Bunny Trails

[MaxPC]

Okay, It's basic math.

1 split (that's the integer value of 1) in 2000 is NOT equal to the countless, seemingly never ending, splits in Protestant and Anabaptist settings.

I'm aware of a couple dozen splits prior to the Reformation, but not the one in 2000. SSPX, maybe?

Precisely. Likewise verbal antagonism is not charitable and is even considered sin among Catholic believers.

Rants and antagonism causes dissension, a behavior clearly considered unworthy of a follower of Christ as spoken in the NT. Let us return to the thread’s topic.

[mike]

Let us return to the thread’s topic.

I ken not care less about all the joshing, but if the mods want to (ahem) split off the last couple of pages, I would enjoy it to the max. I'm all for holding the Catholics' nose to the grindstone for what medieval JayPs did to our ancestors, but this thread is about private school tuition and taxes.

[temporal1]

Let us Lettuce return to the thread’s topic.

I ken not care less about all the joshing, but if the mods want to (ahem) split off the last couple of pages, I would enjoy it to the max. I'm all for holding the Catholics' nose to the grindstone for what medieval JayPs did to our ancestors, but this thread is about private school tuition and taxes.

diamond

[Ken]

This system works great for many universities. And it works alright as a way for Mennonites to fund nonprofits.

Is this true? That it works great for many universities?

Well, not “many” as a percentage. I was thinking about those colleges or universities with large amounts of money donated to them and have large endowments, that’s what I had in mind. The biggest example of what I had in mind would be Harvard, who really would be fine without charging tuition, as long as they actually cared about being careful with their spending.

Well, OK. Harvard has an endowment worth over $50 billion. But even Harvard doesn't have free tuition. What they do is guarantee that they will meet the financial need of all students which means that students from families of lesser means generally don't pay tuition at Harvard. But I can promise you that all the affluent families with students at Harvard are paying full freight.

The median family income of Harvard students is $168,800. Meaning that half their student body comes from families earning more than that. These are not families for whom there is a pressing need for publicly subsidized free education. And yes, it would be publicly subsidized by all of our tax dollars since that free tuition would be paid out of tax-exempt endowment funds.

[Josh]

Wrong, Ken. None of us would be subsidising anything. No tax dollars would be flowing to pay for anything.

[Ken]

Wrong, Ken. None of us would be subsidising anything. No tax dollars would be flowing to pay for anything.

If 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.

[ohio jones]

Wrong, Ken. None of us would be subsidising anything. No tax dollars would be flowing to pay for anything.

If 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.

More accurately, the donation is deducted from taxable income before the taxes are assessed. It is not deducted from the taxes owed, which could perhaps be considered an indirect subsidy. A payment from the government to Harvard would be a subsidy.

Would tax rates go down if that sort of donation would no longer be tax-advantaged? I have serious doubts about that.

[Ken]

Wrong, Ken. None of us would be subsidising anything. No tax dollars would be flowing to pay for anything.

If 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.

More accurately, the donation is deducted from taxable income before the taxes are assessed. It is not deducted from the taxes owed, which could perhaps be considered an indirect subsidy. A payment from the government to Harvard would be a subsidy.

Would tax rates go down if that sort of donation would no longer be tax-advantaged? I have serious doubts about that.

It is all inter-connected. Revenues and spending are all part of the same system. And it is simply semantics to parse whether a tax deduction is a reduction in taxable income or taxes owed.

Does a revenue increase in one part of the economy lead to a reduction in tax rates elsewhere? No, of course not. At least not directly. The tax code is extremely complex and there are so many vested interests that it doesn't get modified much except about once a decade when one party controls both the White House and Congress.

But all of it matters and it is all interconnected. Otherwise we wind up in the indefensible position of arguing that: (1) tax rates don't matter, (2) government spending doesn't matter, or (3) deficits and national debt don't matter.

Every dollar you collect or don't collect through taxes affects one or more of those things. And all three of them affect all of us.

[ohio jones]

If 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.

More accurately, the donation is deducted from taxable income before the taxes are assessed. It is not deducted from the taxes owed, which could perhaps be considered an indirect subsidy. A payment from the government to Harvard would be a subsidy.

Would tax rates go down if that sort of donation would no longer be tax-advantaged? I have serious doubts about that.

It is all inter-connected. Revenues and spending are all part of the same system. And it is simply semantics to parse whether a tax deduction is a reduction in taxable income or taxes owed.

Does a revenue increase in one part of the economy lead to a reduction in tax rates elsewhere? No, of course not. At least not directly. The tax code is extremely complex and there are so many vested interests that it doesn't get modified much except about once a decade when one party controls both the White House and Congress.

But all of it matters and it is all interconnected. Otherwise we wind up in the indefensible position of arguing that: (1) tax rates don't matter, (2) government spending doesn't matter, or (3) deficits and national debt don't matter.

Every dollar you collect or don't collect through taxes affects one or more of those things. And all three of them affect all of us.

I haven't collected any dollars through taxes, but it's an intriguing possibility.

I do agree that the economy is a complex, interconnected system.

[RZehr]

Wrong, Ken. None of us would be subsidising anything. No tax dollars would be flowing to pay for anything.

If 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.

This 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.

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.