Word: exempted
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...Topic A will be taxes. So it was last week in a private Washington, D.C., dining room where ex-Commissioner Mortimer Caplin broke bread with Sheldon Cohen, the man who succeeded him last year. One issue Caplin wanted to talk about was lack of taxes, specifically from the tax-exempt organizations that profit so neatly from their publications...
Hidden Subsidy. In 1950, only 202 publications enjoyed tax-exempt status; today, 700 periodicals, ranging from the National Geographic to Knitted Outerwear Times, are spared taxation. Educational some may be, but what upsets the congressional critics is the fact that a growing number of such publications solicit advertising in direct competition with taxpaying magazines. And since tax exemption effectively enlarges income, it amounts to a hidden subsidy that allows the tax-exempt magazines to cut their prices for ad space...
Nation's Business, the publication of the U.S. Chamber of Commerce, pays no taxes and gets the jump on Business Week and FORTUNE, which do. The tax-exempt Journal of the American Medical Association, which rang up a record $10.5 million in advertising revenue last year, drains pharmaceutical advertising from tax-paying Medical Economics and Medical World News; by running ads for such products as soft drinks, margarine and soap, it also competes with general-circulation magazines. Thanks in large part to its tax-exempt status, the National Geographic is able to offer lower advertising rates than its competitors...
Critics are quick to point out that over the years the tax-exempt publications have won numerous influential friends. National Geographic, for example, has many VIPs on its board of trustees. "Generally," says former Commissioner Caplin, "such boards are window dressing." But, he adds, they serve to make Government investigators reviewing the tax status of such organizations "very cautious." Caplin, a lawyer who now represents the National Tax Equality Association, says that the investigators "are certainly not unaware of the line-up and the numbers of the players...
...recruit, some companies resort to blind mailings; Automatic Electric Co. recently sent letters to people living near its Chicago plant, asking, "Are you happy with your job?" By contrast, the Pennsylvania Power & Light Co. has more engineering job applicants than it needs-because public-utility power engineers are draft-exempt...