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Hospitals that make profits should pay taxes

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Re: Hospitals that make profits should pay taxes

#151

Post by AnthonyMouse »

lostlogin wrote: post #144
paradox242 wrote: post #126

Earlier quoted context omitted.

A guy a worked with once did some time as an IT contractor at one of the large hospitals here in town (they are almost all now owned by the same organization) and he was telling me how this works in practice. Since they have to spend all of them the money on "improvements" it ends up on things like the wall-sized $40k television his team of 5 put in a room in a conference room in a basement that no one ever uses.

This sounds more like an internal issue than a legal one. Departments spending all their budget in the last month of the financial year, thereby justify the following year’s budget has been a thing forever.

It's clearly either incompetence or corruption. There is no way a hospital couldn't find a legitimate use for spending an arbitrarily large amount of money. You treat more indigent patients or buy another MRI machine etc.

Re: Hospitals that make profits should pay taxes

#152

Post by AnthonyMouse »

nobodyandproud wrote: post #141
INTPenis wrote: post #76

Earlier quoted context omitted.

They can charge whatever they want, sort of like they already do for medicine.

Not to mention that NP doesn’t prevent certain administrative and executive employees from getting excessive salaries.

But then they pay personal income tax on the salaries.

Which is the same thing that would happen to the equipment supplier. You're in no way avoiding the tax, you're just having the equipment supplier pay it on their profits.

Re: Hospitals that make profits should pay taxes

#153

Post by dragonwriter »

mdasen wrote: post #77

This strikes at an issue we haven't really addressed enough in non-profits: how much community benefit do they need to offer? A non-profit simply means that there are no investors who can profit from the business. However, I think we haven't really thought enough about how much community benefit they need to offer to justify being tax exempt - and it's a hard problem. For example, let's say I run a non-profit hospita…

> This strikes at an issue we haven't really addressed enough in non-profits: how much community benefit do they need to offer?

I think you mean 501c3’s with their tax-deductible donations (i.e., wealth-favoring tax subsidy), not non-profits more generally. “Community benefit” is not even in principal a common feature of nonprofits (even tax-exempt nonprofits) as a class, but it is the notional justification for 501c3’s specifically.

Re: Hospitals that make profits should pay taxes

#155

Post by echelon »

foldr wrote: post #130
echelon wrote: post #114

Earlier quoted context omitted.

> If partying is a problem, they should be able to talk to a doctor about it, and it should be paid for as a part of the services provided by society. I feel like I'm on an alien planet here. We should pay for people to get lifestyle advice? This is malinvestment. Put that money into research instead.

Paying for people to get lifestyle advice is a great investment as it reduces both the cost of their healthcare and various externalities associated with living in a society where lots of people are unhealthy.

How much does that cost?

Edit: Why should we pay for this instead of food insecurity, education, research, etc.? Will measured outcomes give us bang for the buck?

Re: Hospitals that make profits should pay taxes

#156

Post by briffle »

mdasen wrote: post #77

This strikes at an issue we haven't really addressed enough in non-profits: how much community benefit do they need to offer? A non-profit simply means that there are no investors who can profit from the business. However, I think we haven't really thought enough about how much community benefit they need to offer to justify being tax exempt - and it's a hard problem. For example, let's say I run a non-profit hospita…

My local hospital just had a bit of a freak out a year or two ago, and laid people off, and cut back on services because they had a $13m salary shortfall. They are the busiest ER on the west coast. in 2019-20 (right before covid), they pad $140M cash for a new tower building, and they still have a $1B 'rainy day fund'.

Re: Hospitals that make profits should pay taxes

#157

Post by foldr »

echelon wrote: post #155
foldr wrote: post #130

Earlier quoted context omitted.

Paying for people to get lifestyle advice is a great investment as it reduces both the cost of their healthcare and various externalities associated with living in a society where lots of people are unhealthy.

How much does that cost? Edit: Why should we pay for this instead of food insecurity, education, research, etc.? Will measured outcomes give us bang for the buck?

Prevention generally costs less than treatment. It’s a great way to save money overall - unless you want to be the person at the restaurant who won’t split the bill because one of your party ordered extra fries.

Re: Hospitals that make profits should pay taxes

#158

Post by mminer237 »

pkulak wrote: post #6
lxm wrote: post #3

Wouldn't this create an incentive for increased management bonuses in order to "tax-optimize" the profits?

I’m okay shifting it to income tax. As long as it’s collected.

Any income paid out is already taxed as income though.

Re: Hospitals that make profits should pay taxes

#159

Post by TheOtherHobbes »

mdasen wrote: post #77

This strikes at an issue we haven't really addressed enough in non-profits: how much community benefit do they need to offer? A non-profit simply means that there are no investors who can profit from the business. However, I think we haven't really thought enough about how much community benefit they need to offer to justify being tax exempt - and it's a hard problem. For example, let's say I run a non-profit hospita…

The problem is more obvious in reverse: profit is money extracted from community wealth.

It may be reinvested to create more community wealth. But until that happens it's effectively removed from the collective resource pool and monopolised by private owners for private ends.

This is not great when it's abstract numbers, but it inevitably seems to concretise as privileged individual control over property, land, exclusive status symbols such as yachts and private jets, control of media outlets, and ownership of corporations - all of which are potent destroyers of community health and community wealth.

The tail is wagging the dog. Community wealth is treated as the left-overs after privileged individuals have taken their share. It should be the other way around.

Re: Hospitals that make profits should pay taxes

#160

Post by AnthonyMouse »

pessimizer wrote: post #129
blackeyeblitzar wrote: post #104

How do you get around tricks like "Hollywood accounting"? Wouldn't we see hospitals start to mess with their numbers in the same way to avoid the threshold for regulation?

Shouldn't they be obligated to? You can't help but create taxes and tax dodging at the same time, but the fact that people try to get away with murder is no reason to make murder legal.

The problem specifically with taxes is that the line between taxable and not has to be drawn between two behaviors that people are commonly engaged in. Charity and for-profit business are both normal activities.

Then citizens will want their activity to be classified as non-profit and governments will want to classify it as for-profit and you have to establish exactly where the line is because there will be tons of people standing right on top of it. You don't want to tax charities providing cancer treatment for children, and you also don't want to cause them to waste resources paying lawyers or inefficiently structuring their activities to avoid being accused of tax evasion.

Whereas for murder, you don't have to be all that concerned you're going to over-deter people from inducing fatalities.

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