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More generally I've never understood why charity is tax free. When I or others to give money to charity that is great and I support that. But why do so many exp
by Gustomaximus 11y ago
More generally I've never understood why charity is tax free. When I or others to give money to charity that is great and I support that. But why do so many expect they can take from the governments pocket when funding a cause they believe in? Dont get me wrong, I understand 'the logic' to encourage charitable giving this is a net positive.
In my home country charities are often abused by business and individuals. Given increasing sophistication and selfishness of individuals non-profits and charities should be taxed like any other organisation. Ideally real charities would have very low tax rates anyway. They typically distribute income to causes creating expenses against income, basically turning them into very low margin and subsequently low tax business. And those that abuse this structure or hoard income can pay tax like any other business. Little bit controversial I know but I find this tax-free relationship is taken as 'its the way it is' without further thought.
- tim333 11y agoA couple of reasons: It's better for society if the rich give money to medical research and the like rather than buying yachts and jets so why not encourage it. If they taxed donations you could achieve the same effect tax wise by say Facebook spending money directly on medical research - $1bn blown on reseach is $1bn less taxable profit. But it's messy that way. The present system's cleaner.
- haberman 11y agoYou're not the only one: http://www.economist.com/node/21556570 http://www.economist.com/node/21556570
- steve19 11y agoThe simple reason, at least in democracies, is that voters want charities to be tax free. If they did not care, you can be damned sure tax-free status would be dropped. I don't think there is any more complex moral reasoning than this. I for one would never vote for a party advocating taxing donations. As to what constitutes a charity ... well that is another debate [0] [0] http://mentalfloss.com/article/18575/ikea-worlds-largest-charity http://mentalfloss.com/article/18575/ikea-worlds-largest-cha...