Bill Gates and Warren Buffett are leading an effort to get the top 400 billionaires in USA to “give away” most of their wealth. Long ago Bill Gates said he planned to give away 95% of his wealth, which was met with derisive notice that would leave him a mere 2 or 3 billion.
The list of people who have pledged so far can be found at http://givingpledge.org/ . The billionaire founder of Dominos said he too already announced he was giving his wealth away, “planned to die the way he was born, penniless.”
This of course is a scam, one you and I must pay for. Bottom line is nobody is giving anything away, but if you are not uber-wealthy, you’ll have to give yours up.
None of these people are giving anything away. This is how it works: The uberwealthy people hire an army of lawyers to set up foundations to give the money away, called by the IRS 501c3. The money is put in the foundation, and the foundation is controlled by the family. Now the wealth is free from taxes, and is protected by an army of civil servants, that you and I pay for.
The money is invested to earn a return, so it grows larger, tax free.
Next, these foundations are obliged by law to spend 5% of their assets in charitable giving each year. But since 5% is usually less than the investment earns, the foundations are usually growing.
What can they spend the 5% on? Salaries to family members that serve in the foundation. private jets and limousines for family members serving the foundation. All sorts of living and lifestyle expenses “serve the mission of the foundation. A family member paid $250,000 per year to work for the foundation is of course taxable income, the the salary is paid by the ever-growing foundation, which is tax-exempt.
Some foundations spend the majority of its obligatory disbursement on itself and insiders, sometimes up to 100%. Salvation Army is renown for only spending some 7.5% of their money on administration, with 92.5% getting to people in need.
Charitable Foundations are great for the family, who would otherwise be obliged to manage all that money in the real world, if they could not protect it in a 501c3 tax-exempt foundation. In the real world the first generation makes it, the second generation enjoys it, the 3rd generation loses it. Such is the naturally redistribution of wealth. But not with the 501c3.
The bad part is this mass of wealth, free of competition, now has funds to spend on really whatever it likes. Money can be given to nonprofit advocacy groups. Do-good programs like buying mosquito nets for African villages, programs that do more harm than good. They can secretly finance strange science.
In fact, their is little the gates foundation has done that would not be approved by any given congress. This wealth is usually spent to maintain the status quo, or advance some given agenda. This concentration of wealth and power is certainly undemocratic.
A good example of this in action is Bill Gate’s dad works tirelessly to renew the inheritance tax on anyone who cannot afford an army of lawyers to keep their money, like the Gates can. Inheritance tax kills small and medium sized businesses, because people inheritors let a business die rather than pay the inheritance tax on inheriting the business.
Also, since these businesses make or break a newspaper for advertising revenue, such taxes have pretty much killed off the city newspaper.
Have a small business worth 5 million owned by dad? Take out $5 million in life insurance on dad, paid by the business. Dad dies. Life insurance proceeds are not taxable. Take the money and run, one more small business dies. Government policy of get big or get out is advanced, day by day, business by business.
In the bad old stalinist communist countries, they used to execute people and send a bill for the bullet to the family. In capitalist countries, they make you pay for the bullet before they execute you. Our tax money goes to support a superstructures of legislatures, courts, lawyers, regulators and law enforcement that keep the 501c3’s safe from the rabble. We pay for it, then they harm us.
An important reform would be to eliminate all 501c3, nonprofit, tax exempt status. Yes tax churches too, but it might help us all if the clergy experienced taxation. it would eliminate one option for those who would hijack democracies. We do not need an elite in USA, so let’s not pay our taxes to protect their assets. Let’s eliminate the 501c3, and the superstructure that maintains it, and then cut those taxes devoted to it. Country’ll grow.
The Gates family made the billions in business, let them lose it too the old fashioned way, through competition.
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