Charitable Foundations, How the Rich Avoid Paying Income Taxes!

What antagonizes most Americans about the income tax is that they know that the rich are not paying their fair share. The news media, most of who are rich, attempt to withhold the knowledge of how the rich avoid paying their fair share. The average American is ignorant of how the rich avoid paying their fair share despite the fact that they know it is happening.

As part of the IRS Code there is an exemption from paying taxes that the rich can afford to take that the average income person cannot. It is a 501©(3) tax exemption. Simply put, it is the exemption that charitable organizations take. Why would rich people take the vast majority of their incomes and place it in charitable foundations? The answer is simple, because they own the foundations and can use the wealth that is in the foundation virtually to their heart's content. While a charitable foundation is required to use five percent for expenses and donations, they use that money for things that have absolutely nothing to do with charity. For instance, the charitable foundations, they, own the homes they live in and write off the money that they pay the people, such as housekeepers and gardeners, to maintain their homes.

I don't know how others feel, but if I were making millions of dollars every year, I would place the vast majority of it in a charitable foundation that I would establish and own. That way, I would be able to write off virtually all of my income, including ordinary living expenses, and pay nothing to the government. Doing that is a whole cheaper than paying thirty five percent of it in income taxes to the government.

People of ordinary means, who attempt to do what the rich do, are sued by the IRS and can't afford the lawyers fees it takes to defend their claim that they are a charitable foundation. The rich, when on rare occasions they are sued by the IRS for falsely claiming themselves to be charitable foundations, spend the money on lawyers to defend their positions and even write that money off. Ordinary people can't afford to do that.

When a rich person makes the claim that he/she paid three, four, five, etc. times as much income tax as the average person you can bet that he/she had a total gross income of twenty, twenty-five, thirty, etc. times as much as the average person in total gross income and should have paid twenty, twenty-five, thirty, etc times as much as the average person in income taxes. While most charitable organizations, such as churches, the Salvation Army, the Red Cross etc., are truly charitable organizations, the rich are simply using the exemption to avoid paying the taxes that they should on their income, and using it for their own selfish purposes. The government (Congress) does nothing about the tax scheme that the rich use because they know which side of the bread their butter is on. If I could find the amount of money that the rich have avoided paying taxes on since the income tax was instituted, I would post it here so that you could see how much money they should have paid to the government. I'll bet it is in the T..., that is T, as in Trillions, of dollars. Leona Helmsley didn't spend time in prison for not paying taxes, she spent time in prison for helping to expose the fact that the rich don't pay taxes to us "Little People."

From the IRS code:

§ 501. Exemption from tax on corporations, certain trusts, etc. (a) Exemption from taxation An organization described in subsection (c) or (d) or section 401 (a) shall be exempt from taxation under this subtitle unless such exemption is denied under section 502 or 503.