4 ms·

Tax exempt status is a form of subsidy, paid by everyone who pays taxes.

Jtsummers 10y ago
In exchange for that subsidy, the government isn't (directly) running programs like homeless shelters and food banks. Societal necessities so long as homelessness and poverty remain parts of our society. Cut the tax break, fine, but then we need the government to intervene and provide assistance for citizens.
- dragonwriter 10y ago
  > In exchange for that subsidy, the government isn't (directly) running programs like homeless shelters and food banks. Or, you know, churches. The idea that the tax subsidy is justified by the fact that subsidized charities are displacing costs that would otherwise need to be born by the government would probably be more supportable if: (1) tax subsidized charities didn't perform functions that the government is Constitutionally barred from performing (viewing the subsidy as an alternative means of performing government functions, would make subsidizing "charities" to do such barred tasks a way for government to evade its Constitutional limits), and (2) the tax subsidy were the same for all donors (e.g., a fixed proportion credit) since each dollar given would displace the same amount of government funds no matter who gives it, rather than escalating for wealthier donors.
dragonwriter 10y ago
> Tax exempt status is a form of subsidy, paid by everyone who pays taxes. Tax exempt status may or may not be for any given operation (lots wouldn't pay any, or many, taxes even if they weren't tax exempt), but tax deductibility of donations to an organization is very clearly a form of subsidy, and one which increases with the marginal income tax rate (and thus, with the income) that would be paid by that organization's donors before considering the deduction for their donations.
logfromblammo 10y ago
You are abusing the definitions of words, here. A tax is an effectively positive tax rate. A subsidy is an effectively negative tax rate. A tax rate which is effectively zero is neither strictly positive nor strictly negative, so is neither tax nor subsidy. In order to make the argument you seem to be making, you must be holding government revenues from taxes to be constant, which makes tax cuts and tax increases a zero-sum game. If someone is taxed less, someone else must be taxed more. But I do not agree with your assumption that the government seeks to keep its revenue from any one particular tax constant when considering changes to tax law, or that it must necessarily even consider the revenue impact at all. The goal in this particular case actually seems to be to influence the behavior of those who pay the tax in a particular way, and the revenue is mainly a pleasant (for them) afterthought.

In exchange for that subsidy, the government isn't (directly) running programs like homeless shelters and food banks. Societal necessities so long as homelessness and poverty remain parts of our society. Cut the tax break, fine, but then we need the government to intervene and provide assistance for citizens.

dragonwriter 10y ago
> In exchange for that subsidy, the government isn't (directly) running programs like homeless shelters and food banks. Or, you know, churches. The idea that the tax subsidy is justified by the fact that subsidized charities are displacing costs that would otherwise need to be born by the government would probably be more supportable if: (1) tax subsidized charities didn't perform functions that the government is Constitutionally barred from performing (viewing the subsidy as an alternative means of performing government functions, would make subsidizing "charities" to do such barred tasks a way for government to evade its Constitutional limits), and (2) the tax subsidy were the same for all donors (e.g., a fixed proportion credit) since each dollar given would displace the same amount of government funds no matter who gives it, rather than escalating for wealthier donors.

dragonwriter 10y ago

> Tax exempt status is a form of subsidy, paid by everyone who pays taxes. Tax exempt status may or may not be for any given operation (lots wouldn't pay any, or many, taxes even if they weren't tax exempt), but tax deductibility of donations to an organization is very clearly a form of subsidy, and one which increases with the marginal income tax rate (and thus, with the income) that would be paid by that organization's donors before considering the deduction for their donations.

logfromblammo 10y ago

You are abusing the definitions of words, here. A tax is an effectively positive tax rate. A subsidy is an effectively negative tax rate. A tax rate which is effectively zero is neither strictly positive nor strictly negative, so is neither tax nor subsidy. In order to make the argument you seem to be making, you must be holding government revenues from taxes to be constant, which makes tax cuts and tax increases a zero-sum game. If someone is taxed less, someone else must be taxed more. But I do not agree with your assumption that the government seeks to keep its revenue from any one particular tax constant when considering changes to tax law, or that it must necessarily even consider the revenue impact at all. The goal in this particular case actually seems to be to influence the behavior of those who pay the tax in a particular way, and the revenue is mainly a pleasant (for them) afterthought.