Should 501c4's be eliminated?

[Dawson Leery]

http://www.nytimes.com/roomfordebate/2013/05/15/does-the-irs-scandal-prove-that-501c4s-should-be-eliminated

Or should they be modified?

Newsday editorial board says do away with them--> http://www.newsday.com/opinion/editorial-now-fire-the-501-c-4-tax-exempt-status-1.5278185

[pipoman]

1. The absolute least of the problems with the US tax code...the least..

[Wait Wut]

2. Good question.

I was thinking about this yesterday. I think it could be eliminated more easily than modified. The modification necessary to close the loopholes and prevent abuse would make the exemption worthless. IMO, it's used more as a money laundering scam for illegal political contributions.

I hope some tax geniuses weigh in on your thread. I'd like to hear from people smarter than me.

[marions ghost]

3. Yes

period.

[bemildred]

4. I'd rather have campaign finance reform. nt

[Wait Wut]

5. Agreed, but...

...do you think that the 501(c)4 elimination or modification could or would be part of reform?

[bemildred]

7. I quite agree.

A stupid idea badly carried out.

[FreeJoe]

6. Sort of - eliminate all corporate taxes

Corporations don't pay taxes; at best they collect them. When you tax a company, the tax gets passed on the form of higher prices and lower profits. The higher prices portion of that tends to be regressive, so why not just take the tax out of the profits? The best way to do that is to tax those profits at the ownership level. That has several nice advantages:

1) Corporate profits are taxed higher when their owners are wealthy and less when their owners (or shareholders) are not.

2) The tax system doesn't have to get involved in petty distinctions like whether the corporation is engaged in socially rewarding work or not. If it makes profits, its owners are taxed. If it doesn't, there is nothing to tax.

The fix that needs to be applied to 501(c)(4) corporations is that they should have to identify their sources of income if they are engaged in any significant amount of political activity. The presumption should be that all 501(c)(4) corporations are engaged in political activity and should have to report their donors unless they can make a compelling case that such reporting is overly burdensome AND that they are not engaged in political activity AND that their social welfare work does not involve topics that are under political debate.