Special Tax Status for Non-Profits?

Non-profits in America get several tax benefits:

  • Contributions to them can be deducted by donors.
  • They do not have to pay sales or property tax.
  • Exemption from corporate income tax

Should they?

There’s a number of problems with this.  One, it makes deciding what is and is not a non-profit really important.  I’m fine with government subsidies (which is what tax breaks are) to help poor people eat, but not for rich people’s entertainment.  Those two are easy to distinguish, but there’s a lot of room between homeless shelters and operas, and I’m uncomfortable with the government drawing the line. Or what about charities that have beliefs you find abhorrent?  Bob Jones University lost its tax-exempt status in 1983 due to its ban on interracial dating, and fear of a repeat apparently drives a lot of the religious objection to same sex marriage.  I think people who oppose interracial dating or same sex marriage are wrong and should be shamed, but I’m really uncomfortable having that much money riding on values judgments by the government.

The sales tax thing isn’t that big a deal, as witnessed by the fact that a lot of charities don’t even bother with it.  But property tax is.  It starves the tax base of municipalities with a large percentage of land occupied by non-profits.  It’s something of a problem in DC and an enormous one in some university towns, especially if the surrounding area is poor.  That’s hard to stomach when prestigious universities have endowments in the billions and a good chunk of their work is making the rich richer.  Lack of property taxes pushes charities to buy property when they would otherwise rent (which means it benefits only those charities with consistent funding), and to occupy more valuable real estate than they otherwise would.

I like that I get a tax deduction for my donations, and I’d probably donate less without that.  OTOH, it creates a distinct gap between “people organizing to do some good things” and Official Charity, which creates a barrier to entry.  It’s not a trivial barrier either- I’ve served in the leadership on both official (my old dojo) and unofficial (Seattle EA) charities.  Among other things, official recognition forces a fairly specific kind of hierarchy on you.   In Utopia of Rules, David Graeber talks about the strain his autonomous non-hierarchical collective experienced when someone had the gall to give them a car.  It ends with them destroying the car with a sledge hammer.

Now we see the violence inherent in the system.
Now we see the violence inherent in the system.

Removing the benefits of official incorporation would let more organizations find their natural structure, rather than a one size fits all government imposed one, and also lead to fewer car destruction parties.

My opinion on the corporate income tax is a post in and of itself, so let’s put that aside for now.  I think there’s a very good case for not exempting non-profits from property tax, and not making charitable contributions tax deductible.  I also think it would be extremely disruptive to abruptly switch, so we should ease over gradually, and the change should be revenue neutral.*

*People say I’m cynical but then I write things like “the government should raise this tax and lower another one so they get the same amount of money” so I don’t know what they’re talking about.

Links 8/28/15

My feeling on “awareness” as a charitable concept is that it should arise as a byproduct of something else (read: doing actual work), and if I see a charity promoting awareness I assume it’s a self aggrandizing waste of resources and they don’t really care about helping people.  This is very true about, say, the Susan G. Komen lighting up a record-setting number of buildings to raise awareness for breast cancer.  But it’s not always true.  This 99% invisible is about the original AIDS ribbon, which started at a time when HIV was excruciatingly taboo.  The ribbon advanced the ability of people to talk about AIDS, and in doing so accelerated the development of treatment options and increased the emotional support available to tens of thousands of dying people and those that cared for them.  Breast cancer was never as taboo as AIDS, but for a long time it was literally unspeakable in polite company.  Awareness was probably a good idea back then.

So I’m amending my position to “spreading awareness: a good idea if people will literally not talk about your issue.”

Yes, diet and exercise affect your weight.  But lab animals are fatter than their equivalents of 30 years ago despite provably identical genetics, diets, and activity levels.  I think it is time we consider the concept of an environmental cause.

It never occurred to me to wonder how hummingbirds got nectar out of flowers.  I was nonetheless delighted to learn they do so by way of grooved, spring loaded tongues. They also fly weird.  Good job hummingbirds.

Do you do your best work or feel your emotional best when you wake up hours before you want to?  Turns out children don’t either and if we want to keep up the pretense that school is about teaching them it needs to start later.

One criticism of Uber in Seattle is that they abandon people in the suburbs, because they don’t follow the law requiring taxis to send a certain number of cars to the suburbs even when the bars are getting out in the city and everyone wants a taxi.  Despite this, Uber actually serves the suburbs better than taxis.  They also maybe prevent DUIs.

The Argument Against Incrementalism.

Sometimes there are fights where one group says “iterative progress” and the other says “no, it’s all or nothing” (my interpretation).  For example, people that don’t like GiveDirectly because it reinforces capitalism, or whale treadmills because the whales need to be in the wild, or humaneness standards for farmed meat because it reinforces eating meat.

Twice now I’ve gone through airport security while they were in express mode, which means you get an x-ray rather than the pornoscanner, you can leave your shoes on your feet and your laptop in its bag, and there’s a k9 unit, which I assume is looking for bombs.  This is great because it’s faster and more convenient and spares me my usual protest groping*.  As an incrementalist, I should be happy about this, but I’m not.

My ultimate goal is not just “not get groped or irradiated”, it’s “stop spending billions of dollars to waste people’s time with absolutely zero compensating benefits”, and beyond that “not have a government for which this kind of toxicity is standard.”  However much I’m enjoying not taking my shoes off, this change does not get us any closer to the latter two goals.  I suspect this is what the [people I previously categorized as anti-incrementalist] felt about the incremental improvements I approved of: that they were harm mitigation at best but did not move them closer to their goals.  So I’m a lot more sympathetic to them now.

*I don’t know if the pornoscanners are actually dangerous or not, but I do know the TSA doesn’t know either and I will punish them for their decision however I can.

Review: The Hot Seat (Dan Shapiro)

Let me begin by describing something The Hot Seat does not do.  A while ago I read Never Say Die, about how society talks about old age.  Sometimes I would want to argue with its factual statements (“old women have no access to sex”), but feel immediately aversive.  Eventually I realized that this was because Never Say Die spent a long time deriding anyone who believed anything good about old-old age as delusional or mean.  I didn’t want to be delusional or mean, so even in the privacy of my own head I resisted arguing.  This is a bad tactic for finding out the truth.   You don’t win arguments by deriding people who oppose you, you win them with facts.  And the facts are that old people in nursing homes get a lot of STDs.*

A lot of business books do this too.  “Other people will tell all a company needs is a website and a mascot, but we’re not like that.  We think you should have a product.”  It’s not quite argument from bravery– more like argument against stupidity.  It often follows statements like “we won’t sugarcoat this” and “fancy new economy idiots/stodgy old economy losers believe…”.  The effect is to discourage critical thought about what they are telling you.

The Hot Seat does not do this, at all.  It gives you information- both legal rules and the unspoken ones, from funding to people management.  I think it would be useful for someone planning on starting their own company, but that wasn’t my use case.  I want to be an early employee at a start up, and want to be able to tell good start ups from bad.  Hot Seat isn’t a complete book for that, but it is a very strong foundation that will make it easier to assess if I’m getting good advice from other books.  It is also extraordinarily readable, to the point I would read it for fun.**

*When I went to look up the numbers I saw that they counted everyone above age 65 or even 50.  The book’s main thesis is that people take happy statements about the (upper class) young old and inappropriately apply them to the old old (80+).  So the author may not have even been wrong, but I don’t like the way she proved her point.

**Other books I read for fun:

But I don’t read finance for fun, so this is novel.

How Does Amazon Convince Anyone To Work For Them?

Amazon is in that club of employers (Google, Twitter, Facebook, Microsoft, etc), where working there functions as a stamp of quality.  Their employees are frequently cold called by recruiters working for other members of the club, middle tier companies, and start ups that cannot get enough people through their personal network.  Amazon pays very well relative to most jobs, even many programming jobs, but it does not pay as well as other members of the club.  The salary is just a little less than you’d make elsewhere, but equity and bonuses are backloaded such that many people are driven out before they receive the bulk of them.  The health insurance isn’t as good.  I realize paying for your own lunch is normal, but Amazon makes employees pay for a lot of things other companies offer for free, like ergonomic keyboards.  And then there’s the work environment.

How does Amazon maintain a talent pool equivalent to the other prestige club members while paying less?

This is anecdotal, but my friends at Amazon are much more likely to have come from unprestigious companies or schools than my friends at other club companies.  Working at Amazon doesn’t make them smarter, but it does provide widely-accepted proof of their intelligence that they didn’t have before, and can leverage into cushier jobs later.   In some ways Amazon’s reputation for chewing people up and spitting them out is a feature here, because leaving after 18 months raises 0 questions among other employers.

So my hypothesis is Amazon invests more in finding and vetting smart people who aren’t currently holding Official Smart Person Cards, and that part of employees’ compensation is getting that card.  In this way it’s like the US Armed Forces, which are grueling and don’t pay well but people tend to leave them with many more options than they started with.

I’m unconvinced this is a winning strategy.  Operational turnover is expensive, and bad working conditions decrease people’s productivity even when they’re well compensated.  But it does at least explain why it hasn’t collapsed already.

Links 8/21/15

A 3 part series in the New Yorker about Jehovah’s Witnesses and blood transfusions.  Summary: receiving blood is more dangerous than we think and outcomes would be better if we used various techniques to reduce the amount of donor blood patients needed (although they’d still need some).  These techniques were developed in part to treat Jehovah’s Witnesses.  This is why you tolerate weird and dumbSometimes weird and dumb pushes the establishment to invent things that help you too.

Logical Journey of the Zoombinis is out on mobile.  11 year old me is so happy right now.

The New York Times published an article on how awful working for Amazon corporate is. This is one of those times the response is more damning than the accusation.  A lot of their complaints were anecdotal, sensationalized bullshit- every large company has an employee onboarding process where they say CUSTOMERS! a lot, no one expects it to actually affect you.  They left out things I’ve heard from friends that are more damning- e.g. they quote you compensation averaged over four years, but it’s back loaded and a good chunk of people don’t stay that long.  It’s Jeff Bezo’s response– “Even if it’s rare or isolated, our tolerance for any such lack of empathy needs to be zero”- that I think really demonstrates the problem, because it betrays exactly the kind of attitude that would lead to exactly the environment described in the New York Times article.  It’s punishing middle managers for not protecting him from the consequences of the culture he created.

The employee defenses betray the same lack of understanding of what the problem really is-  “During my 18 months at Amazon, I’ve never worked a single weekend when I didn’t want to.”, “Last year, during all-hands, a very high ranking Executive said, verbatim: Amazon used to burn a lot of people into the ground. This isn’t how we do things anymore”  (source).  These are the words of people with Stockholm Syndrome.

Dustin Moskovitz explains why long hours aren’t even helpful.

The Future Soon

I’ve officially given notice at work and notified my team. My current plan is to wrap up my project, do a webdev bootcamp to round out my skills, and get a job that actually makes a difference in the world (there are some options I’m extremely excited about, although nothing is done till it’s done). But if that is not the best plan, now would be the ideal time to that find out. So if you have any suggestions on any of the following, please let me know:

  • Companies with EA-compatible missions looking to hire remote programmers.  I have extensive test dev experience (meaning I write code, not run manual tests, and currently I don’t even write many test cases, it’s all designing and implementing tools) and will have webdev experience.
  • Books I should read.  I’ve been reading a lot of business and start up books with the goal of evaluating start ups, but if there’s another field you think I should look into let me know.
  • Bootcamps.  My qualifications were: online, large group and pair programming element, and free of macho bullshit that treats suffering and learning as equivalent, and that appears to have left me with one, but more would be great.
  • Supplemental classes or technologies I should learn
  • Cool people I should talk to.  I appear to have caught that case of “frequent trips to the bay area” that has been going around Seattle EA so in person is an option in either area, and of course there’s always the internet.
  • Projects that could benefit from a short-term/part-time programmer or writer/researcher (similar to this blog or what I did for Charity Science).
  • Off the wall careers I should research.