Charities and Colleges Don't Deserve Special Treatment

Writer suggests ending tax breaks

Charities, foundations and universities may have a special place in America's civic heart. But they're really just special interest pleaders like oil companies and ethanol producers, writes The New Republic's Alec MacGillis. And lawmakers should use the fiscal cliff talks as an opportunity to junk all their tax breaks.

"These groups have as much right as any other to fight for their self-interest," MacGillis writes of charities, foundations and universities. "But we shouldn't let their good reputations prevent us from seeing them for what they are: a lobby with high-paid and highly-effective lobbyists, and without a halo."

Universities make for a particularly unsympathetic target. "The higher ed sector relies on the wealthiest donors more than other social service organizations and religious charities for its $30 billion annual harvest of contributions," MacGillis notes.

That despite rising administrative costs on campus. The Chronicle of Higher Education reported this week on "three dozen college presidents making more than $1 million (led by none other than Bob Kerrey, who pulled down more than $3 million in his last year at The New School.)"

Via The New Republic.

Should charities, foundations and universities lose their tax-exempt status?

[woodtick57]

One could, and many have, said the exact same thing about churches. No need to subsidize people's faith, huh?

[methinks]

I'll second that!

[LGRepublican]

@methinks Count me in.

[truthsayer]

@LGRepublican I'm in to. In total agreement.

[twinertia]

Couldn't agree more!

[martydotcom]

The Catholic Church owns some of the most prized real estate in the country. How would they ever be able to pay off judgements and pay real estate taxes plus continue to meddle in politics

[Wary]

Add to churches to this and I'm all for it. No more nonprofits.

[woodtick57]

My GF has worked for non-profits her entire career and she agrees with this totally. (I'm assuming you meant no tax free non-profits...)

[Wary]

@woodtick57 Correct. I also would like the tax code to no longer allow people living outside the country for six months to be tax exempt, except enlisted personnel.

[Wary]

@Wary * six months or more

[Zazziness]

I don't think we should tax non-profits. If an organization is not non-profit, then tax them.

[woodtick57]

there are non-profits that do pay taxes. there are different kins of non-profits status's, vis-a-vis the IRS....

[Zazziness]

@woodtick57 Then it's already handled, isn't it?

[woodtick57]

@Zazziness well, depends on what you mean. There are non profits that pay taxes as they are definitely political or fall outside the tax free status for some other reason.

[methinks]

If some of these non-profits can afford to pay their CEO's six or seven figures, then they can afford to pay taxes.

[Zazziness]

@methinks I dunno. My gut reaction is to agree but I've heard the arguments: if non-profits do not pay a competitive wage they wind up with the bottom of the barrel for staff. And there is some merit to that point. Their staff does pay income tax, afterall. To me, the real figure of interest is what percentage of their income goes to their goals. 10% or 90%? That's a telling figure.

[MongoAPillager]

while we are at it lets tax the homeless

[woodtick57]

Send the bill to their address....

[SavageMazx]

dang it Mongo you beat me to it.....if we are going to tax charites lets also tax pan handlers and food stamps as well.

[PoliticalSpice]

Those getting corporate grants to do corporate work should get no tha breaks or special treatment. Institutions engaged in educational functions that do not generate such grants should continue to receive the special treatment.

[Synthesis]

If they can do it without raising college tuition than sure, but If it raises tuition there's no way I could support it.

[mtkopf]

According to Bloomberg college tuition and fees have increased 1120% since 1978.
They raise tuition every time the sun rises to the east.

[Synthesis]

@mtkopf exactly why I don't want it to rise more. It'd be nice if congress made a tuition ceiling or something.

[methinks]

@mtkopf They raise college tuition in tandem with the amount of financial aid their students are receiving. It's all a joke.

[mtkopf]

@Synthesis but here's the problem is endowments. Take Baylor university for example. They are sitting on $1.018 BILLION in endowments. And that's Baylor!!! Check Wikipedia and see what MIT, the ivies and Stanford have in endowments. Its ridiculous!
And they want to call themselves non profit?

[mtkopf]

@methinks exactly! All the while sitting on billions in endowments.

[mtkopf]

Universities should definitely lose tax exempt status, especially when s football coach makes $5.4 mil/ yr at a PUBLIC university(Nick Saban Alabama, Mack Brown Texas).

[LGRepublican]

Those football programs generate MILLIONS for the universities. The BCS championship game had a payout of over $21 million. Those same football programs are the reason your golfing and rowing teams can continue to exist.

[mtkopf]

@LGRepublican I played college football at d3 level so I support sports. But, your stats just go to prove my point: d1 college sports are a big business and the universities should be taxed as such.

[jessejaymes]

Right after the churches lose theirs.

[Buzzfriendly]

Why not? I give to certain charities because it is the right thing to do for me not because of any tax advantages and half the time I forget or lose the receipts from that stuff anyway.

[Cheenoguy]

Tax charities just don't cap deductions for the actual cost of the charity. For example, the costs of food and distribution for a food pantry.
I say cap tuition for universities that receive tax free status. I would love to see university become free for useful majors, but that isn't happening. We aren't a country that is big into investing in our future.

[Dan_Tien]

Cutting support for American universities is like shooting ourselves in the foot. We already support higher education less than other countries, and the relative educational level of our graduates shows it.

[KyleMFb]

I don't think charities should unless they are endorsing politics but colleges should have to pay taxes they have plenty of money

[MaxPain]

What a novel along with at lest 200 others.

[LGRepublican]

I think the "tax exempt" status should be done away with completely. If your organization makes money and owns property, you should pay taxes just like anyone else. It shouldn't matter if your saving the whales or saving souls......

[MongoAPillager]

here are some charities that are more efficient than government http://www.mainstreet.com/article/money/inves...

[Mia]

University of california donated $1,600,000 to the obama campaign. Harvard , princeton and the other ivy league schools were right in line behind them. Doesnt sound like they are in any need of special treatment to me.

[Waynestew]

Most Ivy League schools are not publicly funded. They pay taxes already.

[NormalFlora]

Churches first. They are nothing more than Sunday Morning Musical Theater.

[twinertia]

Tax the churches, definitely (hoodoo shouldn't be given any kind of a break). Community foundations, however, DO provide tangible results, and should be allowed to operate relatively tax-free under their bylaws. Non-profits are the only entities left that'll save this country, so treat 'em right.

[UnCommonBoston]

Churches, not the Red Cross or any government agency, provided most of the aid to victims of Katrina and Sandy. Universities are having a difficult time breaking even! Government aid for even public institutions is dropping. Imagine what tuition would be without the big donations the schools count on. So instead of taxing GE, the most profitable company in the world, which gets a tax rebate, we are going to stick it to the schools and charities. Forget about the CEOs, this is the real problem with our country.

Have you noticed all the "great ideas" to raise money for the deficit? CEOs are not using non-profit donations as a big loop hole. No, they are receiving profits, not as income, but as capital gains which is taxed at 15%.

But, hey let's tighten up Medicare and the nonprofits first. We are being feed crap.

[PayThatCEO]

The Catholic Church alone could afford to rebuild every house along the Jersey Shore and not even know the money was gone. The opulence with which Catholic leaders live in is disgusting...especially while those who put money in the offering tray every week are getting poorer by the day.

Church is nothing but a legal scam.

[UnCommonBoston]

@PayThatCEO I can see why people say this, the Catholic Church is huge. Within any large group of people there are bound to be some idiots and there certainly are within my Church. However, for every fool there are many good people. The good outweighs the bad by a large margin, despite what the press will tell you. There was a CNN program called, "What the Pope Knew." The first 50 minutes proved that the Pope knew about the pedophilia problem. Very briefly, in the last ten minutes the changes the Pope made to improve how the Church dealt with these men were reported. From the promos for the news report and for most of the program, there was not even a hint that something was done.(However, do not even get me started on Cardinal Law... God gave him a chance to be a leader and he blew it and then some..)

People think they know all about the Catholic Church, but they don't. The Church doesn't advertise or even report it's charitable works. Unless you go to mass, you probably will never know.

but I have to go. I would like to share some of what I know when I have time.

[Denizen_Kate]

Tax corporations first (no more tax rebates for the likes of GE), then churches (since they can't seem to shut up on political issues), then colleges, then non-profit organizations last and least of all. IMO.

[kathyparsell]

Wean businesses off the teat, then start looking at entities that that actually give something back.