Dane’s Post 3

http://www.startribune.com/wean-nonprofits-off-special-tax-treatment/219989221/

Above is a link to an article in which Mike Meyers proposes a radical new idea: no more nonprofits! Tax everybody: political activist groups, orchestras, museums, private libraries, educational funds, hospitals, religious groups, house builders, soup kitchens, and—presumably—orphanages!

We know you're holding back, Timmy, cough it up!
We know you’re holding back, Timmy, cough it up!

But don’t worry, the institutions in question would be replaced by a far more able and democratic entity: the federal government. Yes, the same organization that couldn’t design a working website for Obamacare after a three year implementation period would be in charge of dispersing hundreds of billions of dollars for what it would consider to be “good works.”

“Don’t worry: I got this.”

Meyers has many criticisms about nonprofits as they currently stand under US law, some more reasonable than others. He complains about high-paid executives (a fair critique) and a lack of democracy in boardrooms and elitism (leading one to believe he’s never actually been in a boardroom before). Then he gets into “subsidization” and that’s where his arguments flail even more wildly.

While I’ve never believed in executives being paid in excess of their actual performance, Meyers doesn’t seem to really understand corporate governance. It’s a fact of life—the biggest stakeholders in an organization will always be on the board of directors because they have the most invested in its performance. That small donors don’t have as much of a say either individually or collectively may well be a pity, but in the end the real question is: what is the result of such leadership? Is the institution growing or stable? Is money being raised regularly and used properly? Are the officers honest and capable? If the answer to at least most of these questions is “yes” than who cares about “democracy?” Chances are all the smaller donors have other things to worry about anyway.

All these goddamn werewolves, for instance.
Somebody has to deal with the goddamn werewolves…

Meyers is also interestingly selective about who does or doesn’t get tax exemption. He sets his greedy eyes on churches—“where the real money is”—who all apparently possess vacation resorts and retail conglomerates. You know who else has similar investments? Labor unions which—as I’ve mentioned elsewhere—also own such resorts, hotels, golf courses, etc. And yet that’s one golden goose that goes unmolested.

Just look for the union label.
Just look for the union label.

And yet Meyers’s greatest fail in this matter is in not seeing the difference between generosity in the public and private spheres. When an individual citizen gives from their own pocket, they are choosing to be helpful to their fellow man. When a government “gives” it does so from the pockets of its citizenry, which must hand over their own cash or face imprisonment. You can’t measure a nation’s generosity or character by how much its government spends on assistance. The US is the most generous country on Earth because its citizens are the most generous, not the government itself.

As for his view of the democratic nature of government supervised “charity”, it is simply laughable. Inevitably, such money would be placed in the hands of bureaucrats who will—more likely than not—answer only to bureaucrats, all of whom can only be removed from the civil service by dynamite.

Meyers’s so called “solution” isn’t really one at all: its throwing more money at the government and hoping that will buy more competence from the same group of people who have made mistakes before.

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2 thoughts on “Dane’s Post 3

  1. Very interesting read and take ways.

    I think you misread or overlook some keep items within the article. He didn’t indicate that there shouldn’t be nonprofits; but how nonprofits obtain their funds through public. I am on the fence with the idea. As a tax payer, why are we not given the opportunity as to the organization that gets subsided through government funds. Why do these entities get exempt from not having to pay taxes? or into SSN? Why are they privileged to have special tax benefits? If I donate my time and money; I would like to do it myself.

    In regards to your comment about Obamacare and healthcare. Any and every new and old system has bugs it needs to work out and nothing is every perfect, that’s what they call improvement – done everywhere. There are many countries that have transitioned to government run healthcare and it’s been successful. Look at Canada, France. Today’s HMOs and pharmaceutical industry are distroying how patents receive care; well this industry in America takes for advantage of their consumers. Well in France, doctors receive bonus based on making you health by getting off a prescription; while in the US, the more pills drs can put you on the better. If you think about public welfare, who do people turn to when they have a problem. The government. When the depression hit, who had to bail them out? When the real estate market crashed, what happened? Who was there to boost our economy incentivizing ego-appliances and other things?

    To your point, although government has the “potential” to be the reliable one-stop-shop; it will never been in this individualistic county. To his point, I think it’s time we stop handing out “tax expenditures” and giving special treatment to nonprofits. They should have to pay taxes just like any other corporation or taxpayer. That’s my two cents.

    1. Meyers refers to a nonprofit’s exemption from taxes as “subsidization”, but in truth they don’t really get their funding from the government. A nonprofit is more stringently governed than a for-profit in how they can spend their money and in their corporate governance; essentially, all of the money that a non-profit takes in has to be used to carry out the nonprofit’s stated mission. “Profits” don’t exist for organizations like UCare, Lord of Life Lutheran Church, or St. Jude’s because profits are excess cash created during the course of corporate operations, and with no profit, there is no tax.
      Not to mention that we are talking about charities here: Meyers is talking about taking money away from places like Feed My Starving Children, which spends its money making inexpensive but nutritious food for hungry kids overseas. Moreover, he is insinuating that charities aren’t really trustworthy or representative of the American people, although judging from this article he thinks “American people” means “Mike Meyers, Mike Meyers, and only Mike Meyers.”

      Obamacare started out with virtual bribes of Oklahoman senators and a broken promise in which over five million Americans lost the insurance they liked, many of whom were later forced to buy policies they did not want, had unnecessary coverage (single males had to pay for maternity clauses), and is due to cost well over $200 billion in administrative overhead. Not to mention that next year, premiums are going to rise like a missile.
      Virtually every country that has government-run healthcare has a horror story of some kind: rationing, deadly wait times, and lack of innovation.
      We’ve spent many of those times you mentioned turning to the government and more times than not we have been disappointed. The “success” of the New Deal is largely rosy-colored leftist nostalgia: all the billions spent didn’t keep the US from experiencing a fresh recession in the later 1930s, and things didn’t really take off until WW2 started.

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