For the ultrawealthy, donating valuables like artwork, real estate and stocks to their own charitable foundation is an alluring way to cut their tax bills. In exchange for generous tax breaks, they are supposed to use the assets to serve the public: Art might be put on display where people can see it, or stock sold to fund programs to fight child poverty. Across the U.S., such foundations hold over $1 trillion in assets.
While I am sure many folks that are associated with our local parks foundation are doing this for the benefit of the public, because legally they have to, the real reason they are doing it is because of the massive tax breaks. While the administration and others applaud this partnership because they are assisting with building our parks, if we just made the wealthy pay their full taxes we could fully fund parks, school lunches, universal healthcare, etc., you get the picture. Instead they pull this crap;
Unlike public charities, private foundations are typically funded by a single donor or family, who retain a high degree of control long after receiving a tax break for ostensibly giving their possessions away. “This is the classic problem with private foundations: Substantial contributors can see it as their thing,” said Philip Hackney, a law professor at the University of Pittsburgh and former IRS attorney. “There’s generally not a coalition who cares, other than the family, so there’s nothing to ensure that the assets are used for a particular purpose,” he added.
Besides the frustration that most wealthy individuals don’t pay anywhere near the percentage in taxes that we do, they are also picking the projects in our PUBLIC PARKS, while plastering their names on the projects.
Were the citizens screaming for a new tennis court or ice ribbon? Never heard a peep.
So as taxpayers we are allowing the super rich to get out of paying their fair share of taxes while saddling citizens with over half the cost and operating expenses (even though the ice ribbon will have an endowment fund for operating expenses, it won’t cover maintenance, etc. and I am sure the fund is just another write-off for the donor.)
In theory, it’s illegal to fail to provide a public benefit or to make personal use of foundation assets. But the rules defining what’s in the public interest are vague, according to tax experts; for example, Congress has never defined how many hours a museum would need to be open to be considered accessible to the public. And with the IRS depleted by a decade of budget cuts, enforcement has been lax. The agency examines an average of 225 returns among the 100,000 filed by private foundations each year, according to agency statistics.
The other problem with it is that while the rest of us pay our fair share of taxes, and rely on the government to provide services to us, the rich not only get out of those taxes, they get to decide what the ‘public benefit’ should be and essentially take the money intended for taxes with no control of how it is spent, and pick the project that THEY want.
Besides the lost tax revenue, the public is being completely left out of the process while footing half the cost or more for the PUBLIC projects and decades of maintenance and operation, this is why I adamantly oppose Private/Public partnerships for our public parks. The public simply doesn’t have a say in the matter and that needs to end.
While I am all for the wealthy in town dropping some G’s for public projects, since this is a tax write off, the public should decide how that donation is spent, and not the donor.