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How the Mormons Make Money

Charities have many negative consequences.
One of those is that they are used by some people to avoid paying a fair share of taxes.
I like fairness.

I do not think that taxing things makes things better.
If I were King, there would be less government, and less taxes, and a simpler tax system.
However, I do not think that there should be no government.

I do not think that there should be people accumulating great wealth tax free to use for selfish purposes.
 
Just curious. Are you aware that by donating $10,000 to a charity and thereby writing off said $10,000 does not wipe out the entire $10,000?
 
depends on the details.

was it a real donation or a made up one?
was it cash?
a junky car with an overstated value?
how about stock with large unrealized capital gains?
what kickbacks are given?
favors?
jobs for friends and family?
ski trips? wine and cheese parties?
ambassador positions?
acceptance at a top university?
 
Let's assume cash. Cars, for example, have become much more difficult to gain tax advatages by giving them to charity .. so let's keep it simple.
 
I would assume that a cash donation to a qualified charity would generally be listed as a deduction on income taxes for someone who does an itemized return.

I met a church leader not long ago who told me that people in his position get to take a double writeoff for real estate expenses on his home , with the result that they rarely have to pay income taxes. Were you aware of that?

I'll admit I'm not an expert on all of the intricacies, but all stinks of potential for special priviledge and corruption and unfairness and gaming the system.
 
I think what the pastor is referring to is not a double tax write-off. My father-in-law has been a pastor for 45 years and I'll outline his 'deal.'

He can have the church pay his utility bills and other house maintenance items directly. That way he doesn't have to accept the money (and thereby owe taxes on it). However, I dare say that's a fair deal since he lives his pastoral work 365days per year (not just Sundays) and has never taken a wage for his services .. AND he is the most faithful tithe payer in his church.

There are good and legitimate reasons for tax breaks, there are also those that take advantage.

*raises hand
 
*please consult your tax advisor

I'm just being lazy. Time to go play ball or jumo in the pool with the kids. Been really.
 
No, the way he explained it to me, he got to deduct his real estate expenses twice, and therefore was able to make a nice salary and pay no taxes on it. I think that most church leaders would take a salary. If they are not, this would suggest to me that they are exploiting another loophole, by not reporting their income as income, with all due respect to your father.
 
PKM said:
*please consult your tax advisor

I'm just being lazy. Time to go play ball or jumo in the pool with the kids. Been really.
Click to expand...

or maybe you don't want to explain how much tax avoidance happens by people donating appreciated assets, lest people get upset understanding what is going on.
 
Well, I can't speak to others, but he worked at UPS his whole life and felt called to be a pastor. He paid his own cash to buy the land and the building and hasn't taken a salary. Surely you don't believe there aren't good, well-intentioned people out there. (do you?)

The only way I can think of that the pastor in your story is doing what he is doing is if he is not reporting that the church is paying the expenses, even though they are, and then he is writing off the expenses personally .. thereby double-dipping. I would say most people push the envelope with respect to taxes and some certainly just do bad things, but to think it's somehow exclusive to charities would be patently incorrect. It's most every group of people. Agree?
 
Archie Moses said:
You nonbeliever and sinful man who does not submit himself unto god with a contrite spirit and broken heart shall surely burn in hell for the wrath of the almighty shall come upon thee swiftly and ye shall burn in fire and brimstone.
Btw I'm just trying to help.
Click to expand...

I thought you were joking, but I guess you were serious. I don't think I should have to subsidize you.
 
Assuming you are cool with what the LDS Church does with your money it is very convenient as far as charity goes. I know plenty of non-LDS that want to give to charity but struggle to find the right place.
 
PKM said:
Well, I can't speak to others, but he worked at UPS his whole life and felt called to be a pastor. He paid his own cash to buy the land and the building and hasn't taken a salary. Surely you don't believe there aren't good, well-intentioned people out there. (do you?)

The only way I can think of that the pastor in your story is doing what he is doing is if he is not reporting that the church is paying the expenses, even though they are, and then he is writing off the expenses personally .. thereby double-dipping. I would say most people push the envelope with respect to taxes and some certainly just do bad things, but to think it's somehow exclusive to charities would be patently incorrect. It's most every group of people. Agree?
Click to expand...

What ever this church leader was doing, he thought that it was legal and proper. He may have been mistaken, or there may have been a misinterpretation in the retelling somewhere.

I would not say at this time that people running or supporting charities are more or less good than the rest of the population on average, but there certainly are people who have used them for bad purposes.
I did not intend to single out religious organizations. There are many nonreligious charities also.

A charity by definition is a tool for avoiding taxes, sometimes properly, sometimes improperly, sometimes in grey areas. Sure, there are people that cheat on their taxes in other ways, but if you are talking about legally avoiding taxes on large sums of money, a charity is one way to do it.
 
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Making a flat rate in itself would be a drop in the bucket towards the goal of making the tax code simpler.
The complexity comes from all the intricacies involved with compiling all of the numbers that the rates are applied to, not the rates themselves.

I assume that you are implying that a flat tax would make lots of other changes besides a flat tax rate, but I am not sure what. Now, if by flat rate, you are advocating eliminating all deductions and credits, that would be an improvement from a simplification standpoint. Good luck with that, I would be for it. You realize that practically every organization related to health care, charity, religion, and education would scream bloody murder. So would any company connected to the housing market, and half the general population regarding the real estate deductions alone, and all local and state governments.

However, a lot of complication would remain. You would still have the all the complications involving the self-employed, partnerships, corporations, international workers, offshore tax havens, investment income, for starters. Are you proposing elimination of all private and public retirement savings programs? How are banks, brokerage, and insurance companies effected? Health care? Are you offering alternatives to programs that eliminated? Are all forms of income now taxed at the same rate ? (That is an interesting idea, maybe you are on to something.) Is the flat tax going to magically undue every special rule , benefit , or exception that our tax code has established in the last 300 years for every group or industry? Are state , city and local taxes going to disappear under a Federal flat tax system?

I am all for simplification, but there is a lot more to it than just saying let's have a flat tax.
 
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That would be much simpler for most individuals.

I doubt it is practical. Many of the issues I mentioned in the previous post would also apply. Also the negative impact on the average family might be huge, with a corresponding drag on economic growth that could be devastating. I doubt that a government of the size people are accustomed to could be supported. The shifting of wealth from the poor to the very rich would arguably accelerate, to a degree leading to unimaginable social problems.
 
Only if the rich stopped spending.


......................................................................... nm.
 
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