“[W]hy shouldn’t tax be collected before the money is given away?”
After describing several tax benefits of which those who create private charitable foundations can take advantage, conservative economics commentator Stephen Moore writes in a November 23, 2017, Wall Street Journal op-ed about philanthropy that “Congress should stop ignoring this tax-avoidance scheme” and not “let the rich and politically powerful use private foundations to escape taxation.
“This tax favoritism might be defensible to promote genuine philanthropic activities,” according to Moore in “George Soros’s $18 Billion Tax Shelter.” He cites the Bill and Melinda Gates’ and David Koch’s funding of efforts to fight cancer and malaria and help victims of hurricanes and earthquakes.
“But others,” including George Soros and Michael Bloomberg, “have turned private foundations into massive de facto lobbying operations for bigger government and liberal causes like higher minimum wages, gun control, universal health care, and a carbon tax,” Moore continues. He calls this “weaponized philanthropy.”
“[B]illions go to groups on the right, too, from Mr. Koch and others,” Moore readily acknowledges. “But regardless of ideology, why shouldn’t tax be collected before the money is given away?”
Some specific, simple solutions
He floats some specific reform proposals. “One simple solution would be for Congress to apply the capital-gains tax to assets of more than $1 million before they are transferred to a charity,” he writes, for example. “Alternatively (or perhaps in addition) Congress could cap deductions for any given household to $250,000 a year.”
Moore insists he’s not making “an argument against charity. But selfless and effective giving is not motivated by tax breaks. Two-thirds of Americans don’t itemize their deductions, yet millions give until it hurts.” he continues in the 2017 article.
“The question is whether a tax code that encourages dynastic family foundations is good for America,” he concludes. “If Congress stopped letting billionaires pour money tax free into the foundation-industrial complex, it would go a long way toward lowering rates and making the tax code fairer for everyone. This would help the economy grow faster, which is the best way to help those in need.”
