Newman's Own faces mammoth tax bill after lawmakers fail to spare the foundation
politico.com
politico.com
So this isn’t exactly news, and it certainly wasn’t news when Newman’s lawyers wrote his will. As much as I want to sympathize and scream “those Republican bastards!”, I kinda think this is a problem of Newman’s (be it the man, the company, or the foundation) own doing.
Alas, 28 points of upvoting later, no one’s calling me an idiot.
That can enable, among other things, vast abuses by companies that set up charities just to act as a front for private businesses to shield profits from high tax brackets. The charity still has to distribute a certain modest percentage of their assets per year, and that pales in comparison to paying 30% or more in taxes.
So you set up Burger Charity (or call it McDonald's Charity), which owns BurgerStand USA (operating restaurants). BurgerStand generates profit and kicks it back to Burger Charity almost entirely tax free. Burger Charity uses the tax free proceeds to accumulate vast amounts of real estate, which it then leases to BurgerStand (at an artificially cheap rate made possible by the low tax structure, providing a competitive advantage) for restaurant locations. Then they can do the same for equipment in the restaurants as well (Burger Charity owns the equipment and leases it to BurgerStand at an artificially low rate). Perhaps you set up Burger Equipment Corp that you own, and Burger Land Holdings Corp that you own, they all work with BurgerStand USA (the profits of which all kick back to Burger Charity mostly tax free). Cycle and repeat for an astounding tax avoidance scheme that provides a blatantly unfair advantage to an entity willing to abuse the charity approach.
You're entirely missing the point. The point is that our tax laws should be written in a way to enable an entity like Newman's Own to operate without enabling the many abuses you describe.
People have this naive view that tax law is insanely complex and full of loopholes for fun and/or profit. It isn't. It's largely because well intentioned people tried to do a "right thing" for some specific circumstance and unintended consequences made the outcomes wrong. So you plug two holes when there's an outcry but 2 months later some other politician has a great idea and accidentally makes three new ones.
personally outside of individual and religious groups I don't see why others should be excused from taxation for being charitable. businesses get name recognition for their activities and it should be part of being a good corporate entity instead of a payoff
Lunacy of Friedmanism aside, most corporations maximize value to shareholders by being pro-social.
That said, if you are in the situation of setting up a foundation (unlikely, you have to be rich) you should probably force it to spend down to zero in ~20 years. That way you can the best assurance that the foundation doesn't change focus to something you would oppose.
And that's exactly the reason why there's a Byrd amendment - it blocks the income arriving at the foundation via foundation owning private companies tax free.
If so, you could set up two companies. One is the charity, the other is the for-profit. The for-profit has to give much of their profits away, but they're still allowed to be as capitalistic as they want to be, and the charity doesn't need to own them.
On the other hand, I don't know if such an arrangement could ever be legally binding.
https://en.wikipedia.org/wiki/Parliamentarian_of_the_United_...
If things were normal in Congress, it would be a no-brainer.
The practice of piggy-backing your little bill on other bills that are likely to pass has been around a long time. Presidents have asked for a line-item veto since at least Reagan, and it was even in the Confederate States constitution.
But yes, there should be a general rule and practice that bills don't address multiple unrelated topics.
Just because you don't like someone's politics doesn't mean they can't do other things well.
Dysfunctional congress goes back long before that.
1960s https://www.theatlantic.com/politics/archive/2015/01/50-year...
“The 88th Congress, before the [Kennedy] assassination, had sat longer than any peacetime Congress in memory while accomplishing practically nothing. It was feebly led, wedded to its own lethargy and impervious to criticism. It could not even pass routine appropriations bills. It was a scandal of drift and inefficiency.”
1856 https://en.wikipedia.org/wiki/Caning_of_Charles_Sumner was 'symbolic of the "breakdown of reasoned discourse" that led to the Civil War.'
Congress has been broken for a long, long time.
Congress will never be as productive as people expect but also expectations change. It really has gotten worse. To say it's always been broken belies the enormous progress American society has made in the past 100 years. It definitely can work and has worked extremely well on the balance. Just not now.
https://www.washingtonpost.com/news/the-fix/wp/2014/04/10/pr...
The intent to marginalize the opposition and justify ignoring their concerns remains the same.
I expect the Washington Post to be much more accepting of a Congress that does little to advance the President's agenda for the next few years than they were in 2014 (but they may remain critical of the process).
The American republic is structured to enable people holding minority opinions to be heard and to restrain the excesses of majority factions.
Sometimes that works in one's favor, sometimes it doesn't.
I was a voting adult in the 90s, and if we restrict the criteria to my lifetime, the Gingrich years can be tagged as when I noticed more divisiveness and “politics as a team sport”. I lay this at the feet of ol’ Newt and (as one example) his “Contract with America”. From a subjective point of view it’s when “we didn’t get our way, so we’ll be obstructionists” started, and the Republican Party appears to have made it a platform since then. — Signed, Former Reagan Republican
You sure about that? We always hear about the 'bad' attachments to bills, but it's a negotiation tool. Many 'good' bills came to life via the same process, bills which never would have seen the light of day otherwise.
https://en.wikipedia.org/wiki/Line_Item_Veto_Act_of_1996
yeah the practice of stuffing a bill with unrelated extras was called pork. It goes on today (wonder why arctic refuge drilling is in a tax cut bill?)
Example: you want to buy 10 apples, and only the price can change. Your win is the vendor's loss, and vice versa.
If you allow other issues to be added, you create potential for win-win tradeoffs.
Example: "I can't give you these apples for less than I pay, nonnono, my dear friend. But I'll give you this wonderful watermelon on top, for free".
That doesn't even make sense, if the vendor values what you are paying above owning 10 apples and you value 10 apples over the price the vendor is willing to sell for you both win.
--edit--
That's actually how market prices are determined at the fundamental level.
That assumes that apples have an intrinsic value above and beyond the value placed upon them by the two trading parties.
Marginal utility and all that...
The US Constitution forbids bills of attainder. These special loop holes for individuals seem very much like bills of attainder.
Regardless, both cases show that it's pretty hard to actually get caught doing it.
(a) is not a crime by itself, but it raises red flags, and there usually needs to be a really good paper record showing, for example, that other options weren't available, and that only market prices were paid. (b) is basically misappropriation or embezzlement, but depending on the amounts involved, it can be considered a mistake and healed by paying it back. Not sure about (c) and (d)'s legality.
There is absolutely nothing wrong with structure of, for example, the Bill and Melinda Gates foundation, or Soros' Open Society Foundation. Yes, the foundations are not subject to inheritance taxes. But the money is required to be spent on altruistic endeavours. It cannot be clawed back for personal expenses, not by the founders, nor by their descendants.
What's a parliamentarian, and why can they unilaterally change bills? Or am I misunderstanding their role?
At some point, the senate was afraid of gridlock, so there was a special provision made for things that deal with money (not sure if tax only), where things that have a minimal impact on the budget can overcome a filibuster with a simple majority. The parliamentarian is the one who decides if a bill is "minimal impact", which is set at $1.5T at the moment.
Therefore the parliamentarian has decided that changing the non-profit law would cause this tax bill to be more than $1.5T in net change, meaning it can be filibustered.
Edit: Wikipedia article [1] https://en.wikipedia.org/wiki/Parliamentarian_of_the_United_...
[2] * corrected my math, thanks to dragonwriter
In theory, that's not the purpose; the Senate has a tradition of unlimited debate, to assure proposals are fully vetted before being decided, though, yes, they clearly have that effect.
> To overcome a filibuster, 2/3 of the senate have to vote to end it.
No, to invoke cloture, 3/5 of the Senate have to vote to end debate [0], which is why you hear about a 60 vote bloc being filibuster-proof.
[0] https://www.rules.senate.gov/public/index.cfm?p=RuleXXII
https://en.wikipedia.org/wiki/Parliamentarian_of_the_United_...
https://www.holeinthewallgang.org/
The Hole in the Wall Gang Camp is dedicated to providing “a different kind of healing” to seriously ill children and their families, free of charge.So it'll only be the charity that's missing.
There are undoubtedly others he created and/or the foundation continues to support.
[1] https://www.alternet.org/story/100666/paul_newman%27s_politi...
"Unrepentant liberal, Newman was dedicated to civil rights, women's rights, gay rights, and was determined to elect opponents of war and militarism."
Is a popularity contest the best way to select the person who has the last call on charitable management? How's that going?