I don't get taxed on that because I do not get taxed on money I... don't have. Still with me? Now, suppose I say "Instead of giving me $100, I'd like you to take $100 from my paycheck and give it to a charity." I didn't receive that money. The charity did. Therefore, I don't get taxed for that $100. (I know - please gods tell me I'm right - that you're aware that donating $100 to a charity does not mean I get $100 off my tax bill, it just means I don't pay taxes on that $100. So it's not "free money" going from the government to the charity. I am still giving up the $100 minus the taxes I would have paid on it.) You can argue that the charity should be taxed on my $100 - i.e., that charities should not be exempt from taxes. You are apparently making that argument. I disagree, but okay. But that's entirely different from the argument that I should be taxed on money that I give away. On a pragmatic level, if you did away with tax deductions for charitable donations, charitable donations would probably be dramatically reduced. Again, you can make the libertarian argument that the government shouldn't be incentivizing anything because politicians iz stoopid and social engineering and who needs art and science and bridges anyway, but most people disagree, and generally it's been a net benefit that civilizations build things. If you earned the money as income, you should pay taxes on it, the same way as anyone else. Doesn't matter a whit how you decide to dispose of that $100, imo. As to pragmatism, maybe charitable donations would be reduced, maybe they wouldn't. I don't really care. As to it being a "net benefit," are you just assuming or do you have proof? And fyi, my objections to tax deductions--of all sorts--don't require me to make the "politicians iz stoopid and social engineering and who needs art and science and bridges anyway" argument at all. And I'm not. Perhaps you have me confused with someone else?
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Post by robeiae on Apr 17, 2017 10:10:14 GMT -5
Having just read No One Would Listen by Harry Markopolis, the idea that the SEC ensures the system works has me laughing. I realize that the fact that Wall Street screws us over a thousand times more than any non-profits do by going untaxed is not, in principle, a contradiction to the argument against non-profits being untaxed (a huge wrong does not justify a smaller one). But it does seem to me that if we're looking at ways the system should be reformed, the ROI would be far, far, far greater by doing something about the dysfunctional SEC and closing loopholes for corporations than by saying "Hey, why should charities get tax breaks?" Lol, yes because I have a point of view on this issue--non-profits getting tax breaks--it follows that this issue is THE MOST IMPORTANT THING IN THE WORLD and I don't care about any other problems, whatsoever. If I had a list of problems that I wanted to see fixed, even with something as limited as the way the financial system functions, this particular issue wouldn't crack the top fifty or even the top hundred. But so what? That doesn't make me any less right. Your arguments as to why I'm wrong seem rather weak, since they're either flawed or--as of yet--not supported.
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Post by Amadan on Apr 17, 2017 10:42:56 GMT -5
If you earned the money as income, you should pay taxes on it, the same way as anyone else. Doesn't matter a whit how you decide to dispose of that $100, imo. The idea behind taxation is that you are benefiting from services provided by the government, and should pay a share of your earned income in proportion to the benefit you receive. One way to look at it (your way) is that if I receive $100 and give it away, I still earned it and should pay taxes on it. The other way (my way, the IRS's way, most people's way) is that if I give $100 away, I did not receive that income, or any goods or services in exchange for it. Therefore it did not benefit me, therefore it should not count towards my share of taxable income. I think your model is very simplistic. Simply doing away with all tax deductions, period, has the virtue of being easy to implement and understand and not much else. If there are tax deductions, then we can quibble over what should qualify (mortgage interest, FSAs, gifts to relatives, charitable contributions?). But I do not see the logic behind your argument other than "It's simple." If you really don't like seeing a single dollar go untaxed, then do away with 501Cs. Then any income they receive (from donations) would be taxed. If I understand you correctly, though, you are arguing for both - that I should pay tax on the money I donate to charity, and the charity should pay taxes on what I donate. In that case, the money is getting taxed twice.
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Post by robeiae on Apr 17, 2017 12:58:29 GMT -5
Most money is getting taxed at least twice. Regardless, if I buy dinner with that $100 that I already payed taxes on, I'm paying taxes on that dinner (grantes, state) and the restaurant is paying taxes on that $100, as well. Right?
You're arguing for an exception for charities, simply "because" (which is the same argument for religions/churches, fundamentally). There's lots of ways to rationalize that "because," but I think at the end of the day it's simply a function of a perceived dichotomy that I do not think really exists, especially in the current world.
You're right about the idea behind taxation though, more or less. You know, I understand the idea behind some people not paying income taxes because doing so would be a financial hardship for them. That makes sense, that's defensible, imo. But those who can afford it should pay their fair share, including orange-haired billionaires, Hollywood stars, corporations, and other organizations, all of who rake in money hand over fist. And imo, the fact that such entities spend oodles of that money on advertising, lobbying, and other endeavors--which are mostly about making (raising) money--is more than enough evidence in this regard.
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Post by Deleted on Apr 17, 2017 13:24:04 GMT -5
I'm not a tax lawyer, but if I'm right, if someone gives you a gift, unless it's pretty damn substantial, it is not taxable to the recipient as income. E.g., if Rob gave me 10K, I wouldn't pay tax on it. (Christine probably knows way more about this than I do.) I've always looked at charitable giving as a gift to the institution, not as "income" to it. Except the institution would use its gift to benefit others, whereas I'd spend Rob's generous gift to me on shoes and scotch, so there's a better reason to encourage such a gift.
It's also my understanding that the jig is up, tax-wise, if the institution is not using the money towards its mission, but is instead pocketing a profit.
As a donor (and a taxpayer), I do not mind an institution paying salaries that are competitive (as opposed to outrageous) to the people who run it, if the result is that the institution is run well rather than incompetently. (Before donating, I always check Charity Navigator.) Part of running an institution competently, I would think, is investing donations intelligently so that the institution makes the most of my gift. I'm good with them using the profits from their intelligent investing towards the mission of the institution.
Finally, the more we cut government funds for causes I care about, the more I favor my donations (and any investment proceeds from them) being used to take up the slack rather than going to the government.
ETA:
No one ever answered my question about whether funds donated to Ivy League institutions are treated differently, taxwise, than those to other schools. I genuinely do not know the answer. If so, that's wrong --State U or Little Private U should receive the same types of tax benefits as Ivy League U. If not, then the thread title is a tad click-baity.
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Post by Christine on Apr 17, 2017 17:26:26 GMT -5
Lol. You keep imagining you're going to trip me up somewhere. OF COURSE I'm against such tax deductions. I'm against almost all tax deductions, in fact. I'd think you'd be getting that drift, by now. Why should I get a tax deduction because I gave the United Way $100? It's total. bullshit. There's no reason for it. It's just--again--a giveaway. Ditto for things like the mortgage tax deduction. I am not trying to "trip you up," rob. I'm trying to see the logic of your argument and I'm just not seeing it. But now, "lol" OF COURSE you are against deductions for charitable contributions, even though when Amadan posted his two-part question in re: (1) charitable orgs not being taxed and (2) charitable donations not being tax-deductible, you specifically said "Sign me up for (1)." You did not want to "sign up" for (2). How absurd of me to not intuitively deduce that you are also against deductions for charitable donations. OF COURSE you are, even though you completely ignored that part. You can have the 1040s. Ye gods, take them. I make money on businesses, multi-state tax returns, and financial statement audits and employee benefit plan audits. 1040s are a pain in the ass and the money is shit. Bring on the postcard version. Sincerely, a tax professional. For the fourth -- fifth? -- time, THIS MAKES NO SENSE. How much more forgone tax revenue is from the contributions themselves, which are not only not taxed, but deductible by the donor? You are singling out one way that funds are raised -- through investment. You're not (or weren't--before subsequent posts) complaining about the donations themselves. You weren't complaining about nonprofits making sales of goods or services. You weren't complaining about lavish fundraisers, or fancy auctions, or televised charity events. You are complaining about investment income. Why. FOR THE LOVE OF GOD, WHY.
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Post by robeiae on Apr 17, 2017 17:27:41 GMT -5
I don't think they are. But that's not the only issue here, so I don't know what's "click-baity" about the title. There's a lot more there than just the tax treatment of the endowment funds. As I said in the first post: And the story is based on this report: www.openthebooks.com/openthebooks_oversight_report_-_ivy_league_inc/Hands up, who read it before weighing in?
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Post by robeiae on Apr 17, 2017 17:46:21 GMT -5
For the fourth -- fifth? -- time, THIS MAKES NO SENSE. Whatever, Cristine. I have no clue where you are coming from, at all. I don't know how you can't process my position. First, you said I hadn't explained myself. As I noted, that's nonsense. My position on taxing investment gains is crystal clear: everyone should be in the same boat, play be the same rules, because it's in everyone's interest--who is investing monies--that the system work properly. You can disagree, but telling me that I haven't explained myself or that this "makes no sense" indicates to me that I'm spinning my wheels on this issue. And it's boring. As to the other stuff, we're getting far afield from the central issue. We can go other places, of course, but my philosophical position on some general ideas is not always going to mesh with my position on a specific policy/issue. If you think the above "makes no sense," I'm hesitant to go anywhere else, because frankly I don't want another back and fort like this one, where I lay out a clear position, then have to respond to the same basic complaint from you, over and over again, about how I somehow haven't done what I just did. Again, boring.
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Post by Christine on Apr 17, 2017 17:46:46 GMT -5
Most money is getting taxed at least twice. Regardless, if I buy dinner with that $100 that I already payed taxes on, I'm paying taxes on that dinner (grantes, state) and the restaurant is paying taxes on that $100, as well. Right? Wrong. The restaurant pays tax on its profit, not revenue. So, your $100 and everyone else's $100, minus food costs, minus labor, minus supplies, minus rent. Basically, the amount that the owner of the restaurant gets to take home, when all is said and done. Net income. Profit. What is the net income, or profit, of a nonprofit? There. Is. None. It goes to costs, all of it, assuming they are doing it properly.
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Post by Deleted on Apr 17, 2017 17:56:28 GMT -5
I don't think they are. But that's not the only issue here, so I don't know what's "click-baity" about the title. There's a lot more there than just the tax treatment of the endowment funds. As I said in the first post: And the story is based on this report: www.openthebooks.com/openthebooks_oversight_report_-_ivy_league_inc/Hands up, who read it before weighing in? It's click-baity-ish, IMO, because it focuses on on Teh Evil Ivies like they get some extraordinary privileged treatment other schools don't get. As far as this thread goes, that hasn't been shown. State schools spend on lobbying, too. http ://www.taxpayer.net/media-center/article/new-york-colleges-universities-spend-millions-annually-lobbying-washington-
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Post by Christine on Apr 17, 2017 18:06:35 GMT -5
I'm not a tax lawyer, but if I'm right, if someone gives you a gift, unless it's pretty damn substantial, it is not taxable to the recipient as income. E.g., if Rob gave me 10K, I wouldn't pay tax on it. (Christine probably knows way more about this than I do.) I've always looked at charitable giving as a gift to the institution, not as "income" to it. Except the institution would use its gift to benefit others, whereas I'd spend Rob's generous gift to me on shoes and scotch, so there's a better reason to encourage such a gift. It's also my understanding that the jig is up, tax-wise, if the institution is not using the money towards its mission, but is instead pocketing a profit. All correct. If the gift-giver gives more than $14k per year (per person), they file a gift tax return to report the excess, which goes against their lifetime exemption ($5 million-something). If the gift-giver exceeds their lifetime exemption, they pay tax -- not the recipient. It's tied in with the estate tax rules. This is how I feel as well. This is how I feel as well, as well.
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Post by Christine on Apr 17, 2017 18:14:00 GMT -5
For the fourth -- fifth? -- time, THIS MAKES NO SENSE. Whatever, Cristine. I have no clue where you are coming from, at all. I don't know how you can't process my position. First, you said I hadn't explained myself. As I noted, that's nonsense. My position on taxing investment gains is crystal clear: everyone should be in the same boat, play be the same rules, because it's in everyone's interest--who is investing monies--that the system work properly. You can disagree, but telling me that I haven't explained myself or that this "makes no sense" indicates to me that I'm spinning my wheels on this issue. And it's boring. As to the other stuff, we're getting far afield from the central issue. We can go other places, of course, but my philosophical position on some general ideas is not always going to mesh with my position on a specific policy/issue. If you think the above "makes no sense," I'm hesitant to go anywhere else, because frankly I don't want another back and fort like this one, where I lay out a clear position, then have to respond to the same basic complaint from you, over and over again, about how I somehow haven't done what I just did. Again, boring. I think this is a really dickish post. You can just not respond if you get bored. Ignoring me would be better than all that bullshit you just posted. ETA: And upon further reflection of your "hesitancy" to "go anywhere else".... nothing I posted, which you won't respond to, is "far afield from the central issue." You know, the one you keep repeating, about how nonprofits shouldn't be allowed to invest funds without paying tax on the gains. You've brought the thread back to that very topic more than once. It was arguably the main point your OP, and you continue to repeat it: investment gain is some special sort of gain, a gain that should be taxed. You continue to fail to understand what "gain" means from a tax standpoint. Furthermore, the idea that you've stated your position, implying no one should challenge it or to continue to challenge it based on its lack of logic, is like those who claim their opinion is as good as fact. I have given you fact after fact as to what net income and profit mean from a tax standpoint, and you have not addressed those points. You have lol'd and moved the goalposts and now you claim that your position is "crystal clear" and you're "spinning your wheels." I'll grant you, your position has become crystal clear to me: it's clearly lacking in logic and consistency, you're not willing to even consider that it is, and you've resorted to claiming you feel hesitant to engage further, and also you're bored. That's some fucked up shit right there. I have not, and would not, challenge the logic of a position that claimed nonprofits should be taxed. That is a logical, consistent position. One I disagree with, but nevertheless, a valid position. To single out investment gains, as you have done repeatedly, is both an illogical and an inconsistent position.
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