5 ms·

Incoherent argument. Non-profits pay sales taxes, income taxes for employee salaries, and, in many cases, property taxes. The only thing they aren't ever paying

by egh 2y ago

Incoherent argument. Non-profits pay sales taxes, income taxes for employee salaries, and, in many cases, property taxes. The only thing they aren't ever paying taxes on is profits, because... they are non-profits. They don't pay out profits to owners. Some non-profits are exempt from property taxes and other taxes (e.g. universities) and abuse this by becoming huge landowners. This should probably be reined in.

bombcar 2y ago
You can pretty closely simulate a non-profit with a for-profit enterprise with a bit of "clever accounting" as long as you're not taking profits out. Once they come out, they get taxed, as salary or distributions. What the for-profit ALSO gets taxed on is "income" but if you manufacture expenses you can keep your income low or non-existent (this is what companies do when they transfer their IP to a tax haven and then charge themselves for it).
- gamblor956 2y ago
  You've just suggested tax fraud, and the mechanism you referred to is no longer a viable method for accomplishing it...
oceanplexian 2y ago
It’s ridiculous we are trying to find more ways the government can rent-seek. Corporations are taxed on profits, they are taxed when they pay employees, the employee is taxed on their income, and the employee’s post tax dollars go to pay sales tax, the remaining money goes to businesses that pay tax, and then the whole thing repeats again. The government is a literal parasite on the economy. I am repeatedly surprised when people argue that lower taxes don’t improve the economy, it’s as obvious as water being wet or the sky being blue.
- EasyMark 2y ago
  I think it’s because most people who declare “less taxes are good for the economy” don’t want to pay taxes at all and would be willing to let infrastructure and society rot in order to make a few more dollars. There has to be an optimal level, and surely it isn’t always “less”.
  - Jach 2y ago
    Meanwhile the infrastructure is not exactly doing great in many places, and it seems doubtful that it would be doing particularly better with more taxes collected. Anyway, there's been a pretty clear trend towards not-less, even in just the last few decades (really, compare quality of services and infrastructure at revenues and debts in the 90s to now), without a clear sign that it's actually worth it or that more would make anything better. A fruitless 20 year war didn't help either.
    - Teever 2y ago
      How does infrastructure look in places like Norway and Finland? Why can those countries have what they have but America some how can't? What are they doing that America isn't?
      - asdasdsddd 2y ago
        They have a high trust society where people follow rigid norms thereby lowering the cost for infrastructure. For example, they probably don't need to clean the streets as much because people don't shit on the sidewalk.
        Teever 2y ago
        What does high trust society mean?
        Clubber 2y ago
        The citizens don't tolerate deadbeats who trash everything.
        asdasdsddd 2y ago
        Everyone has a very similar value system.
        shiroiushi 2y ago
        https://en.wikipedia.org/wiki/High-trust_and_low-trust_societies https://en.wikipedia.org/wiki/High-trust_and_low-trust_socie... "Mechanisms and institutions that are corrupted, dysfunctional, or absent in low-trust societies include respect for private property rights, a trusted civil court system, democratic voting and acceptance of electoral outcomes, and voluntary tax payment."
Dalewyn 2y ago
>They don't pay out profits to owners. And then there are damning examples like Mozilla Corporation/Foundation.[1] There are organizations that should be registered and handled as non-profits, but I also think a lot of the non-profits today are scams warranting a clean up. [1]: https://assets.mozilla.net/annualreport/2022/mozilla-fdn-990-ty22-public-disclosure.pdf https://assets.mozilla.net/annualreport/2022/mozilla-fdn-990...
- bhelkey 2y ago
  This is a sixty page document. Is there something specific you want to call attention to?
  - Dalewyn 2y ago
    1. It's a non-profit organization, see page 2. 2. The chairman received just over $6.9 million dollars in compensation, see page 8. 3. Consider the above against what I replied to earlier.
    - asdasdsddd 2y ago
      The 6.9 million is income taxed so what's the problem, it would be the exact same tax scheme if it was a for-profit business.
      - Dalewyn 2y ago
        One of the justifications argued for non-profits is they "don't pay out profits to owners". MoCo/Fo is one, particularly outlandish, example where a "non-profit" makes a substantial profit and pays it out to its owner(s).
        asdasdsddd 2y ago
        And anything paid out to owners in the form of salary is taxed. The point is that they can't pay dividends or do buybacks
jacobgkau 2y ago
> Non-profits pay sales taxes, It may vary by state, but I used to work at a private, non-profit educational institution in Missouri, and I know we didn't have to pay sales tax for our purchases. I now work for an online retail business in Colorado, and our sales team routinely waives sales tax for non-profits (from various states) with the correct documentation (usually also educational institutions, fwiw).

by egh 2y ago

bombcar 2y ago

You can pretty closely simulate a non-profit with a for-profit enterprise with a bit of "clever accounting" as long as you're not taking profits out. Once they come out, they get taxed, as salary or distributions. What the for-profit ALSO gets taxed on is "income" but if you manufacture expenses you can keep your income low or non-existent (this is what companies do when they transfer their IP to a tax haven and then charge themselves for it).

gamblor956 2y ago
You've just suggested tax fraud, and the mechanism you referred to is no longer a viable method for accomplishing it...

oceanplexian 2y ago

It’s ridiculous we are trying to find more ways the government can rent-seek. Corporations are taxed on profits, they are taxed when they pay employees, the employee is taxed on their income, and the employee’s post tax dollars go to pay sales tax, the remaining money goes to businesses that pay tax, and then the whole thing repeats again. The government is a literal parasite on the economy. I am repeatedly surprised when people argue that lower taxes don’t improve the economy, it’s as obvious as water being wet or the sky being blue.

EasyMark 2y ago
I think it’s because most people who declare “less taxes are good for the economy” don’t want to pay taxes at all and would be willing to let infrastructure and society rot in order to make a few more dollars. There has to be an optimal level, and surely it isn’t always “less”.
- Jach 2y ago
  Meanwhile the infrastructure is not exactly doing great in many places, and it seems doubtful that it would be doing particularly better with more taxes collected. Anyway, there's been a pretty clear trend towards not-less, even in just the last few decades (really, compare quality of services and infrastructure at revenues and debts in the 90s to now), without a clear sign that it's actually worth it or that more would make anything better. A fruitless 20 year war didn't help either.
  - Teever 2y ago
    How does infrastructure look in places like Norway and Finland? Why can those countries have what they have but America some how can't? What are they doing that America isn't?
    - asdasdsddd 2y ago
      They have a high trust society where people follow rigid norms thereby lowering the cost for infrastructure. For example, they probably don't need to clean the streets as much because people don't shit on the sidewalk.
      - Teever 2y ago
        What does high trust society mean?
        Clubber 2y ago
        The citizens don't tolerate deadbeats who trash everything.
        asdasdsddd 2y ago
        Everyone has a very similar value system.
        shiroiushi 2y ago
        https://en.wikipedia.org/wiki/High-trust_and_low-trust_societies https://en.wikipedia.org/wiki/High-trust_and_low-trust_socie... "Mechanisms and institutions that are corrupted, dysfunctional, or absent in low-trust societies include respect for private property rights, a trusted civil court system, democratic voting and acceptance of electoral outcomes, and voluntary tax payment."

Dalewyn 2y ago

>They don't pay out profits to owners. And then there are damning examples like Mozilla Corporation/Foundation.[1] There are organizations that should be registered and handled as non-profits, but I also think a lot of the non-profits today are scams warranting a clean up. [1]: https://assets.mozilla.net/annualreport/2022/mozilla-fdn-990-ty22-public-disclosure.pdf https://assets.mozilla.net/annualreport/2022/mozilla-fdn-990...

bhelkey 2y ago
This is a sixty page document. Is there something specific you want to call attention to?
- Dalewyn 2y ago
  1. It's a non-profit organization, see page 2. 2. The chairman received just over $6.9 million dollars in compensation, see page 8. 3. Consider the above against what I replied to earlier.
  - asdasdsddd 2y ago
    The 6.9 million is income taxed so what's the problem, it would be the exact same tax scheme if it was a for-profit business.
    - Dalewyn 2y ago
      One of the justifications argued for non-profits is they "don't pay out profits to owners". MoCo/Fo is one, particularly outlandish, example where a "non-profit" makes a substantial profit and pays it out to its owner(s).
      - asdasdsddd 2y ago
        And anything paid out to owners in the form of salary is taxed. The point is that they can't pay dividends or do buybacks

jacobgkau 2y ago

> Non-profits pay sales taxes, It may vary by state, but I used to work at a private, non-profit educational institution in Missouri, and I know we didn't have to pay sales tax for our purchases. I now work for an online retail business in Colorado, and our sales team routinely waives sales tax for non-profits (from various states) with the correct documentation (usually also educational institutions, fwiw).