How the Rich Reap Huge Tax Breaks From Private Nonprofits • Hacker News Board

Re: How the Rich Reap Huge Tax Breaks From Private Nonprofits

#91

Post by rout39574 » Sun, Jul 30, 2023, 1:45 PM UTC

zo1 wrote: post #59

jmyeet wrote: post #24

Private foundations are really a massive scam on the public purse so whenever you hear about the Gates Foundation and the like, remember it's just a tax dodge, nothing more. The way the rules work, a private foundation has to spend 5% of its capital on its intended purpose. Thing is, that 5% can include "administration" costs like paying salaries and benefits for the family. They really need to raise this to 10%, min…

Can someone explain how that charity foundation thing is a loophole? Who/what is avoiding taxes?

Let's say you have an investment account with millions of dollars in it. Let's say for the purpose of the example you are earning 30% a year[0]. You're accustomed to use that account to fund your travel. You convert some securities to cash to buy plane tickets to travel all over the world.

You're going to pay capital gains taxes, or just income taxes, on those conversions to liquid capital.

If instead you donate those securities to a "Charity", then the earned interest is not taxed, and you receive a tax benefit for moving the property to the charity entity. If the charity is happy for you to travel all over the world, then you're done. Same benefit accrues, tax burden becomes negligible.

What's left to determine (from our electronic armchairs) is: Does the charity do good for the nation, for the world, to an extent that it's worth forgoing the tax income? I expect that the answer is "Yes" for several of the charities we consider household names. I expect that the answer is "No" for the overwhelming majority of charities, by count or by endowment. We could start by taxing Harvard. :)

[0] Not that anything is dependable year on year, but that's the rate that university endowments made in 2021.

Re: How the Rich Reap Huge Tax Breaks From Private Nonprofits

#92

Post by brigadier132 » Sun, Jul 30, 2023, 1:45 PM UTC

camgunz wrote: post #82

brigadier132 wrote: post #43

Earlier quoted context omitted.

Can you actually give examples of competent public spending? The military is considered one of the competent parts of the US government and the amount of waste is staggering. On any given night 4000 people are sleeping on San Francisco's streets and the government can't solve that with a $636 million a year budget? The US spends more per student than any other nation and somehow we have worse educational outcomes?

I mean I think the tougher claim would be "there is no competent public spending in the US". The US across the Federal, State, and local governments alone spends a lot. It's pretty likely that some of it is competent. But separately, what does "competent" mean? Is it a measure of waste, as in we could've done what the DoD does for less? Is it a measure of useless spending, as in we shouldn't have spent money on X bec…

> because it implies that there's some entity out there that's actually good at spending money

No, this is the weird framing. As if the money has to go to some entity other than the individual that earned it. The government is taking money from individuals for their supposed benefit.

Re: How the Rich Reap Huge Tax Breaks From Private Nonprofits

#93

Post by cscurmudgeon » Sun, Jul 30, 2023, 1:46 PM UTC

nobodyandproud wrote: post #79

TacticalCoder wrote: post #71

Earlier quoted context omitted.

[flagged]

You think Soviet Union. I think Boeing and 737 Max: https://www.washingtonpost.com/investigations/how-the-faa-al...

This is safety not financial auditing though. Huge difference. Also see FDA and how it allows companies to submit data and studies.

Re: How the Rich Reap Huge Tax Breaks From Private Nonprofits

#94

Post by prepend » Sun, Jul 30, 2023, 1:46 PM UTC

afavour wrote: post #83

prepend wrote: post #76

Earlier quoted context omitted.

For me libraries vary substantially. My local library in the burbs was nice, but they decided to close every Sunday and only open from 12-5 on Saturday. And oddly, 4 libraries about 10 miles apart from each other all closed after a storm due to rain damage. Even though they are different buildings build many years apart in different styles. It seems odd they wild all have water damage. And while they are closed to th…

> should we extrapolate our experiences into universal ones? What makes you think all libraries are great like yours? I’m specifically saying we should not do that! The OP asked for examples of competent public spending. I consider my local library to be one such example. Someone else’s library being awful doesn’t make mine an invalid example of competent spending, they’re two separate things.

But then you shouldn’t extrapolate your local library spending well any more than you don’t want GP extrapolating that his local library spends poorly.

What makes you think all libraries are run as well as yours? It seems the question is “does government do well, in general, at managing money?” And having an example of your local library isn’t very helpful for predicting whether government is good or bad.

I don’t think the sentiment is “every single government in existence is horrible at managing money” and more so “in general, government is inefficient at management so is not a good investment for optimal social benefit.”

Re: How the Rich Reap Huge Tax Breaks From Private Nonprofits

#95

Post by cscurmudgeon » Sun, Jul 30, 2023, 1:47 PM UTC

nobodyandproud wrote: post #61

mycologos wrote: post #29

I know, I know, "bounties" are a fraught concept. Some people find "snitching" odious. But this is a tantalizing use case. All the author of this piece got out of their legwork was another article, but it also yielded some money for the federal government: > Two days after I emailed Finwall in April inquiring about the Xie Foundation’s purchase of the house, the foundation filed records with the California attorney g…

Another thought: What if all corporate accountants were required to be government employees? We can start with transnational companies first. Then LLCs and Incs. Disincentivize the massive fraud that we see today.

Doesn’t the govt lose large amounts of money to various fraud schemes?

https://www.nbcnews.com/news/amp/ncna1279664

May be the govt should have private sector auditors to help with that?

Re: How the Rich Reap Huge Tax Breaks From Private Nonprofits

#96

Post by brigadier132 » Sun, Jul 30, 2023, 1:48 PM UTC

afavour wrote: post #78

brigadier132 wrote: post #74

Earlier quoted context omitted.

I mean, your argument seems to be that since the government does some good we should give them complete access to our bank account

In what way is that my argument? You said: > Can you actually give examples of competent public spending? I gave you an example of competent public spending and you’ve somehow transformed that in your head into “we should give government unfettered access to our wallets”. Absurd generalisations are absurd. You’re very obviously not coming to this discussion in good faith. Feel free to argue against straw men in your…

Ok cool, you won the school house debate with the arbitrary rules. I win the actual debate that largely the government is incompetent and should not be given more money.

> You’re very obviously not coming to this discussion in good faith

I'm not but this is the second time you've stooped to questioning my credibility (which is against the rules of hackernews). For some reason you've fixated on this one phrase of "giving actual examples" when I'm obviously pointing to a wider trend of extreme waste.

Re: How the Rich Reap Huge Tax Breaks From Private Nonprofits

#97

Post by JKCalhoun » Sun, Jul 30, 2023, 1:48 PM UTC

makeitdouble wrote: post #87

tommiegannert wrote: post #65

Earlier quoted context omitted.

The big difference is that I can choose not to pay a company I don't like, and that's fine. Governments will happily make my life crap if I don't pay taxes. I dislike greed as much as the next person, but the monopolized incarceration powers of governments are not to be forgotten. For some services, collective funding makes sense, like having hospitals that can stop the spread of diseases, or forcing pooling of money…

> The big difference is that I can choose not to pay a company I don't like, and that's fine. Which phone company do you positively like ? Which internet operator are you paying because you want them to thrive ? How do you feel about Qualcomm and feeding them money ?

Which for-profit prison company are you willing to pay for?

Which private military contractors do you want your tax dollars going to?

(Comment is meant to be added on to yours, not contradict you.)

Re: How the Rich Reap Huge Tax Breaks From Private Nonprofits

#98

Post by seanp2k2 » Sun, Jul 30, 2023, 1:50 PM UTC

JKCalhoun wrote: post #90

mycologos wrote: post #36

Earlier quoted context omitted.

Cool! It looks like the SEC whistleblower program has more generous terms than 1% [1]: > The Commission is authorized by Congress to provide monetary awards to eligible individuals who come forward with high-quality original information that leads to a Commission enforcement action in which over $1,000,000 in sanctions is ordered. The range for awards is between 10% and 30% of the money collected. Submitting a tip ap…

> If you want anonymity you'll need to go through a lawyer Sounds like a business opportunity then — the company just needs a lawyer on staff. Whistleblower fields the company with a tip, company splits the SEC reward with the whistleblower, maintains anonymity.

Sadly this is the type of bounty hunting that seems quite likely to get a bounty placed on one’s own head. Making a career out of angering the rich and powerful by going after their money isn’t likely to end well.

Re: How the Rich Reap Huge Tax Breaks From Private Nonprofits

#99

Post by JacobAldridge » Sun, Jul 30, 2023, 1:51 PM UTC

nobodyandproud wrote: post #61

mycologos wrote: post #29

I know, I know, "bounties" are a fraught concept. Some people find "snitching" odious. But this is a tantalizing use case. All the author of this piece got out of their legwork was another article, but it also yielded some money for the federal government: > Two days after I emailed Finwall in April inquiring about the Xie Foundation’s purchase of the house, the foundation filed records with the California attorney g…

Another thought: What if all corporate accountants were required to be government employees? We can start with transnational companies first. Then LLCs and Incs. Disincentivize the massive fraud that we see today.

> What if all corporate accountants were required to be government employees?

So then what if a company is seeking to expand internationally, and looking at options for various reasons (including costs, which includes the tax burden). Isn’t it a conflict of interest to have a US government employee weighing in on how to improve a company at the loss of IRS revenue?

And that’s an extreme example. Any company accountant or CFO is going to be involved in regular decisions where “paying less tax” is an important outcome to consider.

Re: How the Rich Reap Huge Tax Breaks From Private Nonprofits

#100

Post by JKCalhoun » Sun, Jul 30, 2023, 1:51 PM UTC

zo1 wrote: post #44

fifticon wrote: post #27

Earlier quoted context omitted.

I see a lot of propaganda expended on convincing the voting public of this "public incompentence", almost as if someone is paying to maintain this status quo.

It's all marketing at the end of the day. But tbf, after a decade of a many public sector projects, I have first-hand seen really incompetent and wasteful actions on huge scales. Perhaps there should he a whistle blower program for reporting such things?

> incompetent and wasteful actions on huge scales

As others have pointed out, this is independent of whether we're talking about the government or private sector.

Regardless, when I see workers on a road crew standing around I don't think "wasted tax dollars", I think "money going back into the economy."

Of course in my view of a fair society it would be a preponderance of idle, wealthy money that is going back into the economy.