[SeeSharp]

What everyone needs to understands is that all of these whack-a-doodle foundations came about as a result of the income tax. For the first 70 years after the income tax was passed if you were rich and you didn't want to pay any tax you got out of it by setting up a non-profit foundation and putting all of your assets in it. When you needed money you just borrowed it from the foundation and never paid it back. After the original principles died, the trustee's of these foundations tended to go rogue and there was nothing the heirs could do about it.

The Johnson administration got the IRS to issue a regulation requiring all non-profits to use fund accounting as their accounting methodology. Then the Regan administration got a statute passed making unpaid loans taxable as income. That pretty much ended the party for rich tax evaders, but it did nothing to curb the activities of the foundations.

[bkopto]

Very interesting assertion about the income tax angle - if true, it’s yet one more social pathology spawned by the income tax.

[ilovesarah2012]

Are salaries from tax-exempts taxed the same as regular incomes?