How the Rich Reap Huge Tax Breaks From Private Nonprofits

I don't think it's actually a "tax dodge" because having the money donated to a nonprofit does limit what the money can be for and to the extent salaries are paid back to family members that's getting taxed anyway (theoretically they could be shifting it to lower tax brackets but when you look at current US tax rates it's not going to make much difference anyway).

I think there's a real question of whether rich people should be able to get tax exemptions for donating massive amounts of money to nonprofits of their choice with no limit, but it's not a "scam" because Bill Gates is doing exactly the thing that the current tax code is intended to incentivize; he's not using some sort of complicated loophole to use the money for personal purposes while getting a tax exemption, he's just using it for charitable purposes that he chooses, exactly as intended.

That said, personally I don't think it necessarily makes sense to say that someone should be able to e.g. choose to donate a billion dollars of income to an art museum and not get taxed when the tax revenue from that income if it were not made deductible (even if less than a billion dollars) could be used for potentially more important uses once you factor in marginal utility, etc.

Framing it as a "scam" or "loophole" is somewhat misleading imo because it implies that rich people are somehow cheating the system, whereas in reality they are just using the system as intended, but it might actually be a bad system.

Most commenters here seem to have a false impression of the distribution of taxation. "The rich pay little taxes" is disinfo. The truth is more like "the rich pay most of the taxes."

The US has had progressive taxation since 1913. Today, taxes on the top 1% of earners comprise 40% of federal income tax revenue, top 5% comprise 60%, while the bottom 50% comprise 2% (however note income taxes are only half of federal revenue). Per CBO, the US gini coefficient falls by 0.17 (a third) when you account for taxes and transfers.

Our legislators have created tons of complexity in our tax codes which people use to reduce their tax burdens. I mainly blame congress and the electorate. Donors are only culpable for funding congressional campaigns' appeals to voters.

You’ve got it backwards, the rich should fear the masses. There’s a reason Leland Stanford moved to Palo Alto.

> it's absurd to use road maintenance as the reason why the government needs more money.

far from absurd, it's an extremely good example. The USA is filled with public infrastructure that we collectively decided to create but that we do not maintain adequately, because we choose not to spend money on it.

You say our roads suck, and to whatever extent that is true (not really interested in debating that specific point), it's because not enough is spent maintaining them.

Now of course, it's entirely possible that this situation does in fact represent the actual collective opinion of the population: yes we'll build stuff, no we will not pay (enough) to maintain it. But that has not been established.

I didn't understand the OP to have said that all people that say that are paid shills. To be sure though, people who do complain about wasteful government spending are in fact playing into the interests of the wealthy who want to keep more of their billions.

I know it sounds naive, but we are the government. Don't like what services are elected leaders are spending tax dollars on? Replace them. Bernie Sanders as you probably know requested a 10% cut in the military budget — elect more people like him if this is what you want.

> The real tax base of our society is generated by the middle and upper middle class and they will be the ones that will bear the largest brunt of tax increases.

I am much more sympathetic to people who call for, "Lower taxes for the working class!" When you include the billionaire-class as also-victims of high taxation (and they would of course disproportionately benefit from lower taxes) then it sounds to me like you're essentially carrying water for them to the detriment of society at large.

It seems when most people I hear talk about cutting government "waste" they really mean cutting out government services they disagree with — not really streamlining those services.