Tuesday, September 28, 2004

Barnes tax question

It seems to me that much of what is being disputed is based on what has to be seen as Dr. Barnes' creation of a tax shelter. Trusts were a way for those with wealth the means to protect those with sizable assets from tax liability. Much of the discussion about the language of the trust should be seen as Dr. Barnes' conflict with the idea of a trust being part of the public good. Further research concerning this historical relationship should be looked at when determining Dr. Barnes' intent.

"To correct this situation, the 16th Amendment to the Constitution was ratified on February 25, 1913. Now, income taxes were a permanent part of the United States economy, and Congress could tax incomes however they saw fit.

In later years, the withholding tax was instituted, and with the increased employment during World War II, tax collections rose to forty-three billion dollars by 1945."
Tax history

What was the charitable reason for the trust that created the foundation and what language in the charter and bylaws directly indicate Dr. Barnes' intent? All non profit charities have to conform to the definition of the tax code to gain exempt status. Was this the tension that Dr. Barnes wrote to his lawyer about. Was he willing to give up control of his collection "for the public good"? Was he simply faced with a need to reduce his tax burden?

He clearly did not want to help artists by funding their work. He defined "art appreciation" in a very limited way. Was the promotion of education merely stated because it was the recognized reason for gaining tax exempt status? I have not seen any mention of any heirs to who the collection would have gone to. Was he childless? Was his desire simply to keep his collection together as a whole? What is the "public good" today?


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