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In 2010, there were 1,514,530 non-profit organizations in the US. They had a combined revenue of $1.658 TRILLIION. The tax laws in this case have created and ‘underground’ economy of roughly 1/10 of the US GDP that is tax exempt. See any problems with this??

Link: http://nccsdataweb.urban.org/PubApps/profileDrillDown.php?rpt=US-STATE

Traditionally religious institutions and groups have been exempt from taxation. In the good old days that would have included all hospitals, all schools, all welfare agencies, all battlefield relief agencies, etc. That goes all the way back to ancient times.

In modern times we have used the coercive power of the state to undertake or regulate these activities.

That 1/10 of the economy devoted to those activities would have never been taxed ~ not in Greece or Rome, not by the Hittites, or the Egyptians, nor even the Hebrews ~ and going further back, certainly not by the Sumerians.

The fact the gub'mnt also does these things is really no reason to change the traditional viewpoint. It may, in fact, be a good reason to get the gub'mnt out of those activities!

In the NYC area, the nonprofit lifestyle has become a way of living. I know people who refer to ‘owning’ a nonprofit they started, and even going to court if they think someone is unfairly diverting nonprofit business from their little fiefdom—which is first and foremost their means of supporting themselves. All the while,they feel very smug and superior to most, because they of course are in it for the ‘greater good’.