Tuesday, May 28, 2013

Close the Gap: Make Fewer "Charitable" Gifts Tax Exempt

Matthew Yglesias weighed in last week on tax-exempt giving to nonprofit organizations:
...it'd really be worth scaling this all back a great deal. A rich guy giving a gift to an elite university that mostly serves the educational needs of rich kids is not particularly worthy of a tax subsidy. That's doubly true when we all know that the "gift" is in some respects a bribe to boost the admissions prospects of his own family members. We don't have a shortage of political advocacy in the United States. God is not going to become angry at us and punish us if our churches become less splendid. Due to the progressive rate structure of the income tax, these tax deductions are very much a way of increasing the social and political clout of the rich and don't seem to inspire a ton of charity in the sense of helping poor people.
In addition to tolerating a tax code that exempts from taxation multi-million dollar gifts that uphold an elite status quo, we live in a world where the NFL--whose franchises bring in hundreds of millions in revenue each season--is considered a nonprofit. Maybe its time we tighten things up.