Taxing the non-profits. (Baltimore: condo, day cares, homes)

[cooperpd]

Our City is overburdened by the increasing demands for public services. The Federal government has shifted many social programs down to the state and local levels. The result has been -- and will continue to be -- an enormous burden on Baltimore's already strained budgets.

There is an untapped resource and it is time citizens step up to the plate and demand everyone pay their fair share. Baltimore has a huge number of nonprofit organizations -- religious, charitable, scientific, public-safety-oriented, literary and educational. These organizations own a vast amount of untaxed property and have untaxed substantial incomes. Why are they not merely subject to the same taxes as the rest of us? These are difficult economic times, and these groups should not be shirking their civic responsibilities.

In 1983 when, in Regan v. Taxation with Representation, the court held 8-3 that tax exemption was equivalent to a tax subsidy. The question before the court involved tax exemption for nonprofit organizations -- religious, charitable, scientific, public-safety-oriented, literary or educational. Justice William H. Rehnquist spoke for the court: "Both tax exemptions and tax deductibility are a form of subsidy that is administered through the tax system. A tax exemption has much the same effect as a cash grant to the organization of the amount of tax it would have to pay on its income." If tax exemption is a form of subsidy, then non-profit property tax exemption is a clear violation of the establishment clause of the First Amendment.


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[emsgoof]

Well, as I read somewhere else, a lot of these non-profits are ridiculous. Stuff like the TV-angelists who have their multi-million dollar private jets, and billion dollar made-for-TV "churches" and huge homes, it's an insult to the original concept behind the non-profit idea. The problem is differentiating the ones who actually need that non-profit tax exemption (like small museums who don't look to make a profit, they're only trying to preserve history) and people like the TV-angelists who want every tax advantage they can get to make more money.

[cooperpd]

One of the biggest obstacles is there is no requirement for non-profits to report their holdings and incomes. Like many big corps, they talk about being transparent, but the truth is they are cloaked in secrecy. Joe Citizen knows that non-profit orgs that run tax exempt housing, day cares, recreation centers, etc are hiding behind that exemption. Sorry folks, those are money making ventures and should be on the tax rolls like everyone else. Don't want to call it a tax...call it a PILOT (payment in lieu of tax)...same thing and should be equal to the true value of the holding/income.

As for the religious groups...I just don't see why any congregation or parish (or whatever you call it) would condone the extravagant lifestyles of their leadership. What religious leader needs to drive or be driven around in a Rolls Royce or limosine for that matter? --- and before the zealots start...yes, I know scripture does not say people should not have wealth.....It is what you DO WITH IT that matters most.

[carolott]

Originally Posted by cooperpd

One of the biggest obstacles is there is no requirement for non-profits to report their holdings and incomes.

This is actually not true. Nonprofits are required to file Form 990 (Return of Organization Exempt from Income Tax) with the IRS, and they are also required to make available a financial statement (or develop an annual report) that is viewable by anyone who walks through the door and asks to see it.

I do agree that some nonprofits don't do this, and shame on them. Like any other corporate charter, they are required to follow a specific set of state and federal laws.