In typical Washington DC there is discussion around the margins, this time for reforming our Not-for-Profit organizations. The tax law gives certain organizations the right to operate independently and with limited liability, similar to corporate law, but without having to pay federal Income Tax.
The current debate is around political-type Not-for-Profit organizations, and the perceived need for campaign finance reform. Some say get government out of the funding of political campaigns all together, others say make all campaigns government-funded, still others say be more liberal or less liberal with the tax law allowing Not-for-Profit organizations to sway political outcomes.
But the problem around NFPs is bigger than our stagnant two-party political system. NFPs distort local economies. NFPs dont have to pay local real-estate taxes (local law follows federal law). This means the biggest owners of property in our American cities are religous organizations and universities (look around if you don't believe me. And if you live in DC like I do, take a look at all the large NFP international organizations). These institutions compete unfairly for valuable land.
Private homeowners and apartment dwellers in cities, and small businesses in the neighborhoods, have to pay the real estate taxes for local services that these large "Not-for-Profits" dont have to pay. Why should those who dont follow any organized religion or cant afford or arent interested in formalized higher-education pay for those who do have the time and interest for these large, State-sponsored institutions. Additionally, tax law allows individuals to 'write-off' a portion of their gifts to these institutions, artificially inflating their size.
This shows - yet again - how government policy which intends to do good can actually hurt those it presupposes to help. A complete revision of our Not-for-Profit tax law, or at least requiring the payment of local taxes, would help create a more level playing field for those in all walks of life.
And I am not saying this just because our car mechanic - and his neighbor who had auto repair workshops for underclass kids - was driven out of business when the local "non-profit" theatre company grossly expanded into his garage space !!