Politicians love to promise their constituents that if elected they will make the rich pay their fair share of taxes.
They say they will raise the income tax rate for high income earners. And this promise will generally net many votes, and maybe even a little revenue, but the problem is it won’t make the rich pay their fair share of taxes. That is, the tax rate change will not affect the truly rich, because they shift their income into foundations which pay no taxes at all.
A little history will shed light on how this works. In 1901, the daughter (Abby Aldrich Rockefeller) of Senator Nelson W. Aldrich, married John D. Rockefeller, Jr., the son of John D. Rockefeller, the founder of Standard Oil and the richest American of all time. (John D. Rockefeller) Then in 1913 the Rockefeller family created the Rockefeller Foundation. Three years after that, the same Senator Aldrich sponsored the Sixteenth Amendment to the U.S. Constitution, which created the federal income tax. (Nelson W. Aldrich)
Ordinary people have been paying income taxes ever since, but the Rockefellers had already sheltered their income from the tax in their previously created foundation.
Incidentally, Abby and John named their son, Nelson Aldrich Rockefeller, after his senator grandfather, Nelson Aldrich. He was appointed to the office of U.S. Vice President by Republican President Gerald Ford after President Richard Nixon’s resignation. Also, we know Abby and John’s grandson, John D. Rockefeller IV, as Jay Rockefeller. He was the Democratic Senator from West Virginia from 2010 to 2015. Obviously, money equals power in both of our political parties.
A foundation’s purpose is supposedly to channel donations to charities – it’s not allowed to donate to political candidates.
(The Tax Benefits of Creating a Private Foundation)
However, the charities a foundation supports are allowed to spend their money on lobbying the government, as long as their lobbying is related to their purpose, which may be quasi-political. Also, the creator of a foundation has total freedom to control the money they put in it, as long as their lawyers ensure that they follow the rules of the tax code. And of course, we all know how complex, mysterious, and ever-changing that code is.
You can make your own decision about just how above-board you think all this may be, but the bottom line is that raising the income tax rate on high income earners will never cause “the rich” to pay any more taxes. In fact, the only people affected by increasing high income tax rates are Mom and Pop store owners, family farmers, and other small businesses. They have to invest most of their income back into their businesses. That means they can’t afford to shelter their income in foundations.
And it’s also true that those are the very people who are already paying far and away more taxes than anyone else. Moreover, tax bills are forcing more and more of them to sell their small businesses to the gigantic mega-corporations, which are controlled by the super-rich. So raising taxes actually causes the super-rich to get even richer!
One way to make the rich pay their fair share of taxes is to eliminate foundations, but that would hurt the legitimate charities they support.
Perhaps a better solution is to vastly simplify the tax code, removing the numerous complicated loopholes that allow lawyers to find ways to skirt the rules intended to ensure that charities are indeed legitimate.
Could “the people” force politicians to simplify the tax code? Do you think the rich should be able to avoid taxes by donating their income into establishments they frequent, but working people have little time for, like opera houses or art museums? Or do you think only organizations that support the poor should be considered legitimate charities?
Should a foundation be allowed to support a voter registration campaign if it only targets neighborhoods that generally support a particular political party? What about an organization that lobbies government officials with regard to an issue supported by only one particular political party? And who should have the power to declare a charity as legitimate or not?
This site is for discussing how to improve our political system. It is NOT for discussing party politics or political figures. So if you have a non-partisan question or comment, feel free to leave it below.
Next post
Sources:
Abby Aldrich Rockefeller. Wikipedia. https://en.wikipedia.org/wiki/Abby_Aldrich_Rockefeller
John D. Rockefeller. Wikipedia. https://en.wikipedia.org/wiki/John_D._Rockefeller
Nelson W. Aldrich. Wikipedia. https://en.wikipedia.org/wiki/Nelson_W._Aldrich
The Tax Benefits Of Creating A Private Foundation. Forbes. https://www.forbes.com/sites/pagesnow/2019/04/08/the-tax-benefits-of-doing-the-right-thing/#5661455c3020
I have read your article carefully and I agree with you very much. So, do you allow me to do this? I want to share your article link to my website: Log in
Yes, feel free to link to my site.
Some genuinely interesting info , well written and broadly user genial.
I’ve recently started a site, the info you provide on this web site has helped me greatly. Thank you for all of your time & work. “A creative man is motivated by the desire to achieve, not by the desire to beat others.” by Ayn Rand.
Excellent website. Lots of helpful info here. I?¦m sending it to some buddies ans also sharing in delicious. And obviously, thanks on your sweat!
What’s Happening i’m new to this, I stumbled upon this I have found It positively useful and it has aided me out loads. I hope to contribute & help other users like its aided me. Good job.
Hey! Would you mind if I share your blog with my myspace group? There’s a lot of people that I think would really appreciate your content. Please let me know. Thank you
F*ckin¦ tremendous issues here. I am very satisfied to look your article. Thanks so much and i am taking a look forward to touch you. Will you kindly drop me a e-mail?
Very interesting information!Perfect just what I was looking for! “Some people don’t get it when I’m being sarcastic.” by Leonardo DiCaprio.
Thanks a lot for giving everyone a very pleasant opportunity to read critical reviews from this site. It’s usually very beneficial plus full of a good time for me and my office acquaintances to search the blog nearly thrice in a week to read the fresh stuff you have. And indeed, I’m also at all times happy with the unique points you serve. Certain 3 areas in this post are clearly the finest I have had.
Hello.This article was extremely fascinating, particularly because I was looking for thoughts on this matter last Wednesday.
I’ve been surfing online more than three hours today, yet I never found any interesting article like yours. It is pretty worth enough for me. In my opinion, if all website owners and bloggers made good content as you did, the net will be much more useful than ever before.
I don’t think the title of your article matches the content lol. Just kidding, mainly because I had some doubts after reading the article. https://www.binance.info/it/join?ref=W0BCQMF1
I believe you have mentioned some very interesting details, regards for the post.
Wow, awesome blog format! How long have you ever been running a blog for?
you make blogging look easy. The whole glance of your website
is great, as neatly as the content! You can see similar: najlepszy sklep
and here ecommerce
Very instructive and fantastic structure of articles, now that’s user friendly (:.
Wow! Thank you! I continually wanted to write on my site something like that. Can I include a fragment of your post to my site?
Thank you for your sharing. I am worried that I lack creative ideas. It is your article that makes me full of hope. Thank you. But, I have a question, can you help me?
Great post. I am facing a couple of these problems.
I like this post, enjoyed this one appreciate it for posting.