Disaster or Hyperbole

I can think of some, particularly around charities: funding for pet causes often benefitting self-interests, instead of money going to where its most needed as determined by the government through a democratic process.

Re "What are some examples of legal but immoral behavior you two abstain from?" - too far afield from real estate and too potentially inflammatory. This is how I got sucked into Streeteasy to begin with - come for the real estate and stay for the philosophy! I am older now and only marginally wiser, but I have decided to refrain from engaging in discussions of some of the more divisive issues of our time online.

@nada: Immoral, yet legal: Giving money to churches that fail to report sexual abuse by their staff to government authorities. How is this not a form of directly funding illegal behavior? (no, you cannot argue that your donation went to feeding the poor, while it was somebody else's donation that went to funding abuse).

@krolik: Most of my charitable donations are in fact or my pet causes - the vast majority to the performing arts. My only self-interest is that I get a (tiny) tax benefit, and an often enjoyable evening of entertainment. I'm not running a self-funded foundation that employs my daughter as director, or giving grants to my son's dance troupe (both understandable, if reprehensible behaviors).

Starting in the 1980s and through the AIDS crisis, a lot of very self-interested people raised money and directed attention and funding to medical research and providing care that would have otherwise gone unfunded and un-provided had the government been the sole arbiter of where to allocate resources.

@Krolik - the challenge with purely democratic process for funding everything is that we have something of a winner-takes-all model. So in states with permanent majorities, you could have say 48% of population in favor of a thing, but it gets $0 funding forever, not the 48% proportion of total dollars.

Think about like any sort of abortion related funding at the federal level with the Hyde Amendment.
"In U.S. politics, the Hyde Amendment is a legislative provision barring the use of federal funds to pay for abortion, except to save the life of the woman, or if the pregnancy arises from incest or rape."

Or if you think needle exchange programs are good, that also is barred from federal funding.

Your charitable giving might offset things you disagree with at the federal or local level.
For example, not everyone who lives in FL/TX is a red cap wearer, but they should be allowed to make charitable donations to causes which their states don't fund right?

Or again, separation of church & state. They get tax exemption benefits, but they exist based on charitable funding. If you are a member of some faith, you need to fund it as the government can't and shouldn't.

Not saying it is black and white. I am not solely against charities, and I am on the board of one. :-)

Here is a moral framework that I think is pretty good:
Bright-line rule - one should feel free to maximize profits/minimize taxes by following the letter of the law as long as
1) there is some (not horribly broken or corrupt) process to update these laws to reflect wishes of the public
2) there are not some horrible externalities from these actions (cancer-causing river pollution, etc)
3) no monopoly involved
4) there are no minors and individuals with decision-making impairments involved or harmed
5) I am sure there exist some other worthy exceptions, like the minority point Steve made above

Pet causes are fine and should get funded, but why are they necessarily deserve an uncapped tax deduction from the government? Also, enforcement around purpose and activities of charities is too weak. I disagree strongly with this law, but I think it is too complicated of a point to convey to the general public.

Aaron2>> How is this not a form of directly funding illegal behavior?

I hear what you’re saying, and I don’t disagree. But in case you’re not aware, the funding you provide to the govt pays for a whole lotta illegal shit that gets covered up. Not saying it’s the same thing, just food for thought.

>> I can think of some, particularly around charities: funding for pet causes often benefitting self-interests

Pet causes, legal. Self-interest, there are laws and regulations around this. File those who violate as tax cheats.

>> instead of money going to where its most needed as determined by the government through a democratic process
That sounds self-contradictory. Didn’t that democratic process yield a government that decided money is most needed, to a certain extent, in whatever rando public cause its taxpayers think is best? Allowing people to direct some of their tax dollars is somewhat democratic. Perhaps in addition to having a box that directs $3 or whatever of taxes to the public presidential campaign fund, they should have more. “Mine to maintaining the nukes, please!” But this isn’t even that. It’s more of a govt matching program. For every dollar you give to a public cause, they’ll match it with one of their (your?) dollars!

>> Pet causes are fine and should get funded, but why are they necessarily deserve an uncapped tax deduction from the government?

May you have the privilege of being in a position for figuring this one out for yourself, but it is not uncapped. Depending on the nature of the contribution and recipient, the deduction is limited to a percentage of AGI. Typical scenarios are 30% or 50%. One corner exception is 100% for farmers and land for conservation.

So the matching program comes with a hitch. “For every $2 you give us, we’ll redirect one of those dollars to the public charity of your choosing if you send them a third of your dollars”. The govt will never send other taxpayers’ dollars, nor will they match with all your taxpayer dollars.

In the meantime, those 1 bed room rentals remain crazy hot.

What makes you say that? Not disagreeing, just wondering how you’re reading it.

@nada - re no cap for land conservation, I know you don't like to read books, but "Billionaire Wilderness" is a good read on this issue.

TL;DR

With a Federal tax code that spans 5M words by some estimates, can you really blame people from finding parts that maximally align with their morals and providing advantage, and then turning it up to 11? The original sin on this stuff is the carveouts legislatures stuff into those 5M words for ostensibly good reasons. I mean, who would find fault with making it easier for farmers donating their land for conservancy?!?!?

It’s not capped from organization’s perspective.

You mean the fact that income & gains generated by a charitable organization owe no taxes?

That too, and organizations paying no real estate taxes while consuming municipal services to generate the tax-free income... They can solicit from multiple individuals, each under the cap, and overfund a cause that might "deserve" funding, but maybe not as much as some other cause.

For example, Harvard collects donations from generationally wealthy alumni, hoards funds to grow its endowment and funds various extras for legacies and donor kids, while state schools that educate a lot more people are experiencing budget cuts and are spending multiples less per student.

In general, all the tax exempt organizations are considered to exist 'for the public good', but are things that the government can't or won't fund at levels that make them effective. So individuals and the organizations are incentivized through tax breaks to exist and thrive. Everybody will have horrifying examples of things that probably shouldn't be (e.g., sports leagues & real estate boards as 501(c)6s), and it has certainly resulted in significant distortions (looking at you, Big Ivies), but there is virtually zero interest in refashioning that landscape to something more equitable (maybe except for the PGA, given Ron Wyden's bill).

@nada: Yes, coming from a family of military and CIA people, I'm well aware of some of the revolting places my tax dollars find themselves.