Jul 162014
“THUS, as a matter of efficiency, the government forgoes taxes which should have been spent to address public needs, because certain private entities already assume a part of the burden. This is the rationale for the tax exemption of charitable institutions. The loss of taxes by the government is compensated by its relief from doing public works which would have been funded by appropriations from the Treasury (The Rationale for Exempting Nonprofit Organizations from Corporate Income Taxation by H. Hansmann, as cited by the Supreme Court in the case of the Commissioner of Internal Revenue vs. St. Luke’s Medical Center, 2012).”