Government Spending

Cities Shake Down Nonprofits for Property Taxes "voluntary payments" Linked to the Value of Their Property


Boston's new tax assessor

When cities are not forking over millions to fund the culture inferiority complexes of their favorite billionaires, they are, naturally, complaining about being out of money. And as field researchers have repeatedly observed, politicians facing empty coffers bear a striking resemblance to raccoons on trash day.

The New York Times today showcases the latest fad in municipal raiding:

As recession-racked cities struggle to balance their budgets with everything short of feeling behind sofa cushions for loose change, a growing number are seeking more money — just don't use the word taxes — from nonprofit institutions that occupy valuable land but by law do not pay property taxes. […]

Boston has been sending letters to its largest nonprofit institutions this year, telling them the value of their land and asking them to begin making annual payments that would eventually rise to a quarter of what they would owe if they paid property taxes. […] And the mayor of Providence, R.I., Angel Taveras, cited Boston's example this month when he called on nonprofits to pay more money to the city.

"Every citizen, every city worker, every taxpayer, every business and every organization — including tax-exempt institutions — must share part of the burden of saving our city," Mr. Taveras said in his budget address.

You will surely enjoy the euphemisms deployed in these shakedowns:

I think the most important conclusion is that this should be a collaborative process

While Boston has long collected voluntary payments from its nonprofit institutions, it has done so haphazardly, with some universities paying millions of dollars, while their peers paid little or nothing. So Boston's mayor, Thomas M. Menino, convened a task force that studied the issue for much of last year and decided to try to establish guidelines for the voluntary payments. This year the city is trying to collect voluntary payments from all nonprofits with property worth more than $15 million. The payments will eventually rise to a quarter of what the nonprofits would pay in property taxes if they were taxable, with the provision that they can get credit for up to half of the money they owe by providing quantifiable "community benefits" that directly help city residents. By the time the system is phased in, the city hopes its annual payments from nonprofits will rise to $48 million from $15 million. […]

A study last year by the Lincoln Institute of Land Policy, a research institute in Cambridge, found that the voluntary payments had already been made in at least 117 municipalities in at least 18 states. But Daphne A. Kenyon, a visiting fellow at the institute who was an author of the report, said more cities were expressing interest in such payments as the fiscal crisis had continued, views of nonprofits had evolved and the antitax climate had grown more pronounced in many places.

"I think the most important conclusion is that this should be a collaborative process," Ms. Kenyon said.

Ah yes, the "collaboration" between the people with the guns and the people with the money, and the "voluntary" contributions of the latter. Symbiotic, really.

Just why?

Stories like this–complete with the lament that "more than half of Boston's land [is] exempt from property taxes" (damn those elite universities!)–I think go a long way toward explaining why Americans so consistently place tax hikes at or near the bottom of proposed solutions to the we-are-out-of-money problem (see the Reason-Rupe Poll for more numbers on that). Until governments stop handing out corporate welfare to billionaires and unaffordable pension promises to their public sector union allies, and start taking such pre-preliminary steps as selling off city-owned golf courses, Americans are going to have a hard time believing that we have anything other than a spending problem, and a harder time still being treated by our various governments as little more than potential revenue centers.

Katherine Mangu-Ward interviewed the Philanthropy Roundtable's Adam Meyerson about political pressure on nonprofits back in the March 2010 issue.

NEXT: Reason Morning Links: Kochs vs. Satirists, Publishers vs. Google, Reds vs. Public Sex

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. And Morry’s wigs DON’T COME OFF!!!

    1. My of my favorite all-time movies.

      1. Ummm, “ONE of my…”

  2. Nice charity you got there, be a shame if something happened to it.

  3. This shouldn’t come as a shock to anyone. Non-profit organizations, and private charity reduces dependency on the state. I’m surprised that this didn’t happen sooner.

  4. You got money for your bullshit colleges and hospitals and orphanages and old folks homes don’t you? I gotta watch you running that shit in my city all night long, don’t I? You got money for that, but you don’t have my money?

    1. Why the fuck should libertarians support an institution that has more money than God, like Harvard, being exempt from paying property taxes when every janitor and waitress who lives in a Cambridge home inherited from family is on the hook to pay every year?

      I thought libertarians believed in equality before the law.

      Churches and colleges should pay taxes on their land, just like individuals.

      1. Then change the law and make it that way. Don’t go around extorting people like gangsters. Rule of law, try it sometime.

        1. Agreed with both of you. There’s no good reason non-profits should be exempted from property taxes (unless you’re the sort of person who believes that “profit” is evil and thus non-profits are sanctified, and most of us don’t fall into that category). At the same time, there’s an honest way to go about it and a corrupt way, and Boston seems to be choosing the latter.

          1. I think Boston inherited from their Puritan founders.

          2. Don’t like the thuggish tactics by petty gov agents but I do think it is time to cancel all non-profit, tax exempt entities including Churches. Let everyone pay a share to support the leviathan, vampire squid government. This should help these organizations to understand the penalty imposed on the rest of the taxpayers.

  5. This has been going on forever, at least in some states. The term I’ve heard used is “in lieu of” payments.

    Personally, I think we should get rid of the income tax exemption for non-profits. Most of them have pretty small margins anyway, so there wouldn’t owe that much and should be able to adapt, and with a little foresight could keep their income tax bill low by making sure they are blowing any surplus on their allegedly charitable mission.

    Full-on property tax would be harder for many to adapt to, since it comes off the top line, not the bottom line, and would actually reduce the funds available for the mission.

    1. The article reffed PILOTs — Payments In Lieu of Taxes.

      Wouldn’t any profits left over by most NPs go immediately toward some presumably tax-free endowment/nest egg? Meanwhile, it’s not as if Uncle Sam and his state/local cousins aren’t getting a cut of the salary action & much besides….

      1. I don’t think eliminating income tax exemption for non-profits would be a big money-raiser all by itself. I do think it would be beneficial on the margins by getting rid of a chunk of the tax code, tagging the stupid non-profits with taxes, etc. It would also force states and localities to come up with their own standards for who is a non-profit, since they mostly piggy-back on the federal definition.

        And, of course, if you get rid of corporate income taxes, it becomes a complete non-issue.

        There’s a more interesting argument to be had around whether donations to 501(c)(3)s should be tax exempt (like property taxes, this would hit the top line, and nonprofits wouldn’t be able to manage around it and would have to reduce services unless/until they replaced the lost resources).

        1. what about giving tax deductions for those who donate to 501(c)(3)s?

    2. Most nonprofit organizations are absolute jokes, as their administrators tend to make quite the tidy profit disguised as salary. It’s pretty hard to justify, as a local example, Carnegie Mellon as needing a tax exemption, with all the government money pouring into that place and the astronomical tuition.

    3. My household is a non-profit institution. Our property taxes also come off the top line rather than the bottom line, thus reducing the funds available for our mission of improving the quality of life of residents of my household.

  6. Non-profit. It hurts my ears.

    They are easy targets. They generally don’t expand the tax base by growing their workforce, something which that space otherwise occupied might do.

    1. They generally don’t expand the tax base by growing their workforce,

      You’re kidding, right? Universities and hospitals haven’t grown their workforces? Check who the largest employers are in your town. I can just about guarantee that the local health system will be high on the list, and if you have a university, they will show up, too.

      1. I think UPMC might actually be the largest single employer in this area. It’s either voluntary payments or another drink tax.

        1. By a long way according to Wikipedia. They employ 47,000. The actual university is the next biggest employer with 11,000.

      2. I could be a pretty big employer too with the kinds of subsidies that hospitals and universitites get. The only way this works is if non-profits are paying for the same police, fire departments and roads that the rest of us are.

  7. This scam is closely related to John’s favorite local government power – namely, zoning.

    Why would any organization with an iron-clad legal tax exemption that the city can’t touch make one of these payments, you ask?

    Why, because as long as the cities possess zoning powers [or licensing powers, etcetera] they can just bludgeon the nonprofits with it to force them to make “voluntary” payments.

    You never really possess a legal right to anything as long as the city can control what you do with your property. They can trump any right you have by simple extortion.

    “The legislature gave us a tax exemption!”

    “Oh, yeah? Where’s the legislature going to be when you come before us with a plan to build a new building on some of your vacant property? Where’s the legislature going to be when we decide that your stadium violates our new noise pollution ordinance?”

    1. Yes fluffy, governments can abuse otherwise legitimate powers. If they didn’t use zoning, they would use something else to make life miserable and extort money.

      The problem is not zoning. The problem is a city government that acts like gangsters. Yes, I know, just take away their power and that won’t be a problem. Well, dream on. The city government isn’t going anywhere. So you better figure out a way to get them to act like something besides animals.

    2. You don’t own your property, Fluffy. Ever. You rent it from the government. Never forget that. That’s why you pay them a yearly “rent” (property taxes) and they can tell you exactly what you can do with it (or not).

      The fact that people think they actually own their property is laughable.

      1. how about allodial titles?

      2. No dipshit, you own a bundle of rights we call “property”. And if that bundle of rights you purchased didn’t include the right to build a pig farm in your back yard, then you can’t build a pig farm and should have adjusted your purchase price accordingly.

        You really have a child like understanding of property.

        1. Yeah Epi, how dare you think that you’re free to build a pig farm in your back yard. Rights like that are bought! Wait no that makes no fucking sense at all, John. You twit.

        2. Got a little sand in your vagina today, John?

          It seems like the idiot who thinks he owns something but doesn’t has the childlike understanding.

          Have fun with your “property”, moron, as the government controls and taxes you for it.


          1. You such a fucking Tony level retard on this subject EPI. Just becuase the government should pay people for regulatory takings, doesnt’ mean that there should be no such thing as land use law. You have this bizzare almost fascist blood and soil view that ownership of land should always mean unlimited use of it no matter how it affects one’s neighbors.

            1. Uh, JOHN, it’s amusing how you throw the word “fascist” out there when a) you’re the one who seems to love the government owning your property, and b) you don’t seem to know what the word means, which is even funnier.

              You’re a little cranky today, huh, big guy. You wanna go get an ice cream?

              1. If buy land dumbass knowing up front that what you are buying does not include the right to do something, the government doesn’t own anything of yours because you never owned it in the first place.

                It is one thing if they change the rules after you buy. That is a regulatory taking and they should have to pay you for that. But whatever the rules are when you buy is what you are buying. So you have no bitch. And you want it that way. You don’t want the jackass next you building a pig farm. Everyone’s property values go up as a result of that. Yeah, you lose your right to build a big farm. But you gain ownership of the right to stop everyone else from building one. It is a simple concept. I don’t understand why it goes over your head.

                1. It is one thing if they change the rules after you buy. That is a regulatory taking and they should have to pay you for that. But whatever the rules are when you buy is what you are buying. So you have no bitch. And you want it that way. You don’t want the jackass next you building a pig farm. Everyone’s property values go up as a result of that. Yeah, you lose your right to build a big farm. But you gain ownership of the right to stop everyone else from building one. It is a simple concept. I don’t understand why it goes over your head.

                  I really don’t get it John. Why are you espousing the complete antithesis of freedom all of a sudden. Only the seller has a right to make contractual demands of a buyer. Any government regulation like that is illegitimate butting into private business. No one has the right to tell me what I can and can’t do with my property, unless I have a voluntary contractual agreement with that person. The fucking definition of property/ownership is control. Limits on that control by some other party is coercion, plain and simple. The consequences of real estate prices have no bearing on that. Just like you have to deal with competitors in the market undercutting you and selling rival products, homeowners have to deal with the surrounding market. Why do you always insist on going full retard in this matter?

                  1. It has nothing to do with freedom Heller. You guys are really dense on this. If you make the government pay for regulatory takings, then zoning is nothing but the government buying property. If you have an area that you want to zone for say industrial, you zone it, pay the people who own the property for any loss in value and then the government effectively owns and retains the right to build things other than industrial shit there. But that is okay since they paid for it. At that point there is a new bundle of rightst that is bought and sold in the real estate market and the world goes merely on.

                    Jesus fucking Christ on a crutch, this is basic law and economics. Read fucking Epstein sometime. Libertarians are just fucking retarded when it comes to real property law. It really is a universal blind spot.

                    1. Yes it fucking has everything to do with freedom. Once the government says I can’t do something on my property when I made no such promise to the seller, it is coercion. Regulatory takings, bundles, all that shit has nothing to do with zoning, which is the local government assigning specific property limitations on certain areas. The government doesn’t have to own the property or sell the property, it just makes the rules. That is how Euclidean zoning works, you ignorant twit.

                    2. Look, if they don’t pay you for it, then you have a point. But that is an issue of regulatory takings. I would agree not paying is wrong. But if they pay you for it, they have just bought a piece of your property. That is not violating your freedom anymore than my right to prevent the owner of my old land from drilling an oil well violtes his freedom. He sold your right to use your land anyway you pleased. You took the check so shut the fuck up.

                      Now maybe you can whine that it is effectively emmenent domain, which it is. But, the government has a right to buy property for public purpose as long as they pay for it. And zoning is a public purpose.

                    3. Why are you okay with the government buying a portion of your property without your permission? In what way is that not an insult to freedom?

              2. And I have another shock for you. Your ownership of the land doesn’t mean shit if you can’t go to court and get the government to enforce it for you. Without the government to back up your claim, you own land only to the extent you can shoot people to keep them from taking it from you.

                So oh NOES!! Your property rights depend on the evil government. That is why places that don’t have functioning governments or corrupt ones are such shitholes; without a functioning, effective government that ensures the rule of law, no one has any clear property rights.

                1. You still cranky, big guy? You know you’re not allowed to play outside until you calm down. You wanna get a Happy Meal?

                  You bore me today, John.

                  1. I am sure I do bore you because you realize how wrong you are and have nothing to say in response. IS MNG spoofing you today?

                    1. If you can’t do whatever the fuck you want with your property, why should you be allowed to have control over your own body? Congrats John you’ve gone full retard. I think the Republicans will take you in now.

                    2. Shut the fuck up heller. You are as dumb Episiarch. Did you people take stupid pills this morning?

                    3. I sold some land a few years ago and kept the mineral rights. Oh NOES I am oppressing the new owner since he can’t drill an oil well on his property. I am an enemy of freedom. God you people are fucking stupid.

                    4. I sold some land a few years ago and kept the mineral rights. Oh NOES I am oppressing the new owner since he can’t drill an oil well on his property. I am an enemy of freedom. God you people are fucking stupid.

                      HOLY FUCKING SHIT, you made a private contractual agreement with the seller!!! Now please, please say what that has to do with public regulation and zoning.

                    5. How is the government paying people for regulatory takings any different? They are basically buying property rights for the public good. It is the same thing. Now if they don’t pay, which they usually don’t, that is wrong. But that is a question of regulatory takings not zoning laws.

                    6. A sale requires the seller’s consent.

                      That’s how it’s different.

                    7. John, you are defending past regulatory takings for which no one was compensated.

                      If someone comes by your house and steals your car, are you going to say, “well, next time you steal a car i own you should pay for it?”

                      All these current takings were a form of theft. We should be allowed to reclaim our stolen property.

                    8. If they pay you dumb ass, the owner of the property is making a contractual agreement with the government. They are selling their right to do some activity to the government. After that they don’t own that right anymore. They sold it. Just like the guy who bought my land doesn’t own the right to drill an oil well.

                      So when you and EPI come along and buy the land and try to build your pig farm, you are fucked because you never bought the right to do so. It is really simple.

                    9. If buy land dumbass knowing up front that what you are buying does not include the right to do something, the government doesn’t own anything of yours because you never owned it in the first place.

                      “If you walk into our town knowing we kill niggers for whistling at white women, you deserve what you get.”

                    10. Yeah fluffy because my buying an easment from you is just like saying we are going to kill niggers who marry white women.

                      Would you agree that people can buy easments and mineral rights and other such restrictions on property? And if people can buy such things, why can’t the government as long as they pay a fair price and it is for a public purpose? At best you are left whinning that it is using emminent domain.

                      Fluffy, you can say that regulating and reducing value without compensation is wrong. And you won’t get much of an argument from me. But when you say the government can’t regulate even where it compensates and that doing so is the same as saying it is okay to kill black people, you are just showing yourself to be an idiot who doens’t understand the concept of property rights.

                      It is funny the one right you hold most sacred, you have absolutely no understanding of.

                    11. And if people can buy such things, why can’t the government as long as they pay a fair price and it is for a public purpose?

                      It would never be for a public purpose. At least not one of the limited public purposes that I would recognize as justifying an eminent domain taking.

                      “We need this land to build a laser cannon to kill aliens invading Earth” and “We need this land because John wants to live in a purely residential neighborhood, but he doesn’t have the money to buy all the lots himself, so he’d rather just dictate what you can build after he’s built what he wants,” are not equal justifications for coercion, John.

                      And if you don’t have any space aliens invading, today, then we’re right back at “A sale requires the seller’s consent.”

                    12. Bullshit fluffy. We need the property because the society has decided we don’t want pig farms in town. Oh your land is worth less because you can’t build a pig farm, here is your compensation. That is not analogous at all to “we are taking all of your property so mr. big bucks can build his X here”.

                    13. John, that little story is nice and all but it’s a fantasy. Look up Village of Euclid v. Ambler Realty Co., which is the basis for the majority of zoning regulations in the US. All zoning in the US starts with coercion, not contract.

                    14. I am very familiar with Euclid there junior. And yes they don’t have to pay as the law stands. And I disagree with that. I think where zoning is shown to reduce the market value of property, the government owes compensation. But that is a different issue than whether the government has the right to ever restrict land use.

                    15. John please show me a real life example of that fantasy you just explained there.

                      Also, whether or not the limitation reduces property value is secondary to the concern over whether the limitation limits the inherent control that a property owner has over his own property (which is what the court idiotically ignored in Euclid). And by definition the limitation limits! Coercion isn’t only bad when it causes harm, it’s bad because it violates freedom.

                    16. Conclusion of this whole argument is that John is for government seizing property as long as they pay you for it? I thought we were all on the same side of eminent domain here…

                    17. Also, even if your fantasy was reality, it still wouldn’t be justified. Unless the seller specifically contractually obligates you to not build the pig farm, you can. The government “bought” the original owner’s right, NOT YOURS.

                    18. Then your bitch is with emmenent domain and we have ceased to talk about zoning. You can t take that bitch up with the Constitution. And you dont’ have an inherent right to do shit on your property unless you own the right to do it. And if the government or anyone else buys that right from you, you don’t own it anymore.

                    19. So you have now just renounced every thing you ever wrote about Kelo.

                      It’s all gone, John. Poof.

                      If it’s a public purpose to take my property to make your residential street look prettier for the sake of your property value, John, then it’s a public purpose to take Kelo’s property in order to build an office park for a pharmeceutical company.

                    20. No I haven’t at all Fluffy. Zoning so that the entire city has higher property values is different than taking land so one guy can build a factory. And again, can that power be abused and used to benefit chronies? Of course but every power can be. That doesnt’ make the power illegitimate. It just makes the use illegimate.

                      There is a difference between someone indirectly benefiting from a law and the law being written to specifically benefit one person. Thus zoning is not Kelo.

                    21. Zoning so that the entire city has higher property values is different than taking land so one guy can build a factory.

                      No, it’s not.

                      If “higher property values” is a public purpose under eminent domain law, then Kelo was rightly decided.

                      It would be very easy for the defense in Kelo to argue that a pretty, shiny new office development for a Fortune 500 company would raise property values for abutters and right out to the city line.

                      That was the entire issue in Kelo: how to determine if a purpose is public for eminent domain purposes.

                      You’re now arguing that enhancing the property values of individual property owners at the expense of the liberty of another property owner is a public purpose.

                      If the state can zone my property to enhance the value of my neighbor’s property, why can’t the state take my property and give it to someone to build a nice new art museum on it? That will enhance property values, too.

                    22. Uh no, John, you’re the one who decided that zoning was justified because it’s like eminent domain. The amount of different positions you’ve taken in this thread is astounding. You went from “zoning is a protection of rights and freedom!” to “well at least it’s constitutional!”

                    23. I haven’t taken any different positions Heller. I have given this issue a lot of thought long before now. My position is consistent. You are just too stupid or too bull headed to understand it.

                      And yes, it is analogous to emmenint domain. That is my analogy to try to explain it to you because you are apparently too stupid to understand the nature of property rights.

                    24. You haven’t taken different positions? Here’s a little presentation on the volution of John’s retardation:

                      No dipshit, you own a bundle of rights we call “property”. And if that bundle of rights you purchased didn’t include the right to build a pig farm in your back yard, then you can’t build a pig farm and should have adjusted your purchase price accordingly.


                      It has nothing to do with freedom Heller.

                      Well… not rights!

                      Then your bitch is with emmenent domain and we have ceased to talk about zoning. You can t take that bitch up with the Constitution.

                      Well… at least it’s constitutional!

                      Libertarians are just fucking retarded when it comes to real property law.

                      John, defender of what’s real!

                      I know that is not how it works in reality. But that is how it should work.

                      Or not…

                    25. And you dont’ have an inherent right to do shit on your property unless you own the right to do it.

                      This is the dumbest thing you’ve written yet John. “Your property” means “property that I own” means “I have the right to control this property.” If you’re paradoxical sentence were true, it would render the word property meaningless.

                    26. You are fucking retarded heller. “Your property” means the bundle of rights you bought. It may or may not include the right to do a particualar thing on that piece of land. You don’t own the land persay, you own the exclusive right to do shit on the land. That is what property means. If you didn’t buy the right, you can’t do it. For example, if you didn’t buy the mineral rights, ie the right to drill an oil well, you can’t drill one even though it is “your land”. Do you want send me a check for tutoring you on property law because you clearly need it.

                    27. No, you don’t buy rights. The right to do whatever you wish with whatever you own is an inherent human right. You buy ownership of the land. You don’t buy each right to do each specific thing you might do. The right to do whatever you want with your property can only be limited by whatever contractual obligations you agree to. No buying or selling of specific rights goes on. When you buy real estate, the contract you sign doesn’t list what rights you have with the property, it only might list what you may not do with the property.

                      The mineral “rights” example is not an example of rights, it’s an example of the government saying you can’t do something with your property unless we give you permission. Again, this is all dependent on your acceptance of the legitimacy of regulatory takings, which is antithetical to freedom.

                    28. The government “bought” the original owner’s right, NOT YOURS.

                      No, the government STOLE the original owner’s rights.

                    29. I was humoring him…

                2. “The government is necessary to protect property rights, and the government can therefore violate property rights at will.”

                  Isn’t that Tony’s argument?

        3. The problem is that the government can change your “right” to build a pig farm, or build a house or build a deck or anything else at anytime. So its not much of a right if can be taken away

          1. If the government does that, they owe you compensation for it. But saying the government has to compensate you regulatory takings is not the same thing as saying there can never be any land use law.

            If you know the rules up front, as in this land can be used for XYZ, you adjust the purchase price accodingly and have no bitch.

            1. The other thing to consider, though, is the rent-seeker issue.

              If there are, say, 100 parcels in a municipality, and 50 of them have resident owners, those 50 people effectively can write whatever land-use rules they want.

              That means that those 50 people can decide what land uses they want for their properties, and then set up rules that protect those uses.

              So those 50 people might say, “It would enhance our property values [i.e. make us some money] if we passed rules saying that from now on you can’t build anything with less than a 500 foot setback, or you can’t build anything over a certain height that might block our views of that mountain over there, or you can’t build anything with a commercial use.”

              If those 50 people make those changes and do, in fact, experience increases in property value as a result, they just used the mechanism of land use to steal that value from the owners of the undeveloped land.

              1. Maybe I am not following the example, but under my rules if the set back requirement lowers the value of the undeveloped land, they owe those owners compensation.

                I know that is not how it works in reality. But that is how it should work. When the government passes such laws they are doing nothing but buying property for public purpose, which is perfectly okay as long as they pay a fair price for it.

                1. So eminent domain is not coercive because you get compensated? Never go full retard John…

                  1. I don’t see a problem with eminent domain. It is written in the constution. I have a problem with using it for a non public purpose. But for a public purpose there is nothing wrong with it.

                    1. I don’t see a problem with eminent domain. It is written in the constution.

                      The “blacks are 3/5 of a person” thing was written in the constitution. The “we can steal your income without your consent” thing still is in the constitution after it was added.

                      Really, your argument is that “if it is in the constitution, it is good”?

                2. Haha I love this little dance John. Earlier you claimed that Epi and I don’t know the “reality” of how property works. Now you’re admitting that your zoning justification fantasy has no basis in reality at all.

                3. John, the reduction in the value experienced by one owner isn’t the only issue.

                  There’s the value gained by the rent-seeking other parcel owners.

                  I don’t want them to gain that value.

                  Even if you pay me as a property owner, you’re still letting thieves prosper. And then they’ll raise my taxes to pay off the debt that their rent seeking created.

                  1. As long as you are no worse off (ie you are compensated for any loss), why do you care if they benefit? Someone benefits from every government action. People’s property values go up when there are good schools. Would you as a non land owner begrudge them that? I can see complaining where something has been taken from you. But it makes no sense to me for you to complain about other people gaining when it doesn’t come at your expense.

                    1. So if the school board in my town all embezzle money from the school district, but then the state government steps in with a grant to make good the loss and my taxes don’t go up, I should consider the matter square?

                    2. I do not want factions to be able to use the power of the state to secure economic benefits for themselves by restraining the liberty of others.

                      That doesn’t seem that odd to me, John.

                    3. Not to mention, John, that the “it’s in the constitution so that makes it A-OK” argument is going to get you very far on this website, methinks. There’s a lot wrong with that particular document.

                      Regardless, without getting into the nuts and bolts of it, I’d like to stake out the freedom position: why do you believe that someone should not be able to build a pig farm, because it might decrease the surrounding property values? How do the surrounding properties somehow gain a right to some pegged value of their property? If your neighbor builds a pig farm, and lowers your value, then that should just be a risk you take when purchasing property.

                    4. I don’t have a problem with saying that if you build a pig farm, you must compensate the existing surrounding owners for any pollution that wafts onto their property, including air pollution from the stench.

                      While the result of that would be that pig farms would likely be located in rural areas, it would not take away the property right to build a pig farm if you can find a way to make it work financially.

                      Whereas, if the pig farm was there first, then people building next to it don’t get to complain about the noise or stench.

    3. The ironic thing of course is that the an-cap subsitute for city governments would be something like an HOA…which are notorious for even more egregious restrictions on what you can do with your property.

      1. Which is why, in an ancap society, you’d be free to shop around for homes that are not covered by an HOA, and one could not be imposed upon you after the purchase unless you had agreed to it in the purchase contract.

  8. Non-profit status should be eliminated

    If you don’t make a profit then you don’t pay taxes on those profits. On the other hand why should I have to pay property taxes while some organization (often one demanding higher taxes) gets to avoid those same taxes.

    Equality under the law should include equality under tax laws.

  9. The only exemption I would make for a non-profit is one that doesn’t pay their employees–any of them–anything. As is, they are a profit-making enterprise, they just disperse it as wages.

    1. To close that loophole you’d also have to forbid nonprofits from buying anything from for-profit entities too. Which would pretty much make it impossible for a nonprofit to actually do anything.

      1. I just have a hard time with the rhetorical fan dance that, say, a huge university that takes in 10s of millions a year, and pays out as salary 10s for millions a year, but as long as it doesn’t take a dollar of “profit” we are a “non-profit” institution.

        It smacks of social engineering with the tax code.

        1. Or when the CEO makes a million bucks a year, well, somebody’s profiting, let me tell you.

        2. Oh, I agree. Personally I support making them pay the same taxes everyone else does (in particular property taxes).

  10. In Pittsburgh (and I imagine other cities) part of the problem is that universities in particular tend to gobble up “for-profit” land when recessions hit, and never sell it back to the profit sector. This causes steady erosion of the city’s property tax base.

    1. I see starving the government of tax revenue as a feature, not a bug.

  11. Confiscating wealth from non-profit institutions?

    You stole my idea, bitchez!

  12. Coons? you are saying big city elected officials are coons?

    1. Yes, with those creepy little hands/paws…. *shudder*

  13. Isn’t it funny how so-called “non-profits” like Harvard can charge $45,000 a year plus get about $3 million from the feds for research?

    1. Hey Gregooo what do you think of Obama’s long form birth certificate? Forgery or cover-up?

  14. Man, wouldn’t it be great if there were a loose band of individuals (some sort of political coalition if you will) whose sole ambition was to win big city local elections with a mandate to keep local government as small and lean as possible?

    Why, with such coalitions around the country, the tax caste system (some are more equal than others) would have little chance at succeeding in Boston, NYC, Chitown, Sin City, LA etc. The more small govt.-minded rural areas would of course follow suit.

    Oh, well, every single American I’ve ever met wants a national party who hates the military, despises the police, craves open borders and whose number 1 priority is making weed legal.

    Since 90% of the commenters here need Cliffs Notes for Bazooka Joe comics, let me be clear:

    Nonprofit tax status issues in metro areas is exactly the kind of issue where the LP and other True Libertarians could actually be useful, in winning elections and spreading libertarian ideas.

    But then again, some Christfag teabagger from Jesusland Iowa will no doubt publicly do something decidedly uncool. So yeah, you’re probably right. Best to pretend you’re above it all and not get involved.

    1. You forgot to call us Pink Cosmotarians…

    2. Not while people still vote largely on social issues and appearances.

    3. Exactly how does seeing the good in the moral teachings of Jesus Christ as a compass for living transmute someone into becoming a “Christfag” as you call it, but actually male-on-male cock sucking or female-on-female clit sucking, both of which are sexual fetishes and thus mind disorders, as all fetishes are, somehow not elevate to the same kind in your mind alone Holy Cow?

      Perhaps you suffer from mind disorder, confusing the cults like the Roman Catholic Church, the Church of the Latter Day Saints, and the churches of all of the Evangelical sects as well as Protestant sects, with the acts of one dude, one individual.

      To quote you elsewhere, anyone must believe that you are a card carrying member:

      It’s funny … the idiotarian wing of Reason (aka the majority of posters) flings [the] insults.

      You know, when they express themselves as such:

      …some Christfag teabagger from Jesusland Iowa…

      While it’s true, that Iowa seems dismal (I’ve driven through it) and that Tea Party subscribers seem out there, exactly how do you expect anyone to “get involved” as “True Libertarians” if this is how you represent yourself and your family, here on the board?

  15. The money that non-profits pay in (inflated) salaries is taxed at the employee level, and would be deducted from the non-profit’s taxable income if it was being taxed. So the argument that they overpay their people as a sneaky profit distribution just kind of evaporates, IMO.

  16. Of course, in libertopia, taxes would be so low that this would pretty much be a total non-issue.

    But that goes without saying.

  17. It’s funny how when Greg makes a good point, which is almost always, the idiotarian wing of Reason (aka the majority of posters) flings the insults.

    So Heller, you approve of colleges raking in tax money and then charging exorbitant tuition fees? Then going around spreading virulent left-wing ideas?

    I guess that makes you a Jesus-loving, racist who masturbates to PNAC screenshots! (Wow! That does feel good!)

    1. Hey Gregooooo/Donderoooooo–

      You make a lousy fucking sock puppet.

      Just so you know…

    2. Holy Cow you failed the moment you took Gregoooo seriously. Chillax, not every joke around here is an ideological attack.

    3. Plus, you’re the one who assumed, wrongly, that I disagreed with Gregooo’s point. I just find Gregooo more entertaining when he espouses on his KULTUR WAR TEAM RED bullshit. And now you’re butthurt, which tells me that you might also be a good source of entertainment.

    4. No, dumbass.

      In the case of Massachusetts, the state legislature sets the tax laws for nonprofits.

      That means that organizations that qualify as nonprofits under state law aren’t subject to local property taxes.

      If the residents of Cambridge and Boston don’t like that the colleges don’t pay property taxes, they can get the state legislature to change the law.

      What they should NOT be able to do is use the other powers the cities have usurped in order to issue extortionate demands for PILOT monies.

      I don’t care what tuitions the colleges charge, what monies they get from the federal government, or what ideas they spread, because those data points are utterly irrelevant to the question at hand.

  18. In libertopia, you don’t pay taxes. Taxes pay you!

    1. Holy Cow you’re butthurt.

  19. OK, here’s my minarchist perspective on this. Non-profits are actually freeloading on the rest of the taxpayers for essential govt services: roads, fire, police and EMS. Religious institutions are the worst. Mega churches cause huge traffic problems when they have services (unlike, say a grocery store where the traffic load is more or less constant throughout the week).

    (Insert standard libertarian disclaimers…)

    1. Non-profits are actually freeloading on the rest of the taxpayers for essential govt services: roads, fire, police and EMS.

      I’m going to NOT stipulate to your implied argument that such essential services need to be supplied by the government.

      The solution is to privatize these services and get rid of the taxes supporting these services, not enable government to steal even more money by targeting non-profits.

  20. “raccoons on trash day.”


  21. The reason John is so adamant about this is because it’s been very easy for suburbanites to create stasis in their surroundings using the mechanism of government, and have leveraged that stasis into enhanced property values.

    So easy, in fact, that John can’t bear to contemplate what it would be like without it.

    It would be a huge pain in the ass to achieve stasis in one’s environment in the absence of rigorous state control of land use. And it would be expensive. And people who don’t want to have to make that effort and expense find it easier to just take away the liberty and rights of those citizens who might threaten their precious stasis.

    In this, they are essentially the same as the union worker who demands that time stand still to protect their job. It would be a huge pain in the ass for that worker to learn new skills, and it would cost him economically if he lost his current job, so he wants everything around him to stop: no new immigrants, no new technologies, no new trade agreements, no bankruptcy of his politically-connected employer, and so forth. What the UAW did to GM and Chrysler is what John endorses doing to property owners through zoning. But since this time he is the UAW member, he doesn’t see it.

    1. Agree with you 100%, Fluffy. It’s almost like an assertion of…a positive right.

    2. Fluffy, what the heck is it with you pretending to peer deep into the souls of people you argue with in a blog comment section? Stick to addressing the arguments that commenters make.

  22. I practiced state and local tax law for a few years, and yeah, this is pretty common. It’s called a PILOT (payment in lieu of taxes), and typically is negotiated between the city and the non-profit. The idea is you still use police and fire services, etc., so at least help us defray a portion of those expenses. Typically, the PILOT payment ends up being less than the entity would have paid as tax on the fair market value of its property.

    In Virginia, anyway, being a Dillon’s Rule state, the question is whether a given locality (city, town or county) has the statutory authority to require a tax-exempt entity to pay a PILOT. We dealt with a few of those cases. We also won a key case in the Va. Supreme Court regarding statutory categorical tax exemptions a couple years ago. We represented the non-profit and won against a county that was trying to collect property tax, despite the entity’s tax-exempt status.

    Yeah, I know, I know – dirty lawyers…

    1. I’d be OK with the city UN-annexing the tax-free plots, saying “you’re no longer part of our city, provide for your own fire and police coverage … if you want us to do that for you, here’s what it will cost”

      1. If it’s on the border of the city that might be an option. If it’s in the middle you’ve got a free rider problem.

  23. Let’s also recall that not-for-profits are not exempt from eminent domain…

    “Mighty nice tax-free Motel 6 you got here, Ms. Kelo Foundation … shame if we were to have to seize it and give it to a tax-paying Ritz-Carlton.”

Please to post comments

Comments are closed.