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Congress Sics IRS on “Enemies”
I was thinking of writing a book. “The Coming Age Warfare”. If I did get around to it, the following story might be the first chapter. Like most wars, the one I see coming between young and old will simmer for years. Along the way there will be skirmishes that result in injury and bad feelings. I find this example comical. But there is nothing funny about it.
Three members of Congress have shot a cannon at the American Association of Retired Persons (AARP). Republicans Herger (CA), Boustany (LA) and Reichert (WA) sent a letter to the head of the IRS asking that the tax status of AARP be reviewed.
AARP is a 501(c)(4). That means they pay no taxes at all. Sort of like a church. At first look this might make sense. After all, the AARP is a non-profit that is just trying to help out the oldsters. Right?
Wrong! AARP took in $600,000,000 during 2010 from endorsement deals. Not a penny of taxes was paid.
Anyway, the AARP fired back with a (mealy mouthed) letter the next day:
AARP Response to Recent Letter from Reps.
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Herger, Boustany and Reichert
We are disappointed that the letter seeks to decry the exact kind of pro-consumer, market-changing efforts that AARP has led since our founding in 1958.
You can bet the folks over at the AARP are “disappointed” that some congressmen have sic’ed the IRS on them It’s worth $150mm a year to them.
I wouldn’t worry about the AARP just yet. They have an army of political friends and some big shot lawyers. It’s a safe bet that the IRS sits on this until 2013 when a (potentially) new IRS Commissioner has the corner office. In the meantime, one can expect that the AARP will direct their campaign investments contributions wisely. They will support those candidates who will push to preserve the cushy tax status of the AARP.
Note:
This business with tax breaks for the AARP (and other big 501(c)(4)s) is another good example of how screwed up our tax laws are. The current system just creates carve-outs and preferences for powerful groups. Why? The answer is that those same powerful groups have control over the outcome.
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I'm not encouraged either, Geezer. But maybe they'll surprise us.
I think, if anything, our mistake has been to not effectively oppose the growth of Leviathan. I've had 30 adult years (I'm in my late 40s now) to do something about it. Looking back I'd honestly say I could have done more, done better. Water under the bridge at this point. Maybe, like the generations that started things, I just couldn't imagine things getting so out of hand. I can't help but wonder what could have been accomplished if we would have been as relentless, single-minded and ruthless in the pursuit of liberty as others were in their pursuit of centralized power. That's what happens when you fail to understand your enemy and what's at stake I guess. I won't make the same mistake again, though!
Didn't mean to imply anything else - though I can't think you took it that way judging from your reasoned reply. Take it easy, Geezer.
Everyone should get a one time check for the money they put into the system over their life, and then all of the welfare agencies supporting them should shut down. I'm not your tax slave, I do not want my money stolen to support a ponzi scheme, and my money is not yours to take. The system is unsustainable anyway even if you throw out the immorality of it. Grow the fuck up? How about people grow up and take care of themselves and stop demanding that the government do it for them?!
The very reason that the federal government overspends and has the financial resources and clout to invade every aspect of life in the US is the 16th amendment permitting the income tax.
The 16th took taxing power away from the states making the federal govenment all powerful. Now the feds are considering the VAT which will crowd out the states' ability to collect sales taxes.
Take away the 16th and you have the answer to federal overreach and over spending, and makes discussions like this silly and irrelevant.
the politics of wiping someone elses dirty butt
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thats good business
There should be a differentiation as to tax status. It should be a simple one - if you directly use at least 70% of your donations/income to HELP people, as in give the income away as gifts/aid or directly benefit individuals through other methods (food bank, free/discounted housing etc), you are tax exempt.
Any organizations that do not directly help anyone and are more of a lobbying platform (most of them), they pay taxes. This would stop a lot of the garbage that goes on.
Or how about this much simpler rule.
Everyone, every business, every entity of any sort abides by the same rules.
If you are a charity then the money you dole out is a write off against donations just as are other expenses. If they are truly non-profit then it isn't an issue. If they are really a shell for hiding the ability to make mamouth political donations, pay executives and bullshit "consultants" millions or otherwise scam the system then fuck them.
Unrelated Business Taxable Income is already on the books.
Any charity or tax protected entity that derives income from sources unrelated to the core purpose of that entity must pay tax on that income.
Just needs enforcing, it's always a question of interpretation.
I thought the core purpose of the charity was to benefit the donees? If charities aren't doing that with their money "earned" then they aren't really a charity.
I'm not debating your statement because I know it's correct. I'm pointing out the absurdity of our law.
Actually I think we agree in principal, and if you think about it, I think you'll agree that the concept of the UBTI regulations is correct also.
AARP is one of the scummiest organizations around. It pays its executives huge salaries (in the millions) and incredible perks with enormous expense accounts. It is a self-promoting claims to represent seniors while it shafts them through bac-door deals. It deserves to go extinct.
The American Association of Folks Over Fifty and Buffet Discount. Doesn't have anything to do with retired.
They have a lot to do with pimping - oops, "endorsing" - various Medicare supplement and Advantage plans. Would love to know what they rake from United Heathcare, BCBS and the rest.
If I remember correctly AARP has a government approved monopoly on selling medicare supplement and advantage plans. If not a monopoly it's close.
How is it a non-profit can give campaign contributions? If a minister supports a candidate in front of his parishioners the church can lose it's tax exempt status. Unless of course that church supports Democrats. What a great country this has become.
People can enroll through AARP and they offer "counseling" on your options but they don't administer any of the plans or technically sell them, just "endorse" and they really love to push United Heathcare products. There's plenty of direct selling by agents for the various insurers. And, just because I know how much bad info is out there, for the record - if you enroll in a (dis)Advantage plan, you're basically choosing to have your Medicare benefits administered by a private insurance company. The claims go to them, not Medicare, to be processed and paid. Also, most are structured like HMO or PPO (you're limited to their Dr.s) and all are limited to a geographic area vs. original Medicare you can see any Dr. that accepts Medicare anywhere in the US. I would advise anyone getting close to that time to call 1-800-633-4227 (1-800-MED-ICAR) with questions NOT AARP. They (at Medicare) have all the info on all the plans and no incentive to sell you anything. You might get a cranky asshole but there's a lot of good peeps there too. They are 24/7 - the night crew is more laid back.
*this has been a public service announcement
Exactly! The AARP is nothing more than a scam to generate a donation source and to create the perception that it's endorsement has some validity.
It's purely a political organization masquerading as a not-for-profit.
It should rightly be called the Old Person's Union where the union leaders use all the same tricks and scams to solicit dues, skims off th ebeenfits packages and doles out millions to those politicians who help them retain their power.
A few congressmen probably got on their mailing list. Once you do they sell your name to countless other marketing firms and you receive a constant barrage of mail from a wide variety of companies selling thier services. Car insurance, life insurance, annuities, burial plans. I have all that shit. I could warm my house all winter burning the the shit sent me in the mail every year. It took great diligence, and subterfuge, on my part to stop this procedure. Somebody needs to regulate their asses...
The Dichotomy of Fiscal (tax code) vs. Monetary (Printing press) works until it doesn't. The ZH mantra is that Big Ben and the Federal reserve cult is evil. They might be right. But I would argue that Ben (and other central bankers) around the world are caged beast. Thats why they look bloodlusted. They can provide all the intertia in the world, but are stopped by the iron bars of carve outs and social engineers for things like solyndra, and the Newt "Stratford" Gingrich 501c institute of Military knowledge for dudes who have probably never even had to kill an actual fox attacking an actual henhouse.
The thing many people dont understand about Ron Paul is that he dislikes the current end game 75,000 page tax code just as much as the end game printing press fed. it takes a mad man (or a medical doctor) to understand the the MAD econmic paridigm that gets set up by people with LAS degrees.
Yes the RC church should be taxed as well as other religions especially if they cannot deliver what they promise. Some religious organizations are the richest asset investors in the world. The Greek Orthodox church for instance, ownes billions in gold, bussinesses and land while Greece is in process of default. Good work Bruce
So the church should pay tribute to Government but otherwise expect nothing in return? Excuse me, only if they cannot deliver what they promise? Not very clever what you did there Wormwood...
That would be souls! They should render souls unto the U. S. Treasury. Wallstreet would have a field day concocting CDOs out of those assets. A large percentage of them are subprime, so the possibilities are awesome!
Talk about selling one's soul to the devil! This bunch would package all those souls and their associated default swaps into some sort of devilish soul backed security.
Definitely a marketing organization draped in a geriatric cloak, but with primary interest in profits for management and staff. Dig deeper to reveal salaries, perks, expense accounts and lobbying give- aways to friends. They will sell, endorse and advertise anything from predatory annuities to sex enhancement products for the elderly. It is about time they are required to pay a tax on profits which far exceeds senior AARP membership dues. Unfortunatly it is all part of Washington scene so it becomes self perpetuating until it all collapses---just like the entire financial system. Iam a senior citizen and former registered lobbyist so I have seen it from both sides !
"Definitely a marketing organization draped in a geriatric cloak, but with primary interest in profits for management and staff."
One could make the same observation about many "charities" as well.....take the Red Cross, for example. Some years back as head of the RC, the running joke was Elizabeth Dole would have had to take a serious pay cut from 400k to 200k to run for POTUS.
I am old man and my memory is fading. But in 1996 you had Clinton vs. Dole vs. Nader. The female dole was on the MSM asking people to give blood, while collecting over a million dolars per year in total compensation. The MSM also demonized Nader for being a greedy 60ish man with a total net worth of over million, yet "hippocritically" advocating for "progressive" causes.
And then we had 4 years of Bill on the red phone with Newt, talking about important stuff from their POVs.
Like I said. I am an old man. So if my junker wants to fact check, I suggest they use google and post.
Sounds like Bruce Krasting is jealous. So what if they took in $600 million. What does that have to do with anything? The Catholic church probably took in a zillion times that. Should they be deprived of their tax-free status too?
Bruce, instead of lambasting the AARP like a statist, you should be figuring out how we can all be 501(c)(4).
You wouldn't be paying as much in taxes (or worrying about them) if there were no 501's.
The tax rate for all citizens can't be zero. But it could be a whole lot lower than it is.
"The tax rate for all citizens can't be zero."
Really? How did the US survive until 1913?
Please show where any boomer was asked their opinion about social security, medicare, medicade, Johnson's guns and butter spending (great society program), or any of the many hairbrained socialist schemes that have been foisted on boomers or those that are younger than boomers. While you're at it, please show where any boomer was asked their opinion of the invasion of countless countries around the world by US forces.
Does anyone believe that votes cast by boomers in the 60s thru to NOW had any more effect on the way our elected officials voted than votes cast today? We all sent telegrams to our reps telling them to vote against TARP... twice! How well did that work out?
Social Security existed long before the first boomer was born! ... Which means that the US was on the road to socialism long before the first boomer was born.
I'm not a member of the AARP and could care less if they are taxed or not.
Bruce, if you are attempting to cause a 'divide and conquer' split between old and young you are on the right course. It's a proven course of action... divide the population into ever smaller interest groups and keep them fighting each other... Draw attention away from the theiving and corrupt bankers and pols. You're going for the age card, Mish is going for the union card... You two make a good team! Now all we need is for some clown to decide a return to prohibition is a good idea.
Keep up the good work Bruce... Soon, you too will have your own site... devoted to YOUNG vs OLD. Perhaps you could call it KILLABOOMERTODAY.com ?
I hope you renewed your parents subscription to AARP Magazine. lol
Bruce doesn't have to do anything to make the case... It's completely obvious... the shoulders expected to carry the dead weight and cumulative promises are simply not strong enough. Blame need not be given, only promises reneged and labor spared.
Absolutely! There will be no freedom for the slaves!
It's sickening to watch moral crusaders endorsing immoral means to allegedly create moral ends. Then they sit back and complain that these never work, without ever taking into account that it simply cannot, as it is wholly incoherent.
There is no such thing as a moral system where one man is forced to work to support another. You may claim "we need the money" all you like, but that can never justify the violent coercion that it relies upon for "enforcement."
Like all of the rest, Mr. Krasting, you are but an evil-do(good)er, the unwitting tool that supports the evil that harms us all. Meanwhile, those of us in society who exist in a peaceful manner (voluntary cooperation) will do our best to make the world a better place in spite of your violent nature.
The paradox of governance...
>The tax rate for all citizens can't be zero.
Why not?
Why is theft essential?
Exactly!
I guess it's part of being a "citizen." Kinda like membership dues, only in this case someone else insists (at gunpoint, if necessary) that you too are, "in the club."
Meanwhile I claim it's all null and void as it is administered under duress, and the whole system operates in the same manner as a lobster tank, where, due to pure jealousy, everyone makes sure no one else escapes.
Well, with regards to income tax, before approximately 1913 the tax rate was zero. Income tax was unconstitutional until the 16th amendment was ratified. But you may have not been speaking of income tax. Many citizens pay no tax at all, for example minors. Are you saying they are not citizens?
Just think of all the people who would be out of work overnight if the tax code were to be revamped and made 50% less complex. Obviously those people could be doing more productive things with their skills and labor - and eventually they would...but not in the near term.
Should a parasite continue eating on your flesh because it has not found a new host yet?
Why stop at 50%? Here's what the tax form should be ...
What did you make? Take 8%. Send it in.
I don't care about the percentage, but everybody, individuals, corporations, churches, non-profits, etc pays the same rate.
Churches own apartment buildings, shopping centers, and other income-producing properties -- which are all tax exempt. At least the tax code could restrict the exemptions to "places of worship" or some such lawyerly verbiage. Sheesh.
Therein lies the rub. We cannot ever seem to fix anything because the short term pain is too great. So we become something far removed from what made us great. Ron Paul stands ready to rip off the band aid.
That's total bullshit. As both an accountant and a lawyer, I would like nothing more than to be put out of a job because the system has been made "so easy a caveman could do it." Ultimately both professions are solely reliant upon inefficiencies in the system... to a certain extent inherent and eternal, but I digress.
I can find something else, probably more productive, to do...
Please show link between tax revenues and how much our politicians decide to spend. To me they look unrelated.
Which makes it incredible that we're expected to even pay taxes... (if they're just going to print the difference, why not print all of it?)
"The Catholic church probably took in a zillion times that. Should they be deprived of their tax-free status too?"
YES! and all other churches too.
Tough luck Mao, sorry it pains you so. The Jefferson letter Wall of Separation runs both ways, and the idiots who faint at the sight of City Hall creches make sure it remains so for now.
"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof"
If every entity or person has to follow the same laws, and those laws aren't written with the bullshit to benefit or hurt one group over another (a very unAmerican practice that has become mainstream) then what's the problem?
It's been mentioned before I'm sure, but what does everyone think the IRS is anyway? It's a tool to benefit large corporations and to silence churches. The government is better off letting them not pay taxes, for it keeps the masses dumbed down and unpolitical.
if you follow my logic...wear as the most powerful get the best tax benefits {1%]....than the catholic church has to be the most powerful of them all....
The primary purpose of government is to take action to keep itself alive and grow in the near term.
Things like old people cost the government money. Things like race-baiting buys votes (the AARP is vote-rich too but this administration isn't very good at math). Therefore, the AARP gets the treatment while this tax-exempt outfit, unabshedly named "The Race" probably won't be getting any surprise visits from the IRS:
http://biggovernment.com/tfitton/2011/06/28/national-council-of-la-raza-funding-skyrockets-after-obama-hires-its-vp/
Bruce is right though, tax-exempt perks or no, the age wars are going to get worse - which is the same thing as saying that the bulge bracket demo (baby boomers) is going to have to fight to actually collect on all the things they voted for themselves when they were younger.