The IRS has granted nonprofit status to a daily newspaper
niemanlab.org
niemanlab.org
[0] https://www.sltrib.com/news/2017/05/07/salt-lake-tribune-win...
Salt lake looks poised to elect its first LDS mayor in something like 50 years today which I think speaks volumes to the weakening of slc secular news sources. One could argue that it’s due to the modernization of the church on some key issues, but based on the coverage of the candidates, I’m not so sure.
On a national scale, I’m really hopeful this trend continues. Newspapers do incredibly important work on “boring” local issues that no one else is able to do.
Or maybe, rather than signs of weakening secular news control, they're both signals of the success of LDS Church. Living in Toronto until recently, I have with increasing regularity, met LDS proselytizers without trying. Business hotels in suburban office parks in Florida now have their book. To me it just seems like a very successful church. It wouldn't surprise me if they were winning back the mindshare even in urban centres, given the cultural discomfort being experienced in urban North America right now.
> On a national scale, I’m really hopeful this trend continues. Newspapers do incredibly important work on “boring” local issues that no one else is able to do.
Indeed, for local publications it makes a lot of sense; though I am concerned about the potential effect it could have on some stories. For-profit news purchased directly by readers has some redeeming qualities, some of the time, in terms of incentive structure.
AFAIK, Marriotts have always had it. The Marriott family is Mormon.
From 2012: https://web.archive.org/web/20120713021925/http://www.busine...
From 2018: https://kutv.com/news/local/mormonleaks-says-new-documents-l...
LDS has somewhere around $65 billion in wealth.
International religious organizations are absolutely businesses. Profit may not be their primary purpose, but they have their fingers in all sorts of business-like enterprises - real estate, stocks, etc.
In Utah. Let's make sure that distinction is clear.
I spent a number of years working in public accounting in the DC area, almost exclusively with non-profit organizations on both the audit and tax side. Tax exempt organizations come under a fair amount of scrutiny, because of how valuable their tax exemption status is, and the government checks everything from executive compensation to programatic expenditures. Most have to get audited annually, and you can read their audited financial statements just like how you could read Apple's or Google's [1].
A key note about tax exempt organizations is that as soon as they start to earn income from activities that compete with typical for-profit organizations, they have to pay corporate taxes on that income. I saw some people implying that Amazon could become a subcompany of WaPo and avoid taxes, which, while technically is in the realm of possibility, would have 3 major consequences: firstly, the 501(c)3 non-profit parent organization can't make dividend-like disbursements to shareholders, so the money would be tied up in the non-profit, secondly, excessive compensation to employees could result in massive punitive taxes [2], and thirdly, the revenue that WaPo would receive would most likely be taxable unrelated business income. Bezos would be better off keeping Amazon separate and donating cash to WaPo -- at least then he'd be able to get a write off.
[0] irs.gov/charities-non-profits/charitable-organizations/exempt-purposes-internal-revenue-code-section-501c3
[1] There are several sites, but guidestar.org is the one I've mostly used.
[2] irs.gov/charities-non-profits/charitable-organizations/intermediate-sanctions-excess-benefit-transactions
There are other non-profit organization types that are specifically suited for political action. Labor unions are 501(c)(5) and often very political. But most political organizations are regulated under section 527 of the code.
The reason is simple: different codes require different reporting requirements. The 501 codes are heavily scrutinized by the IRS to make sure they are legitimate charitable causes. 527 orgs are overseen by the FEC to make sure that they obey political campaign financing laws. The reporting requirements for both are different.
[0] https://www.thebalancesmb.com/can-nonprofits-engage-in-polit...
[1] https://www.thebalancesmb.com/how-the-irs-classifies-nonprof...
The current restriction is based on a hastily worded amendment to the tax code from 1954 by one Lyndon Baines Johnson, who later became president when JFK was murdered.
It reduces to a few principles.
1. orgs should use their tax-deductible contributions in support of their stated missions.
2. orgs cannot be set up for "selfish" reasons. Because of the present and historical culture of graft (the buying and selling of political favors) in the US, we basically assume that anybody who promotes a candidate gets something in return.
3. confusion in the US Senate in 1954 about the difference between an org's "primary" mission and other missions.
There's also an undercurrent of church-state separation. By dollar volume, houses of worship are very big recipients of tax-exempt contributions. Politicians fear the influence of people in pulpits, so it's easier to prohibit that.
In May 2017, the current president, Donald Trump, issued an executive order weakening the restrictions on political speech. He did this under pressure from his political party and from the "evangelical" churches who support him.
'Churches' (this is a short reply so I don't have the definition handy) actually get additional benefits on top of a 501(c)3.
Specifically, if they follow certain rules they don't even have to file a proper return. They still have to throw some numbers the way of the IRS, but in addition to not having to file, religious orgs do not have to publish their returns (normal 501s must do so, part of the 'transparency' of their tax break is they must show CEO salaries, salaries of certain top paid employees, and other expenditures).
In many of these situations, the denominational office has sought approval from the IRS, and has an Employer ID number that appears in the nonprofit search. https://apps.irs.gov/app/eos/ This is helpful for getting access to various corporate nonprofit donations. For example, Microsoft Office for nonprofits is very inexpensive.
My guess is this slides under the radar, catching a tweet at best. Could give this outfit a few years to spin up, and by then, who's to say?
[1] https://www.supremecourt.gov/opinions/17pdf/16-1466_2b3j.pdf
To oversimplify, 401(c)3 are exempt from taxation and donations to them can be deducted from the donor's income tax liability. As a tradeoff, they cannot participate in political activity.
401(c)4 organizations are permitted to participate in politics as part (but not all) of their activity, and are exempt from taxation, but donors to them may not deduct their donations.
527 organizations exist explicitly for political purposes and are exempt from taxation. However, donors may not deduct their donations, and 527 organizations are subject to more rigorous regulation and reporting requirements due to their almost guaranteed exposure to campaign finance regulation.
The best way to think about it is this: while the IRS permits many types of non-profit organizations to not pay corporate income tax, the ability of donors to deduct donations from their personal income tax is a privilege specifically granted to charities. Charities are a subset of nonprofits which exist for specific purposes, and political advocacy is not one of them.
Subject to state law, it is often possible to incorporate nearly any type of business venture as a nonprofit (even a conventionally for-profit one, such as a retailer). However, the IRS does not grant tax-exempt status to any nonprofit. Only nonprofits of specific types are granted tax-exempt status.
Creating yet more loopholes doesn't sound like a good idea.
It's more like a government-led incentive scheme to support.
A contrasting system: once I bought a T-shirt at a general store in Scotland and having paid the shopkeeper said genially "you won't be needing that any more" and snipped a small cloth loop from between the shoulders, explaining that in doing so he had converted it from a child's pinafore (VAT rate 0%) to a man's T-shirt (17.5% at the time). I want to live in a country where all children are adequately clothed but it seems to me simpler to fund that directly, e.g. via a benefit for those with dependent children, possibly income-tested. If the concern is that the "feckless poor" will just waste the money then I'd question (a) whether this popular demon is actually so common and (b) whether such people switch from proper parenting to wastreldom on the basis of a one-fifth price increase.
The 'opposite side' of that is also true:
I'd rather see a carbon tax than eg photovoltaic subsidies.
The latter requires picking winners, and the recipients need to interact with bureaucracy to claim. The former rewards simply consuming less just as much as eg switching to renewables; and you don't need a lawyer to claim your (relative) rewards of lower taxes.
1: https://www.npr.org/2019/10/29/774494691/episode-949-the-pig...
"[A]mount of CO2 spared compared to the average" seems to be hard to define: if I burn lots of natural gas to create electricity, I release less natural gas than if I burn coal. But I release more than if I had managed to make do without that electricity.
But yes, a carbon tax is exactly that: if you pay your tax, releasing CO2 is legally and morally fine.
There's a certain amount that we can safely release. (That amount is smaller than what we release today.) The climate doesn't care about who's releasing CO2. So we use willingness to pay taxes to ration out that limited supply of allowable CO2 emissions.
Eg your fear seems to be that rich people can just buy indulgences and keep sinning, instead of having to repent? I say compared to giving every person an equal share of allowable emissions directly, I'm happy to personally emit a bit less, and have some ultra rich person indulge in return for them paying crazy amounts of taxes. I don't care about their moral fibre as long as they pay up.
If too many people decide to just pay the tax instead of cut their emissions, we'd need to adjust the tax rate. Because of inflation, population growth, advances of science etc, we would want to revise the tax rate every once in a while anyway.
(A cap-and-trade system would do that adjustment of the price automatically, but it seems that in practice it's hard for politicians to refrain from handing out permits for free and handing out too many. Eg the EU system would have worked better, if all permits would have been auctioned off by the government instead of being handed out to previous polluters for free.)
I strongly oppose income/means testing for many reasons: weird unintended consequences at edge cases and extra hoops to jump through. I'd much rather we all pay more in taxes to pay for everyone without means testing.
So it doesn't really matter whether we means test taxes only, or whether we also means test cash benefits. The former is simpler, as you suggest.
You can make the latter work without weird edge cases; but it's more work to keep everything consistent.
(Income tax is paid as a function of income. In that sense, it's already means tested. For the argument I am making is doesn't matter whether that function is linear or convex, ie whether we have a 'flat' income tax or a progressive one.
A tax that's fixed per head would not count as means tested.
Whether you'd want to call a sales tax means tested is debatable. Your absolute sales tax burden goes up with your consumption, but not directly with your income.)
Another example I came across recently was a corporate tax break for funding vocational education. The rationale being that the corporate looking to maximise their gains would sponsor graduates that could work for them, indirectly aligning curriculums with industry and increasing graduate employment rates.
Local news is dying/dead in many regions, yet it is essential for the functioning of democracy. Asking people to make informed decisions without reliable reporting works about as well as a thermostat without a thermometer, i. e. it doesn't.
Since everyone profits when others make better decisions at the voting booth, there is a direct argument to be made that the benefit of people subscribing to a local paper goes not to them, but their community, especially since important stories also tend to reach non-subscribers.
Assuming one agrees with that point and isn't part of the all-journalists-are-corrupt-marxist-crowd (or the alternative some-blogger-can-do-it-better-crowd), one would want to find ways to support local news. But direct subsidies run into obvious problems.
Reducing taxes would then be an obvious way to allow journalism to function: Its benefit is proportional to revenue and therefore preserves the market mechanisms.
Books and newspapers actually are exempt/partially exempt from VAT in many countries. But VAT just isn't a relevant factor in most of the US.
You can consider this "just a loophole" in the way that "don't put arsenic on pizza" is "just another regulation".
Any reduction of taxes on a special category means a relatively heavier tax burden on other necessities. Like tampons. See https://en.wikipedia.org/wiki/Tampon_tax for equivalent outrage.
Btw, I'm all in favour of allowing people to put arsenic on pizza, as long as its clearly labelled.
For example, according to Patch (which is not nonprofit) this morning, if I exclude the vast amount of advertising and pathological fake news and focus on actual local coverage, in my hometown the local electronics recycling program is temporarily moving because of road construction, and three miles across town the police have reported three recent delivery package thefts.
How would either story influence me being more or less likely to vote for Trump in 2020?
There's been an intense cultural shift towards not making informed decisions in the voting booth; one MUST either vote along demographic identity lines or optionally follow groupthink or keep very, very quiet lest suffer possibly violent consequences. If those cultural trends change, then there would be motivation for informed voting. However, "everyone in charge" at this time likes the system and its a disinformation to pretend informed voting is relevant at this time. The problem at this time isn't "voter education" but "conform to your group or be punished".
>There's been an intense cultural shift towards not making informed decisions in the voting booth; [...]
These latter points ring with me, and I think bolster the argument that higher quality local news will aid our democracy.
Currently, if you scope out the national press, you get a national point of view. Without reporters writing about the affect that the national story will have on the local economy (aka "Me", "Our Community", "Our schools") voters can only be informed on one level.
When the air qualify affects your neighbors due to reduced EPA mandates, or school taxes go up because federal dollars evaporate, or kids are learning to check boxes in standardized tests, or the local banks get bought and sold to multinationals, and everyone mortgage is underwater along with the back yard, I think I might see a lot more value the work of a local reporter making local connections to these national ideas.
A robot can post about the reycling on patch, but can that robot also mention that a federal mandate makes the import tariff on transistors a little higher, and that Genui-Sys Integrations is gonna be underwater on its ECU contract, so possibly Billy's dad will face the pink slip?
Real Example: I didn't know that GM was contracting some electronics manufacturing to a pick and place shop floor in my county until I saw the shutters and asked around: "Hey what did that company even make? Bad market or what?" They made car parts.
It can be very helpful for informing about local candidates. Even the nearby metropolitan newspaper isn't going to tell me about the incumbent running for reelection who only showed up to one board meeting in the last term; I need the local county newspaper for that.
Or do you mean that businesses should be able to convert to non-profit organisations when the business is no longer viable? I can agree with that sentiment. If the shareholders are prepared to give up control, and the creditors are paid off, it would be great if businesses converted to tax-exempt non-profits instead of going bust entirely.
1. I am not saying they were right or not because I just don't know, just my reading of the post.
Suspiciously they made near zero profit the next year.
I have no issue with local papers going non profit, however the idea they can do it any not cross into the political side is going to be a stretch. either from the weight given to certain stories, selection of letters to editors, down to opinion pieces, there are many ways to skirt the rules
It's just the nature of the business (ie, editors/writers/university english depts tend to be left leaning and then fill the news room with like minded people, with maybe one token conservative guy like NYT does) and even more so when its existence becomes tied to government spending and policy.
Not to mention how hysterical and FUD-filled politics has gotten recently I'm highly skeptical that anything non-partisan wing will be tolerated.
The biases are about ideologies and how idea/stories/people are presented, spun, or casually dismissed in general. A big one is what sources are used.
Additionally, even shamelessly partisan rags like WaPo or Vox would be critical of obvious democrat mistakes too. The bar isn't that low yet where something like SNC wouldn't be covered. It's often in the details and the stuff not said or treat uncritically.
Because I and others are not forced to pay for National Post et al to exist via taxes. Nor are the other ones claiming to be neutral.
Why else would I be talking about CBC and the implications of state-sanctioned media? That's the context. The misguided idealism they'll be neutral.
* We already have enough tax loopholes.
* The definition of "newspaper" is going to get pretty ridiculous fast with this loophole. Do you want your tax dollars to support Goop Weekly? Maybe (I don't know you after all), but I certainly and vehemently do not.
Company gets to subsidize favorable propaganda, while at the same time getting a nice tax write-off.
Edit: For those downvoting, would you care to elaborate? I don't see how this won't be abused. What am I wrong about here?
The NFL is a non-profit org.
To be fair, I think it's a dumb state of affairs too, but overhyping problems is often counterproductive.
The position that I'm coming from is that a newspaper isn't always meant to be particularly profitable, e.g. in my small city our major paper is owned and underwritten by a wealthy real-estate family.
While the paper does good reporting in other areas, including having won a recent Pulitzer, they never publish anything negative about the local real-estate and development. You will never find a piece critical of development or developer mistakes in this paper.
If you're of the mind that papers can and are used as a way of laundering business propaganda for the owner, allowing it a non-profit status would then allow it to be a money-sink. The owning family can now provide donations to the non-profit paper which serves the business interests in the PR sphere. These donations can be written off. This means the tax-payer is now further subsidizing their PR efforts by virtue of a tax write off.
Cough, excuse me.
I'm really curious about the repercussions of this. If this works out decently for them, I'm pretty sure other news outlets of all shapes and sizes will follow in the next few years. Maybe this is good. There's a potential here to revitalize the news system in general. They won't be so dependent on pandering to a select few corporations and bullshit advertising methods. Maybe this will bring some more unbiased... wait, no probably not. Not being funny, that just made me realize the folly. If donations are going to be a big play, the only way to really get good donations is to appease a certain viewpoint. I don't know... maybe there's a way to mitigate that? It does say no more political endorsements... eh... I doubt that'll happen. I was hoping to have a good, happy train of thought on this one. Then I remembered that all humans are assholes.
Fucking hate driving in Godless wasteland of a state.
Continously flow intersections and diverging continuous intersections. You end up driving on the left hand side and drive all wonky. Its terrifying to encounter the first time and makes no logical sense. They brought it to colorado springs and it's so amazingly pointless.
So they can be used in conjunction with other entities to really amplify the tax benefits
If you think of them like 401k on steroids It can help, as deductible contributions are unlimited up to 50% income and anything above that rolls over into the next year, and you can do a bunch with asset prices and velocity.
Different parts of the tax code pull deductions before or after AGI, so you can game this forever all while the masses can only express their discontent by targeting “income tax rates” and the edgiest of them all says “marginal income tax rates”
Summary:
> Outlets must be domestic. > Outlets must be active, though they do not need to be publishing new content on a regular basis to be included in the study. > Outlets must be young. > Outlets must be primarily digital. > Outlets must produce original reporting. > Outlets sponsored by an institution must produce journalism that focuses beyond its own walls.
"Young" and "primarily digital" are the biggest restrictions.
Also, your tone suggests you're ignoring the word "founded".
* ProPublica
* The Texas Tribune
* NPR and all its affiliates
* PBS
The grandparent (yoelo) who started this thread, for one:
"The requirement of 401c(3)s to be "non-political" looks like a pretty weird to someone that doesn't live in the US."
>There are many non-profit news organizations
Which is orthogonal, what's strange is why such a law, that they should be "non-political" exists...