It looks like you're using an Ad Blocker.
Please white-list or disable AboveTopSecret.com in your ad-blocking tool.
Some features of ATS will be disabled while you continue to use an ad-blocker.
Since 1862, an obscure company called American Bureau of Shipping has been approving oceangoing vessels as seaworthy. The Houston-based firm reported $3.17 billion in revenue and just less than $600 million in profits from ship inspections from 2004 to 2010 and paid no U.S. income taxes on those earnings.
ABS shows how an organization that isn’t a charity, a school, a religious institution, a hospital or any other kind of body that commonly has nonprofit status can earn millions of dollars and legally avoid paying U.S. taxes.
At a time when the U.S. is struggling with a gaping budget deficit, nonprofit companies such as ABS and the Polo Association operate large-scale, profit-making commercial enterprises tax-free.
“This showcases a massive problem of tax-exempt companies that walk, talk and quack like tax-paying businesses but benefit from very favorable treatment under the tax code,” says Dean Zerbe, a lawyer who was senior counsel and tax counsel for the Senate Finance Committee until 2010. “Taxpayers are subsidizing them. It’s wild.”
Anyone can start a nonprofit. It’s as simple as incorporating in any state and correctly filling out an IRS application. Once that’s done, a company is tax-exempt.
There are 1.63 million tax-exempt organizations in the U.S., according to the Urban Institute. Nonprofit charities reported revenue of $1.51 trillion in 2010 from donations, government grants and contracts. Zerbe says that the U.S. Treasury could collect tens of billions of dollars annually in taxes from nonprofits that make money essentially as for-profit companies.
ABS answers that question every year with the following phrase: “To promote the security of life & property on the seas.”
ABS’s headquarters occupies an entire eight-story office building on the north side of Houston. Its reception area displays scale models of a schooner, an oil tanker and an offshore oil-drilling ship.
The nonprofit company has earned hundreds of millions of dollars in profits in the past decade; lavished its executives with multimillion-dollar pay packages and perks; and purchased an offshore hedge fund, its IRS filings show.
If enough of these companies were uncovered, I feel it could certainly elevate some pressure, though not fix it outright.
Charitable and religious organizations
Many tax systems provide complete exemption from tax for recognized charitable organizations. Such organizations may include religious organizations (temples, mosques, churches, etc.), fraternal organizations (including social clubs), public charities (e.g., organizations serving homeless persons), or any of a broad variety of organizations considered to serve public purposes.
The U.S. system exempts from Federal and many state income taxes the income of organizations that have qualified for such exemption. Qualification requires that the organization be created and operated for one of a long list of tax exempt purposes, which includes more than 28 types of organizations and also requires, for most types of organizations, that the organization apply for tax exempt status with the Internal Revenue Service, or be a religious or apostolic organization. Note that the U.S. system does not distinguish between various kinds of tax exempt entities (such as educational versus charitable) for purposes of granting exemption, but does make such distinctions with respect to allowing a tax deduction for contributions.
The UK generally exempts public charities from business rates, corporation tax, income tax, and certain other taxes.
(a) Exemption from taxation
An organization described in subsection (c) or (d) orsection 401(a) shall be exempt from taxation under this subtitle unless such exemption is denied under section 502 or 503.
(b) Tax on unrelated business income and certain other activities
An organization exempt from taxation under subsection (a) shall be subject to tax to the extent provided in parts II, III, and VI of this subchapter, but (notwithstanding parts II, III, and VI of this subchapter) shall be considered an organization exempt from income taxes for the purpose of any law which refers to organizations exempt from income taxes.
(c) List of exempt organizations
The following organizations are referred to in subsection (a):
(1)Any corporation organized under Act of Congress which is an instrumentality of the United States but only if such corporation—
(A)is exempt from Federal income taxes—
(i)under such Act as amended and supplemented before July 18, 1984, or
(ii)under this title without regard to any provision of law which is not contained in this title and which is not contained in a revenue Act, or
Originally posted by MDDoxs
unjustly dodging taxes
Another such outfit is the U.S. Polo Association, which tells the IRS its tax-exempt status is allowed because its purpose is to govern the sport of polo in America.
In 1982, more than five years after clothing designer Ralph Lauren featured a player with a mallet on horseback for his Polo brand logo, the Polo Association began licensing its own line of merchandise -- with a similar image.
Today, the association’s brand, U.S. Polo Assn., has annual retail sales of $1 billion, placing it in the top 50 of all licensed brands. The association pays no income tax on its licensing income, its filings show.
H.R. 4399: Congressional Salary Reduction Act
112th Congress, 2011–2012
To amend the Legislative Reorganization Act of 1946 to reduce the rates of pay of Members of Congress by 5 percent and eliminate future cost-of-living adjustments in such rates of pay.
The Republicans repeatedly sate that they will oppose all attempts at raising taxes (especially on the 'rich'). Instead they favor 'closing loopholes'.