Posted by
Poor Richard Reborn on Wednesday, January 02, 2008 12:00:26 PM
Non-profits that are recognized charities or that provide services to the general population would be exempt from paying the employer portion of the taxes. Non-profits that serve special interest groups like labor unions, trade associations, ethnic groups or racially based organizations could pay a reduced percentage of the employer portion as long as they could demonstrate that
- they were providing services to their constituents and to the general public that were not available elsewhere.[1]
- they were not actively promoting a political or ideological point of view.
[1] One approach to this situation is to have a graduated scale for non-profits where the non-profit would qualify for a 1/3rd or 2/3rd reduction in their tax burden based on the status they receive from the New IRS. Therefore, the Red Cross might be considered a full non-profit and pay no matching tax while the Martian-American Society might receive only a 1/3rd reduction in its taxes and the 529’s would receive none.
Political parties, 527’s (if The 33% Solution doesn’t rid America of this scourge) and similar organizations would have to pay the full employer contribution since they specifically promote ideological and political agendas.
Does the Federal Government Support Business in Any Way…
There are, of course, issues that are greater than taxes. It might make sense for the Federal Government to support, for example, research that would free us from dependence on foreign oil, find a cure for cancer, or preserve endangered species. The Federal Government could do this through legislation in Congress and executive decisions by making grants or awarding contracts to companies or non-profits that are involved in research and development that addresses identified needs. (Remember to watch them “…like a hawk…”)
[1] One approach to this situation is to have a graduated scale for non-profits where the non-profit would qualify for a 1/3rd or 2/3rd reduction in their tax burden based on the status they receive from the New IRS. Therefore, the Red Cross might be considered a full non-profit and pay no matching tax while the Martian-American Society might receive only a 1/3rd reduction in its taxes and the 529’s would receive none.