It was very encouraging to learn earlier this month that the Honorable Paul LaPage, Governor of the State of Maine, had called ‘bullshit’ on non-profits. Non-profits have been getting away with the taxable equivalent of ‘murder’ for years. They have been increasing their footprints, endowments and the compensation of their top executives to astronomical levels and doing it without paying income or real estate taxes. The non-profit tax loopholes enjoyed by super rich organizations like private universities, hospitals and research foundations are just as unfair to normal taxpayers as the corporate tax loopholes used by major companies. The rich non-profits and corporations are gaming the system and not paying their fair share of the tax burden.
In most states and local jurisdictions, non-profits are exempt from paying income and local real estate taxes. Maine is now going to require all non-profits, except places of worship, cemeteries and governments, to pay property taxes. That means that rich hospitals, schools, colleges, universities, and foundations etc are going to pay their fair share of the cost of local services like police, fire and garbage.
Rich non-profits like hospitals, private schools, colleges, research institutes have been gaming the system for years and getting away with it. There are eight non-profit hospitals in the Lower Hudson Valley, where I live, that pay their CEO’s more than $1M per year. These same hospitals pay no income or real estate taxes. They are getting a free ride on roads, bridges and tunnels paid by the private sector, i.e., regular stiffs like you and me. At White Plains Hospital the CEO gets almost $2M and is responsible for 300 hospital beds – that means that $6,666 per bed per year has to be earned by the hospital just to pay one top administrator. The other 12 members of the ‘management’ team earn a combined $9 million – these levels of compensation are ridiculous in comparison to the risk and return of their jobs. Any organization that can pay its top people that well is not a poor charity and it should be taxed accordingly – at least in terms of its share of local services like police, transportation infrastructure and fire.
Hat’s off to Governor LaPage of Maine.
Leave Your Comments