- Obama takes aim at ‘corporate deserters’
- Dick’s Sporting Goods lays off 478 PGA golf pros
- Senators: Cease-fire must allow Israel to defend against rockets, tunnels
- Sierra Leone doctor fighting Ebola catches disease
- Iraq welcomes Russian fighter jets, helicopter gunships into ISIL fight
- John McCain laments: Obama’s ‘self-pity … is really kind of sad’
- GOP offer to fix VA gives $10 billion in emergency funds
- Paul Ryan offers to repair U.S. economic safety net with a single grant stream
- Kim Jong-un builds bond with Putin: $250M Russia-backed addition to key port opens
- Pope Francis meets Meriam Ibrahim, a Sudanese woman sentenced to death
Big Bird’s producer boasts well-padded retirement nest
Sesame Workshop reports $110 million in investments
Question of the Day
“When you’re looking at trying to produce major tax reform, it’s very hard to say this one company that puts Tickle-Me-Elmo on a T-shirt, they’re tax-free, and this other company puts Fred Flintstone on theirs and we’re going to tax the bejesus out of them,” said Dean Zerbe, a former top tax counsel to Sen. Chuck Grassley, who is now in private practice. “Congress needs to look very hard at why we are letting an entity be tax-free when they walk, talk and look like another entity.”
Mr. Mintz, Sesame Workshop’s chief financial officer, points to the extra money the organization spends on researching programs to ensure that they will benefit early childhood development, a far different threshold from regular market research that other child-targeted entertainment companies use.
“Each year, we spent between 10 to 15 percent of our total budget on education and research to ensure our content achieves it curricular objectives and to create targeted initiatives that address specific needs such as our military families’ project,” he said.
Those differences should be crucial for determining exemptions for nonprofits, in order to encourage charities to stay “within the four corners of their work and not bleed into business enterprises,” Mr. Zerbe said.
“What you’ve got is a tax code that is antiquated and never envisioned these charities to have these expansive business operations,” he added. “But now you’ve got charities that are raking in huge amounts of money and competing with for-profit business that are paying tax. It’s right to take a look at it.”
Mr. Grassley, Iowa Republican, former chairman of the Senate Finance Committee and now ranking Republican on the Judiciary Committee, has spent years scrutinizing the nonprofit sector and has urged Congress to consider whether many of these organizations should continue to enjoy the same tax exemption as other types of charities.
Mr. Grassley’s colleague, Sen. Carl Levin, the Michigan Democrat who chairs the Senate’s Permanent Subcommittee on Investigations, has sponsored legislation that would close a number of tax loopholes related to hedge funds and has openly criticized tax-exempt organizations use of offshore corporations to invest in hedge funds.
Last year, House Republican lawmakers asked the IRS to explain how the nonprofit seniors group AARP was able to protect millions of dollars of its earnings from tax levies even though the group sells things such as health insurance and hearing aids and is making huge profits.
Tightening the rules on nonprofits could produce tens of billions of dollars over the next decade, Mr. Grassley estimates — real money that could be used to lessen the tax burden on individuals.
“Let me be clear I am not referring to those charities that are on the ground feeding the hungry, sheltering the homeless,” Mr. Grassley said at a 2011 hearing. “I’m talking about those charities which there may be no discernible difference between commercial, for-profit entities.”
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
About the Author
Susan Crabtree is an award-winning investigative reporter with more than 15 years of reporting experience in Washington, D.C. Her reporting about bribery, corruption and conflict-of-interest issues on Capitol Hill has led to several FBI and ethics investigations, as well as consequences for members within their caucuses and at the ballot box. Susan can be reached at email@example.com.
- GOP senators want IG probe of Sebelius' 'Obamacare' fundraising
- Teaming up with Christie, Obama says Jersey shore 'back in business'
- No Moore: Obama flubs name of Oklahoma city devastated by tornado, calls it 'Monroe'
- Obama to Okla. tornado victims: 'We have got your back'
- Aide involved in Benghazi talking points scrubbing promoted by Obama
Latest Blog Entries
TWT Video Picks
By Michael Widlanski
Leveling the battlefield to aid terrorists enables evil to fight on
- 'We're coming for you, Barack Obama': Top U.S. official discloses threat from ISIL terrorists
- NAPOLITANO: What if our democracy is a fraud?
- Hamas rejects Kerry's call for cease-fire; Fears grow others could join fight against Israel
- Evidence shows Russia firing artillery into Ukraine: Pentagon
- Obama orders Pentagon advisers to Ukraine
- Algerian plane diverted due to storms, second aircraft: 116 missing
- Cutler wins endorsement from gun control group
- 'Straight White Guy Festival' supposedly set for Ohio park
- HUSAIN: Fleeing Iraqi Christians find safe haven at the Shrine of Imam Ali
- CARSON: Costco and the perils of mixing politics and business
Obama's biggest White House 'fails'
Celebrities turned politicians
Athletes turned actors
20 gadgets that changed the world
Fighting in Iraq