Control Stock: Corporate Power and the Tax Reform Act of 1969
In 1969, Texas Rep. Wright Patman and other members of Congress believed that a significant number of donors who created private foundations had little interest in philanthropy. Faced with high estate tax rates that would force their heirs to liquidate the companies they had built, these entrepreneurs established private foundations, endowed them with sufficient shares of their company’s stock to create a controlling interest, and then appointed foundation boards of relatives and friends to perpetuate family control of their businesses—all in the name of philanthropy. The Tax Reform Act passed that year sought to put an end to this practice and build a higher wall between the market economy and nonprofit institutions in civil society.
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