Chapter 1 THE NGO TRAP and (D.O.G.E.)
by Thomas Cole JD. (From my new book)
The innumerable 501’s across our nation's tax structure are an economic drag on our economy, and a farce upon the nation. 501’s create an uneven playing field and a moral hazard as NGOs jockey for funding and hide illegal political payments. A flat tax of ten percent and the elimination of 501 NGO tax status is the answer to savings and fairness.
As an example. Say Donor makes a million dollars one year, and she wants to give it to an ‘Educational Foundation’ XYZ Ed-Fund to get the tax write off and to help out education. She can write off up to 30% of her gross income. So she gives $300K to the XYZ Education Fund and knocks down her taxable income to $700k.
That means donor is not paying federal income taxes on that exempted $300K. So the government loses say 30% of $300K which is $90K.
Next the XYZ Fund, a 501(c) (3) receives that $300K from donor as a tax free donation to charitable education causes. From IRS codes -
…501(c) (3) Religious, educational, charitable, scientific, or literary organizations; organizations that test for public safety. Also, organizations that prevent cruelty to children or animals, or foster national or international amateur sports competition..
Next the XYZ Fund uses that cash to pay all their employees for a month, and then for instance sends the rest in $50K each to five other 501 (c) (3) organizations.
Here’s a hypothetical list of those smaller NGO's
Latino’s for Body Awareness and Ending Systemic Racism Foundation - This group makes latinos aware that there is lots of racism from conservatives that hate them and that latinos should be on the lookout for micro aggressions - $50,000
Fund for Fair Voter Registration - This group sends paid volunteers into marginalized minority neighborhoods to register new voters as democrats only. - $50,000
Fund for Climate Resiliency and Awareness - This group send out literature by mail and with paid volunteers into K-12 schools explaining that the earth is going to die in 12 years and all life will cease if we do not curb oil and gas use, and that conservatives and oil companies and republicans all want to kill polar bears, whales, dolphins and poison the drinking water of oppressed brown and black minorities. - $50,000
Fund for Fluid Gender Equity Education Fund - This group provides funding for school programs telling kids they need to choose their own gender from 20 different accepted and know genders. And that the kids parents are not to be involved in this process, and that only the school and teachers can be trusted with this important decision. And that any one who questions this is a hater and that Republicans are the haters who wish them harm. And conservatives and Christians hate them for choosing their own lifestyles, at age 6-12. - $50,000
Fund for Bond Measure PP Fund - This group runs an ad campaign for a local school $400 million bond issue for ‘schools, education, learning and school maintenance’.
None of these groups are obeying the prohibitions on lobbying, political lobbying, self dealing and simply claim they are ‘educational’ despite the plain fact they are heavily involved in political lobbying, vote harvesting, narrative forwarding and political indoctrination.
And so in this case the result are :
The government loses $90k in taxes.
The donor gets a tax break of $90k on the donation to their favorite political democrat causes.
The XYZ Education Fund gets to pay all their operatives, employees, and syphon off funds for more fundraising.
Other taxpayers end up funding this tax free political donation, by their own increased share of the general tax burden.
Taxpayers are funding an illegal political indoctrination scheme.
WHAT IF…
Now what if there were no 501 (c) (3), or any other types of charitable exemptions on donations against taxable income and instead a flat tax of 10% on all net income.
The results would be:
Our donor would receive no monetary tax benefit for donating to any organization. This would make a level playing field for where people want to place their disposable after tax incomes. When the gov/IRS decides what organizations get a tax break, and the government/ agencies/ bureaucrats are filled with bias, the result is an uneven playing field. Gov approved groups are allowed tax free funding to speak their message, give to other groups to forward their agenda. Unapproved groups have their speech thwarted. Recalling Lois Lerner at the IRS who was famously outed for turning down conservative groups asking for 501 status while approving all liberal groups.
The government (and thus the people) would have $90k more in taxes from donor because of no tax exemption for her approved donation.
Donor would have to reconsider if giving her own after tax cash was worth it. By removing the 501 status from all organizations, they must now prove their worth from actual financial records, actual results.
XYZ Fund would now have to declare this as income and show exactly where it was spent on a regular income and expense and tax form.
And if XYZ was involved in political lobbying or bond offerings, or financial shenanigans they would run the risk of tax fraud, financial fraud, conspiracy to commit the above. They would have to register as a political funding entity, a PAC or a political party before sending money to political lobbying groups.
The five different lobbying groups previously mentioned would also have to declare the $50k they each received as income and write that off against expenses like anyone else, and they would have to claim their political activities and lobbying and thus would be required to register as a PAC, a political party or organization and obey State or Federal election rules for lobbying and political fundraising with strict accounting and quarterly filing.
Combine this action with a dismantling of the IRS.. Cut taxes to a flat 10% of net across the board. In this instance all taxpayers will have more money to start with, a lot more and so they will be more likely to donate to their favorite cause. In our case here the person who makes a million pays $100K in taxes and has $900K left over. Obviously better than giving away $300K to charity to avoid paying $90k in taxes, and still paying 30% on the left over $700K which is $210k in taxes. With a flat tax of 10% taxpayer owes $100k and has $900k left in their pocket. The gov gets $100k with no collection fees.
CONCLUSION
Under this plan to cut taxes to a flat 10% of net and eliminate 501’s, the government may have higher tax revenues because many more people will be paying taxes. Some will be paying less but the group of payers will be much greater. An increased tax base with lower rates is best for the US as all people will now be facing the same burden of costly government. Thus all taxpayers would be interested in cutting waste, war, and fraud. (D.O.G.E.)
The billions spent on avoiding taxes will be saved, and the billions spent on collecting taxes will also be saved. Charitable donors will have more money to donate to charity and will consider more carefully where to place their after tax charity money. Illegal political lobbying, illegal voter activity, unethical school indoctrination all paid for by tax exempted money would be regulated out of existence.
These lobbying activities would be treated just like any other political activity, and be regulated by the FEC or the State election offices. Hiding donations in fake 501 (c) (3) would become unnecessary and unproductive.
That would be the goal. Save the taxpayers money. Don't make people into criminals. Allow free markets to determine what charity people want to give to. If people want to fund politics they can give their after tax dollars to a PAC, to a political party or to a candidate, but not to a 501 (c) (3) supporting political aims while masquerading as an ‘Educational Fund’
Notes:
https://www.