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“AND IT CAME TO PASS IN those days that there went out a decree from Washington City Paper that all the world should be taxed.” Hard on the heels of House Majority Leader Newt Gingrich’s proposal that we reconstitute the orphanages of years past comes the proposal from Jonetta Rose Barras that we tax the orphanages (“The Tax-Free Zone,” 12/2). Surely the Christmas spirit is abroad in the land.
Tax exemption for property dedicated to charitable use dates back to colonial times. All 50 states and the District of Columbia guarantee that exemption, either in their state constitutions or through an act of the legislature. There are many reasons why charities are exempt from taxation. A principal one, ignored by Barras, is the role of charities as mediating organizations in a pluralistic society.
Charities are institutions through which individuals can act on their own beliefs about the public good. People concerned about, for example, the problems of hunger and homelessness, can wait for a hopelessly inefficient D.C. government to address those needs using tax dollars. Or they can make a voluntary contribution to one of the charities that help to alleviate poverty. To divert part of those contributions to the District in the form of taxes paid by the charity would distort the value of those gifts by reducing the number of people the organization can help.
Assuming they otherwise qualify for exemptions, charitable, educational, scientific, and religious organizations do not pay income, property, or sales taxes. They contribute substantially to their communities both in providing important goods and services and in fostering the critical values of altruism, pluralism, and community that make life in a city possible.
The city’s financial problems are extreme. However, taxing charities is not the solution.