July 27, 2000 | Read Time: 1 minute
Writing Off Ideas: Taxation, Foundations, and Philanthropy in America
by Randall G. Holcombe
The author, an economics professor, calls on Congress to scrap the estate tax, which he says pushes wealthy people to create foundations in order to shelter assets.
“In a free society, if people want to endow foundations with their fortunes, there is no good argument for trying to prevent them, but there are good arguments against encouraging them to do so, as is the case with current tax laws,” writes Mr. Holcombe, who teaches at Florida State University, in Tallahassee, and is a fellow at the Independent Institute, in Oakland, Calif., which financed this book.
The arguments against creating more foundations, in Mr. Holcombe’s view, are clear: Foundations too often stray from the intent of their benefactors, they devote too much attention to social theory instead of financing direct services, and they dodge public accountability.
Mr. Holcombe examines the influence that current tax laws have on foundations, identifies what he sees as a predominantly liberal bias in foundations’ grant making, and argues that foundations are held accountable to no one. He discusses options such as additional government oversight and setting mandatory term limits for trustees — but rejects both.
“The real problem is not an underregulation of foundations,” he writes, “but rather a tax system that encourages people to create them.”
Publisher: Transaction Publishers, 390 Campus Drive, Somerset, N.J. 08873; (732) 445-1245 or (888) 999-6778; fax (732) 748-9801; http://www.transactionpub.com; 284 pages; $34.95 cloth, $24.95 paper; I.S.B.N. 0-7658-0013-6 cloth, 0-7658-0680-0 paper.
