Word: exempt
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There are many tax laws, which, though justified 25 years ago, today grant unfair benefits to some and impose undue burdens on others. One such tax law, which the President has specifically mentioned, concerns abuses by tax-exempt private foundations. He did not, however, mention tax-exempt churches or charitable organizations, which practice similar abuses. A tax-exempt foundation or organization can run a profitable business, then use those tax-exempt profits to purchase another business...
...foundation, therefore, can often afford to pay a substantially higher price in acquiring businesses than a tax-paying enterprise. To eliminate this unfair advantage, the Treasury Department has recommended legislation requiring private foundations to dispose of substantial business interests which are unrelated to their exempt activities. Congress has not acted on the proposal...
...related situation, churches can operate a profitable, unrelated business and not be subject to taxation. A church can even buy a business, finance the purchase with a mortgage, lease back the business to the original operators, take in most of the earnings, and still be tax-exempt. An unrelated-business tax should definitely be extended to churches...
...itself borrowed the money and the lender had to pay taxes on the interest. Originally, the system benefited both struggling businesses and depressed areas. But as the practice has grown in the last few years, large corporations have exploited the device, in essence, converting their regular bonds into tax-exempt bonds. It distorts the local tax-exempt privileges, and in the long run simply forces the Federal tax system to support the financing...
...protected us from McCarthy, it helped some people get draft deferments, and it probably put in a good word to the Internal Revenue Service when NSA applied for tax-exempt status," Groves said...