I would suggest that the better way to look at it is to start with the premise that all people are equal citizens in this society and that when we do necessary taxation (and yes, taxes are necessary), the burden should be spread equally. So we should all pay the same rate for income tax, sales tax, property tax, etc. As should institutions as well.RZehr wrote: ↑Tue Jan 16, 2024 1:54 pmThis only makes sense if the starting premise is that all earned money is the governments, and then there is a calculation made to determine how much money the individual be permitted to have.Ken wrote: ↑Tue Jan 16, 2024 12:17 pmIf you are a wealthy billionaire and you make a donation to Harvard, that donation is subsidized because you can deduct it from the taxes that you would otherwise owe.
If Harvard invests that money in real estate, stocks, bonds, private equity, or any other form of investment, Harvard pays no taxes on the earnings, which represents additional taxpayer subsidies since Harvard still relies on public services paid for by the public despite not paying property or income taxes.
If you, as a wealthy billionaire and send your child to Harvard and and Harvard uses its private wealth (accumulated tax-free) to educate your child for free, then your child's education is being subsidized by taxpayers through the privileged tax treatment that Harvard has received through every step of the process.
Governments raise money and spend money. Giving any individual or institution special treatment or advantage on either the revenue or spending side of the equation amounts to a subsidy that the rest of the taxpayers have to make up.
It would be exactly the same thing if you are running a business. If you own a grocery store and allow certain people to take groceries without paying then you will have to raise prices for everyone else, operate at a loss, or both. The government is no different. When certain people or institutions don't pay their fair share then everyone else has to pick up the slack.
A quick bit of googling tells me that in the US, tax-deductible charitable contributions average about $500 billion per year and tax-exempt revenues by non-profits like hospitals and universities average about $2.4 trillion per year. So all combined that is nearly $3 trillion per year in income and revenues that is not being taxed and for which the rest of us has to make up every year. Either through taxes that are higher than they would otherwise need to be, or deficit spending and national debt which sucks money out of the economy, raises interest rates for all of us, and passes the burden on down to our children and grandchildren.
You are paying for those tax deductions that have made Harvard the wealthiest university in the history of the world whether you realize it or not.
Same thing applies to Sattler as well. Finny has no doubt structured his financial support to Sattler in such as fashion so as to reduce the taxes he owes to the greatest extent possible. And Sattler itself has organized itself to reduce or eliminate any taxes that would otherwise be owed.
There is nothing nefarious about this. It is the system we have set up whereby the the tax code is used to encourage charitable contributions to, and investment in private education. As opposed to direct public subsidies as happen in some other countries. Just don't be naive enough to think that it doesn't represent a public subsidy. If wealthy philanthropists and public institutions aren't getting any benefit from this system then we might as well just erase those provisions from the tax code, right? If they aren't actually DOING anything.
But if the money starts out as the individuals money, and then a calculation is made to determine how much money the individual will pay to the government (which is the system we have), then you explanation makes no sense.
But I’m pretty sure we’ve debated this matter a couple times already.
Then when you start privileging certain people or institutions by granting them special exemptions to any tax you are simply passing the burden on to others. Either directly in the form of higher taxes. Or indirectly in the form of debt that gets passed on to future generations.
If we eliminated all the tax breaks in our society: Tax exemptions for institutions like Harvard and "non-profit" hospital conglomerates, tax exemptions for the purchase of new electric vehicles, tax deductions for oil drilling, tax exemptions for moving corporations overseas, tax breaks for billionaire NFL owners to construct new billion dollar NFL stadiums, etc. etc. etc. Then the tax rates for the rest of us could be a lot lower.
, like the Biden's and their not paying taxes. Just had to interject that. Carry on.
