This type of misbehavior is widespread, too. These foundations are not limited to the ultra wealthy. Tons of even moderately rich people (say, tens of millions in wealth) take advantage of these vehicles. Pumping their income into "charity" where charity is not Habitat For Humanity, but "MR JOHN B ENTREPRENEUR CHARITABLE FOUNDATION LLC". The foundation is run within a millimeter of the law, and basically funds the owner's lavish lifestyle tax-free. It's such an obvious scam but since it's just barely legal, nobody bats an eye. And if anyone questions the practice, you have people coming out of the woodwork saying "why are you against charities like Habitat For Humanity?"

Probably a fair complaint. I’d question whether enough people with foundations take bald-face risks with enough of the assets to be relevant to tax policy.

More pedestrian stuff (eg expensing a conference in Seychelles) definitely slips through, but we could make the same principal-agent complaint about business expenses or other settings where one person gets to spend money from different buckets that are taxed differently.

I’d challenge the notion that the rules are unenforced though - someone will have questions if you’re living in a house your foundation purchased or somesuch. At the very least several people with an obligation to know better and much less to lose we’re going to be very nervous.