From the Washington Post:
The wealthy have the better lobbyists.
The reason: "Private universities, as well as some public universities and foundations that support public universities, qualify as tax-exempt charitable organizations because they meet the requirements of IRC Section 501©(3), which includes “[c]orporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes . . .”
If enough people do not like it, just get rid of IRC Section 501 ©(3). But this will probably make those rich religious groups very mad as well.
I’ve heard people questioning why rich homeowners’ tax breaks on their mega mortgage interests are much larger than poor people’s food stamps. Ask who wrote the rules and set up the systems.
I still favor tax breaks for the good schools in this country. I can’t imagine we’d be better off without the schools and their graduates over the years, decades and centuries. In the era of fake news the more educated are the less gullible and more likely to change the systems for the better.
By the same logic, we should arbitrarily cap the size of charities that we (whoever we is) decide aren’t doing enough for the charitable causes we think are most important. I doubt most people want to go down that road.
As @prof2dad says, universities are nonprofits that spend their revenues on things that further their mission of education, including teaching and research. They’re not making shareholders wealthy. Tax them and they’ll do less teaching and research.
It’s easy to score cheap points by pointing to the size of the endowments of places like Harvard, and it happens on CC depressingly often.
Ridiculously misleading headline. Makes you think that the USGov is directly paying the “elite” schools.
“Elite universities” do a lot more than teach students. They tend to be major research institutions, with major labs and other facilities to support that research, and a well-paid elite set of teacher-scholars who devote half to two-thirds of their academic activity to research and public service; and the rest to teaching and training undergraduate and graduate students.
Much of the money that comes to those universities is from private sources (individual and corporate donors, private foundations) as well as public ones (including government agencies, the National Science Foundation, National Endowment for the Humanities, National Institutes of Health, Department of Energy, and others). Most of this money is not aimed to support instruction, especially not instruction of undergraduate students. Audit controls assure that the money received is spent on the appropriate projects and activities.
One could do an equally scathing report of other charitable institutions, like churches. Through 501(c)3 status, churches get lots of support from the federal government, using the same logic. They receive donations that are tax deductible. They also pay no taxes on the land they sit on, state and local government subsidies. In NYC the Catholic Church is either the top or the 2nd largest land owner in the city. Think about what that means in terms of lost taxes. Does that church or any other contribute proportionally to the overall good? They may have soup kitchens, but are they feeding the poor enough to offset lost local and state revenue? The Vatican seems quite full of gold and jewels and priceless art . . . . . What about churches that are less popular, like perhaps the Church of Satan? (Yes there is a First Church of Satan and it does have 501(c)3 status) or the Church of the Flying Spaghetti Monster (yes there is a church of the flying spaghetti monster) (although I’m not sure if it has 501(c)3 status, but it’s officially recognized in NYState and you can get your drivers license photo taken as a pastafarian with a sieve on your head http://www.nydailynews.com/news/national/pastafarian-wins-wear-colander-driver-license-article-1.2435024 )
But people generally support giving to churches in this way regardless of documenting measurable benefit to society, beyond personal feelings and beliefs. And there is a counter argument that religious organizations may add to the instability of society.
Unis tend to educate people, keeping them from falling into poverty or lifting them out of poverty; and work to cure cancer and other terrible diseases; and help us understand economics so that we can thrive and political science so that we can better live in peace, and create great art . … the largest “wars” that break out in unis tend to be those about sports teams on a field, usually. So maybe support for them is warranted. Just a thought.
If one uni, regardless of whether it’s a state local or an elite, gets moneys in this way, that seems to be a product individual choices. People are choosing where they want to put their funds and what they perceive is the most worthy of support, and therefore primarily a free-market mechanism, albeit one with a corridor established by the state.
Agree 100%. And the article itself is worse, and could not be more dishonest and misleading. “Hidden” in the tax code my backside. It tries to imply something that is just not true.
Yes. And every other non-profit in the world, including private clubs.
Everyone on CC has their “most aggravating topic” threads. This one is mine.
I don’t see the headline as misleading, or the article as offensive. Just a different perspective.
I don’t have any problem with university tax exempt status, but I like it when people examine things in a way that makes me think.
It (and the article) imply that elite colleges receive some secret hidden benefit at taxpayer expense, without mentioning that they receive only the benefits all tax exempt non-profits receive, and nothing more.
The author almost certainly knew this, but is trying to influence thinking against those colleges with this misinformation. This is what makes it misleading, and to me, offensive.
“Making you think” is one thing. “Making you think something that isn’t true” is quite another.