Should we rethink the "non-profit" tax status?

Should we rethink the "non-profit" tax status? Should we consider completely eliminating the "non-profit" tax status? Charities, churches, everybody, no exceptions.

1. Yes, it no longer serves a purpose other than a tax dodge.
2. Some, as some work is still good and other work shouldn't qualify.
3. No, there's too much worthy work being done and it should be encouraged.
4. Other (please elaborate)

Well, certainly no as to religious organizations (it would be a back door way to oppress their 1st Amendment freedoms) and charities and civic organizations. If you want to remove the tax exempt status for political stuff and the NFL, that is fine with me.

Lately, I'm thinking yes, get rid of non profit tax exemption. Preachers and Salvation Army CEOs are raking it in, and don't even get me started on hospitals.

radcen said:

Should we rethink the "non-profit" tax status? Should we consider completely eliminating the "non-profit" tax status? Charities, churches, everybody, no exceptions.

1. Yes, it no longer serves a purpose other than a tax dodge.
2. Some, as some work is still good and other work shouldn't qualify.
3. No, there's too much worthy work being done and it should be encouraged.
4. Other (please elaborate)

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I don't think anybody should be special. A church is a business just like any other, as the local ones have full time staff, and the CEO even has a big shiny golden palace. Everyone should pay taxes equally or nobody should.

KevinKohler said:

Lately, I'm thinking yes, get rid of non profit tax exemption. Preachers and Salvation Army CEOs are raking it in, and don't even get me started on hospitals.

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I believe most ministers do pay taxes, if for no other reason, so they can draw social security and medicare when they retire.

This is a tricky one. I am going to have to say, no. At least as far as complete elimination. If you take away that status from Churches and other religious organizations than you are actually going to allow for the Church and State to join hands. Meaning, you'll create a political organization of the Catholic Church which makes up roughly 25% of this country, do you really want that? That's just one example.

Another, is why should charitable NPO's pay tax? Aren't they, they being you know, charities, taking on a burden which is better left out of the government's hands? Providing welfare and assistance? Now, I understand that CEO's of these organizations can rake in a pretty hefty buck but they aren't exempt from paying income tax on those salaries. So I do agree that the justification for those salaries does lie in the competitiveness of the market. If the "best and brightest" (and I am being a tinge sarcastic here) have no monetary incentive to use their powers for good instead of evil than they will always choose evil. At least until their bank accounts are swollen to the point where money is irrelevant.

Also, let's look at the NPO business model. Let's use Mozilla's Firefox as an example. It's an NPO, but what is it really? A facilitator of business. As a company it reaps no profit in the traditional sense but what it does do is provide an active and engaged forum for other businesses to thrive. Is using its own resources and expanding on those to facilitate others to build new businesses a spoke in the wheel of wealth creation? Something the government could, or rather I say should never do? I believe so.

Keeping NPO's tax exempt just for the reasons I described above should be more than enough justification for their existence and every pro-free market/ limited government individual (this means you libertarians and conservatives) should want to not only allow them to keep their status but encourage more organizations to seek it.

The 501(c)(4) designation needs to be overhauled or eliminated.

501(c)(3)s are fine, as they are prohibited from political activity completely.

That why some churches are under scrutiny. Is it ok to use tax free money to pay for bus trips to the polls, for instance. Even non partisan its still a gray area.

But the "social welfare" groups are mostly just fronts for anonymous campaign invesments at this time.

This is a fine poll, but if you think this has anything to do with the current issue before Washington, you are mistaken. The issue at hand had little to do with "non-profit or not for profit" status.

The groups in question were not seeking 501(c)(4) status to be "non-profit", they were seeking it, in contrast to a 527 group (which is a tax exempt political group), so they could raise unlimited money from anonymous donors and lobby to their hearts content. I think the pertinent question would be should 501(c)(4)'s be reigned in (open donor lists, no lobbying, limit contributions or no political activity).

501(c)4 vs 501(c)3 vs 527

Fisher said:

Well, certainly no as to religious organizations (it would be a back door way to oppress their 1st Amendment freedoms) and charities and civic organizations. If you want to remove the tax exempt status for political stuff and the NFL, that is fine with me.

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What first amendment freedoms? The purpose was to separate church and state, to keep the state from interfering with the church and to keep the church from interfering with the state. However, tons of churches openly advocate political positions, thus violating their tax-exempt status. Those people need to lose their status immediately.

radcen said:

Should we rethink the "non-profit" tax status? Should we consider completely eliminating the "non-profit" tax status? Charities, churches, everybody, no exceptions.

1. Yes, it no longer serves a purpose other than a tax dodge.
2. Some, as some work is still good and other work shouldn't qualify.
3. No, there's too much worthy work being done and it should be encouraged.
4. Other (please elaborate)

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We shouldn't rethink it as much as the government needs to enforce the "(almost) no political activity" requirement on tax exempt non-profits.

If people want to use their non-profit to advance political causes, they should not be tax exempt.

ThePlayDrive said:

We shouldn't rethink it as much as the government needs to enforce the "(almost) no political activity" requirement on tax exempt non-profits.

If people want to use their non-profit to advance political causes, they should not be tax exempt.

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Agreed. I think it would be easier if we just eliminated all tax exemptions except for registered charities and they are only tax exempt on the money that goes directly toward charitable causes. Any overhead, any administration costs, those are not tax exempt, whether you're a church or a national charity. Simplify the rules and eliminate the loopholes.

Fisher said:

Well, certainly no as to religious organizations (it would be a back door way to oppress their 1st Amendment freedoms) and charities and civic organizations. If you want to remove the tax exempt status for political stuff and the NFL, that is fine with me.

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Not sure how paying taxes oppresses 1st Amendment freedoms.

Cephus said:

What first amendment freedoms? The purpose was to separate church and state, to keep the state from interfering with the church and to keep the church from interfering with the state. However, tons of churches openly advocate political positions, thus violating their tax-exempt status. Those people need to lose their status immediately.

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They do indeed, though they tread a fine line, and are restrained somewhat. But, as has been said, if they did begin paying taxes then they gain full and unfettered access... with open lobbysists, etc., and everything that goes with it. You have to ask yourself: Is that really what you want?

Cephus said:

What first amendment freedoms? The purpose was to separate church and state, to keep the state from interfering with the church and to keep the church from interfering with the state. However, tons of churches openly advocate political positions, thus violating their tax-exempt status. Those people need to lose their status immediately.

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Well you answered your own question. That you want to use taxes to shut up churches is exactly why they are protected in the first amendment and why they are tax exempt.

radcen said:

Not sure how paying taxes oppresses 1st Amendment freedoms.

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Because taxes are the way a government rules over churches. You do realize that our country was founded by tax evaders don't you?

Fisher said:

Well you answered your own question. That you want to use taxes to shut up churches is exactly why they are protected in the first amendment and why they are tax exempt.

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I'm wondering why no one is discussing how the 16th amendment contributes to many of the disagreements the country finds itself fighting over today. The question would be moot without it...

I'm no longer a religious person, so perhaps I'm biased here, but I've always felt that it's not truly charity or religious alms if you're getting a tax benefit for giving. Giving should be from the heart, not because you get x percentage back on your tax return. In addition, by making churches and charities slaves to the tax codes, you make them spend money they normally would target to good deeds on tax receipts and tax code approved advertising.

I admit I'm not a big giver - I'm not in the financial position to be so - but when I do give, I don't claim it on my tax returns. Perhaps if I had millions to give I'd think differently.

radcen said:

They do indeed, though they tread a fine line, and are restrained somewhat. But, as has been said, if they did begin paying taxes then they gain full and unfettered access... with open lobbysists, etc., and everything that goes with it. You have to ask yourself: Is that really what you want?

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They've already got that! There are thousands and thousands of churches out there who openly violate the "no political advocacy" rules and thumb their nose at the IRS and the American people and nothing is ever done about it. The reality is, there was a point in time where there was a single position within the IRS that could examine and revoke religious tax exemption and the IRS eliminated the position. Now, you can't take away their tax exemption no matter what they do.

radcen said:

Should we rethink the "non-profit" tax status? Should we consider completely eliminating the "non-profit" tax status? Charities, churches, everybody, no exceptions.

1. Yes, it no longer serves a purpose other than a tax dodge.
2. Some, as some work is still good and other work shouldn't qualify.
3. No, there's too much worthy work being done and it should be encouraged.
4. Other (please elaborate)

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We need to revamp the entire tax code. It needs to be looked at in depth, but I hate to say I don't think that will happen.

Fisher said:

Because taxes are the way a government rules over churches.

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Yes, but... the flip side is that paying taxes buys full unfettered access. Many people who advocate ending NP status for churches don't understand the full depth of what that really means.

Fisher said:

Well you answered your own question. That you want to use taxes to shut up churches is exactly why they are protected in the first amendment and why they are tax exempt.

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It was a desire to keep the churches and the state wholly separate that was the initial reason not to pay taxes, plus the fact that churches often did a lot of charitable work so they were killing two birds with one stone. That's just not the case today. Nobody is stopping churches from speaking freely, but look at all of the preachers who are on TV, speaking openly about political causes, yet I bet their churches are paying no taxes, even though it's a clear violation of the tax code to do what they do.

radcen said:

Yes, but... the flip side is that paying taxes buys full unfettered access. Many people who advocate ending NP status for churches don't understand the full depth of what that really means.

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They already have unfettered access! Do you think there aren't religious lobbyist groups in Washington DC right this minute?

Cephus said:

They already have unfettered access! Do you think there aren't religious lobbyist groups in Washington DC right this minute?

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You don't understand the definition of "unfettered".

I don't want to see donations lose their deductibility status to the person giving the money. But I do want to see the requirement that the receiving institution uses all their income for the actual "good deeds" instead of paying the owners generous salaries.

The majority of non-profits are very profitable - for their owners. That's wrong.

AlabamaPaul said:

I'm wondering why no one is discussing how the 16th amendment contributes to many of the disagreements the country finds itself fighting over today. The question would be moot without it...

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Well, the short answer is that the Constitution does not define what income is. Congress via the IRS does. Now, I am interested to see if Article I, Section 9, Clause 4 "No Capitation, or other direct, Tax shall be laid, unless in proportion to the Census or Enumeration herein before directed to be taken" gets litigated in relation to Obamacare in 2014-2015.

radcen said:

Yes, but... the flip side is that paying taxes buys full unfettered access. Many people who advocate ending NP status for churches don't understand the full depth of what that really means.

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I understand that. The Catholic Church will take down the democrats and the Baptist churches will move the GOP to the right of Satan if that happens, but that is not the reason we should keep it the way it is--we should do it because of the Constitution, not the political ramifications.