One of our problems – and a big reason for our ‘Great Recession’ – is government trying to manage the economy rather than letting free markets work their magic and create jobs.
The Charlotte Observer and the Raleigh News and Observer have been reporting on an example of government using the tax code to manage the economy.
Politically, it’s hard to argue against tax breaks for hospitals. It’s even harder to argue against tax breaks for ‘non-profit’ hospitals. After all, who can fault a ‘non-profit’ hospital for managing our flawed tax code to its advantage? But in this case the term ‘non-profit’ is a bit misleading.
Our community is blessed with two hospitals. One is for profit and one is ‘non-profit.’ However, under our current tax code the ‘non-profit’ pays no property taxes (or income taxes) while the for profit pays approximately 3/4 of a million dollars in property taxes every year.
But, you say, non-profit hospitals treat patients who are needy and can’t pay and that’s why they receive special tax breaks. So what’s the big deal?
Well, it turns out, for profit hospitals and the non-profit hospitals both care for needy patients. If you’re poor and get sick and go to the emergency room, neither hospital can turn you away.
Last year in North Carolina ‘non-profit’ hospitals made hundreds of millions of dollars in ‘profits.’ Twenty-five executives at non-profit hospitals earned over $1 million. One non-profit CEO made $8.7 million in salary and compensations. Theoretically, if you pay the executives enough, any corporation could be a ‘non-profit’.
According to the newspapers, the tax breaks given to the non-profit hospitals are a lot bigger than the costs of the care they provide the needy and indigent.
How did this happen? The answer is politics. The tax exemptions for ‘non-profit’ hospitals’ are the result of lobbying and political clout. There’s no point blaming the non-profit hospitals. That’s the way our tax system works and they’re naturally taking advantage of it. But there has to be a better, more efficient system that does not favor one hospital over another and which rewards hospitals for the actual care they provide to the indigent rather than granting them across the board tax breaks whether they provide indigent care or not.
When politicians and lobbyists go to tampering with the tax code the result is a mess. Our current ‘politicized’ tax code is inefficient, hurts our economy and manipulates the marketplace which ultimately costs us jobs. So let’s get politics out of the tax code and government out of managing the economy. Who wants politicians picking winners and losers? It’s time to start over and create a tax code that levels the playing field, rewards efficiency (instead of subsidizing waste), and lets the free market create jobs.