There are various forms of non-profits and/or charities, in the form of 501c3, 501c4, etc. c3’s are allowed to solicit donation and give out tax-incentives for those donations, but they cannot politically lobby. Since c4’s can politically lobby, c4’s take donations, sans tax-incentives.
Are the governmental restrictions on non-profit activities pointless?
Should a church be allowed to campaign for a candidate? They cannot (or are not supposed to) because of their non-profit status.
Assuming the IRS was abolished, “non-profits” in the legal form would disappear. But would charities continue to exist? Even without tax-incentive?
When my family gives money to charity (myself included), it is not done for tax incentives. We do it because we know there are less fortunate people out there and it is a Christian thing to do. There will always be charities. I would be willing to bet that the majority of the charity given by normal families in the U.S. (not by big time celebrities) is not done for tax incentives, it is done because it is a kind act that can help someone. That is like saying if compulsory public education was abolished, would students still attend school. Yes, because most students originally dont go because they dont want to get in trouble for not going, instead, they go there to get an education. Therefore the IRS was abolished people would still give to charity because they dont do it originally for tax incentives, they do it originally because it is a good Christian act.
Edit: P.S, I know my wording is awful, but I tried to make it as clear and concise as I could ; )
How do tax exemptions on charities work exactly? People often say in the absence of tax incentives, the rich would not donate to charity (this is nonsense), but they never actually go into why.
I believe that the very rich would still donate to charity even if the tax exemptions were gone. However, I also believe that not all celebrites do it for the right reasons. You cannot deny that when a celebrity makes a large donation to charity, he/she makes sure that everyone knows who made the donation and how much it was. I am not saying all celebrites are like this, however there are some that donate soley for the purpose of enhancing their repuatation. In my opinion, the rich are not donating for tax exemptions (they dont need more money), however, some of them are donating in order to pretty up their public image and present themselves as humanitarians for the publicity it brings.
From my understanding, registered charities, aka non-profit 501c3 or 501c4, etc… organizations, have tax exemption status, in that they do not have to pay taxes to the state or the federal government. Any other profit-making organization are required to pay X percentage of profits to the state and federal governments (which is preposterous).
The tax incentives come on the donors part, where donors area allowed to deduct Y amount from the taxes that are supposed to be paid to state and federal government.
Tax Exemption means you don’t have to pay the tax. Tax Incentives means that by putting your money in a pre-selected location, you are allowed to subtract that amount from the Taxes you owe the government.
Thanks for the clarification. I recall a while ago someone demonstrating why the socialist logic is entirely spurious, but I can’t for the life of me remember the argument… I might look it up.
The wealthy (and even not so wealthy) will give regardless, partly out of a genuine sense of duty, partly to spruce up their public image, partly for other reasons entirely.