7600 Trade Associations in USA (Are we ruled by tax exempt organizations -- please help me)

[Lee Hustead]

Lately there is much criticism of the tax exempt status of various sports organizations such as the NFL.  But it seems to me the problem is much more comprehensive than that. I read somewhere that there are 7600 tax exempt trade organizations in the USA.  Don't we all understand that the costs for all such organizations is ultimately passed on to the consumers -- so it is we that

fund those organizations to work in favor of them, not generally in favor of we consumers who pay for these organizations when we buy their product or service. 

I don't understand why there are any tax exempt organizations.  Sure, some of them do good. But so does our government, and it is presumably constrained to be impartial in all things. If I have after tax money to gift to my church or the local FreeMasons that is a good thing for me. But there may be some who are opposed to religion in general or the Freemasons in particular, so that situation amounts to an impartiality that is government endorsed.  Same for sports, paint companies, cosmetics firms, and lobbyists.

It may very well be that I do not completely or properly understand this situation.  Has PDA or any other organization conducted a good study on the merits/demerits of tax exempt organizations.  If anyone out there is aware of such a study would you please advise me. Your help would be greatly appreciated. == Lee

[Jeanne Marie Dauray]

PDA has not conducted a study, but I would be interested to read one if it has been done.

Jeanne Marie Dauray
Progressive Democrats of America
National Issue Teams Coordinator
Office (224) 338-8205
Mobile (814) 598-8532

--
You received this message because you are subscribed to the Google Groups "PDA End Corporate Rule" group.
To unsubscribe from this group and stop receiving emails from it, send an email to campaign-to-end-corpo...@googlegroups.com.
For more options, visit https://groups.google.com/d/optout.

[Walter Kloefkorn]

501, 527, and maybe other non-profit IRS statuses exempt an organization from paying income tax on money it raises or earns. I don't have a problem with that, but I do believe that there should be better standards as to whether they are actually producing a social benefit. 

501(c)(3) status lets a group offer tax deductions to donors, which benefit only folks who itemize- primarily higher earning Americans. Christian churches get an automatic pass on the test to become a (c)(3). THAT should definitely be revisited, an many mega churches are simply ways to let their operators live like kings. I would definitely have no problem with doing away with tax deductible charitable donations entirely and instead creating a solid social safety net. 

Private foundations (Public 501(c)(3) charities that raise money from the general public are considered community foundations) are another thing altogether, offering the ultra rich ways to shelter huge amounts of their wealth from taxes while still keeping it working in the capitalist system. Here in Washington, criticism of Bill Gates usually gets at least a few "But look at all the good he does with his foundation" comments. My reply is that it would be nice if the good was performed by the massive principal, not just the interest. The principal is invested in typical capitalist enterprises, no doubt some in Microsoft and other companies that Gates owns stock in, thus directly benefitting him. My German-born father and grandfather, despite being conservative, were both extremely critical of American foundations as an example of the ultra-rich pulling the wool over the workers' eyes. 

How to Criticize "Big Philanthropy" Effectively

Got Dough? How Billionaires Rule Our Schools

Economist Richard Wolff has spoken about the tax structure and the way it favors the wealthy. His Alternative Radio program, "The Tax Code: Class Warfare," is behind a paywall, but is excellent. 

http://www.alternativeradio.org/collections/spk_richard-wolff/products/wolr005

He also  has a weekly podcast "Economic Update," which is available free. I'd be surprised if he hasn't addressed the tax system issue: 

http://www.democracyatwork.info/radio/0

The April 22, 2014 edition is titled "Tax Injustices." I haven't listened to it yet, but have loaded it onto my ipod. 

http://www.democracyatwork.info/radio/2014/04/tax-injustices/

The thousands of pages of the tax code were written by the attorneys of the wealthy and the corporations that they predominantly own, so this is not surprising. The Right has used this fact to foment dissatisfaction, but then use it to support simplification and "reform" that would enshrine low and regressive rates. A vision of a tax system that ended this upward redistribution, offered working folks a break, and funded a real social safety net and social investment would be a valuable part of the progressive platform. We've touched on it with support of the Robin Hood Tax, but neither PDA, nor the Left (or the bottom) in general have pushed a coherent strategy in this area very hard. 

Historical Perspectives on Nonprofit Organizations in the United States 

Walt Kloefkorn

PDA Washington

[David Sonneborn]

Walter has provided some good resources, and offered several of his own opinions/judgements. While I personally agree with much, if not most, of what is offered in these resources, do any of them really qualify as "studies", rather than commentaries?

Several issues were raised in these resources, some of which Walter also commented upon, as well as in the many other commentaries that Lee alluded to.

Can we agree on  developing proposed advocacy in this arena? That may very well have to wait until the new two year congressional session. Or perhaps,PDA can develop advocacy for targeted congressional races that is in addition to the Robin Hood tax - i.e., that addresses what currently qualifies  as charity-based tax exempt status?

Even more likely, it seems to me, is that the "battles" will need to be with the relevant administrative agencies. That has often not seemed to be a forte of PDA. For example in the recent era, witness the repeated decision  not to advocate for net neutrality to the FCC, ostensibly because there was no good bill to do so.

David Sonneborn, PDA California

[Lee Hustead]

Thanks Walt & Dave for your help. And Jeanne, if I find any I will let you know. I have not yet read your stuff Walt, but now that I know its there I will. In the meantime after more search I found the reference to 7600 trade associations in the USA. Its at >> http://www.businessfinance.com/articles/trade-associations.htm

It says — “At the time of this writing, there are approximately 7,600 trade associations registered in the United States. Of these around 2,000 are headquartered in the Washington D.C. area.”  

Oh yeh, that’s where they need to be, in DC, where they can best influence our congress on their interests. That web site does not say anything with respect to quantity that are tax exempt, but I can’t imagine why near all of them would not be.

[Walter Kloefkorn]

Lee- 

Here's the IRS guide to tax-exempt organizations. I believe the 7600 trade associations referred to would be 501(c)(6) organizations. 

Labor Unions are 501(c)(5)s, and I suspect would resist the elimination of tax exempt status. 

Not listed here are 527s, which include PACs and political parties. They do not pay taxes on their income either.

http://www.guidestar.org/rxg/help/irs-subsection-codes.aspx

Walt