Thursday, March 12, 2009

Paying Taxes on Mishloach Manot?? What about maaser?

In a comment on a previous post, an Anonymous commenter writes:
Your going to have a field day with this one!!!
Rivevos Ephraim: Rav Yaakov Kamenetzky Paid Taxes On Mishloach Manos!
There is a chiyuv to give maaser from your income. If you receive an expensive mishloach manos, do you need to give maaser from it? This was the question asked to Rav Ephraim Greenblatt (Rivevos Ephraim 6:389), rov in Memphis and talmid muvhak of Rav Moshe Feinstein zt”l.Rav Greenblatt answered that he saw in a sefer, called Uvacharta Bachaim, that Rav Chaim Kreiswirth, the Antwerpen rov, said in a hesped for Rav Yaakov Kamenetzky zt”l, that Rav Yaakov would report as income and pay taxes on mishloach manos that he received. If so, then similarly one should give maaser. He concludes by saying that nevertheless the matter needs further research.
Titein emes l’Yaakov!
Lets hear You opinion on this one.
I don't know whether the above story is true, or was misheard and amplified for a eulogy. But I am not sure that the laws for taxes necessarily parallels the laws for maaser. One is American tax law, and the other is halacha.

In terms of American tax law, it would seem at first, second, and third glance that no taxes are required on gifts. While there is a gift tax, it is on givers rather than receivers, and there is an exemption for up to $13,000 (in 2009) for the giver, for each person he gives to.

To cite my friend Eliyahu on this matter, who confirms this, and discusses some possible ramifications, or not, to maasar kesafim:
I'm not sure I understand the context, but, gifts that are above the $12,000 threshold (per receiver; you can give the 12k to many different people without paying gift tax), or 24k threshold for a married couple, are taxable to the giver as a separate tax called "gift tax." The receiver does not have to pay income or any other type of taxes unless it was compensation for some service (in which case it's not a gift). Unless his shaloch manos was somehow worth a few thousand dollars. My own personal opinion regarding the minhag of Maaser, is that hashkafically a gift should be subject to Maaser since God can be mifarnes people in any way he chooses. Halachically, I don't know how Chazal patterned the minhag (which was never fully accepted) to real Maaser. On the one hand, the Leviim do have to give Maaser from their Maaser to the Cohanim. On the other hand, there are other required agricultural gifts which do not require Maaser to be taken from them.

(I wonder what if you have to pay maaser on theft :) I guess it's not yours or you have to pay it back (don't know the halacha/lomdus) so there's no need. Then maybe you should pay if he's mochel.)

In any case, the question of chiyuv of maaser doesn't really relate to the misunderstanding of the tax rules (if indeed the story was accurate). I don't see why Rabbi Greenblatt related the two.

Indeed, it is a fair question whether Rav Yaakov Kaminetzky misunderstood the tax rules. For while there is a chiyuv imposed dina demalchusa dina, this is for things which are indeed the law of the land. Even though Vice President Joe Biden said it was patriotic to pay more taxes,

it is by no means a chiyyuv, or a middat chassidut, to put money in the hands of the federal government which, my their explicit rules, they say you do not owe. Indeed, they already received taxes when the giver earned that money from his job, as his income taxes. And when he purchased the mishloach manot, he paid sales tax on it. Must it be that every time there is an exchange of goods, state or federal gets a cut?

My guess is that if the story is true, then Rav Yaakov Kaminetzky merely misunderstood tax law, as most Americans do, and he thought he was doing the honest thing. He should have gotten an accountant, or a better accountant. But of course no other Jewish person should feel compelled to follow him in this, at least in terms of American taxes.

There could be other reasons why Rav Kaminetzky paid the taxes, it seems to me. Specifically, the recipient and giver can agree among themselves that the recipient should be the one to pay gift tax, though again, this is only when it exceeds the threshold. Also, only a true gift is tax-free under this rule. If it is from an employer to an employee, with the understanding that it is compensation of sorts from previous work, or as an inducement to future work, then it may indeed be taxable, even under the threshold. One might be able to form an argument that since Rav Kaminetzky had a relationship to these people, and they might have felt compelled almost to give the gift because he was their rav, that it is compensation for past work or future work; and since they clearly won't be paying the taxes, since they would not regard it as such, Rav Kamenetzky decided to take it upon himself to do so. It is a kvetch, but it might just be kvetchable.

The idea in Rivevos Ephraim seems to be that if we see people giving income tax on it, then we see that it is considered "income" in our minds, and that should transfer to our maasar kesafim. I don't know that that follows, but I am also admittedly no expert in these halachos. But if it is clearly not taxable, then the whole analogy does not start.

Another possibility is that Rav Kaminetzky took these actions knowing that others would take note of them. Not out of a lack of humility, ch"v, but as a form of guidance. His followers would take note, and hopefully be scrupulous and honest in their business dealings and in their taxes. To cite a commenter on Vos Iz Neias who put two such stories together:
Second, these talmidim of the Rav are Litvishe Misnagdim. When it came to financial dealings with non-Jews, their gedolim have always had an almost pathological sense of honesty. The Chofetz Chaim tore up stamps when he sent a letter by a shaliach, lest he cheat the Tsar out of a few kopeck’s worth of postage. Rav Aharon Kotler would pay for two seats on an empty bus from Brooklyn to Lakewood, so he could fall asleep in good conscience. Rav Yaakov Kamenetzky and Rav Moshe Feinstein grew furious at the slightest hint of yeshivos being less than honest with the US government.
I don't know whether the Chofetz Chaim really did tear up stamps, where it seems clear that even the Tzar would not consider it cheating. If he did, it was quite possibly for a good reason, including setting an example. If not, then as another story has it, they don't tell these stories about me or you, so it still attests to fine character. But if people are indeed making up these stories, it also can sometimes convey unintended messages; it might well be tipshus, and not a middat chassidut, to donate money to the Czar where the law does not require it in the least (and officials at every level would laugh at this); and attributing such actions to R' Yaakov Kaminetzky, or Rav Aharon Kotler, or the Chofetz Chaim, hijacks their good name and trades upon their expertise in Torah to advance a position that they may not have agreed to.

Note: Obviously, none of this is halacha lemaaseh. Consult your local Orthodox rabbi, and your accountant, before acting on any of the above. :)

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