LEGAL DISCUSSION School: Lecturer: W6 LEGAL DISCUSSION National development is a very important phenomenon for every nation. It is however important to realize that countries do not work for themselves but through the work and effort of the people within it. As the government make provisions for the people to go about their businesses in a peaceful and economically viable atmosphere, it is always important that the people who benefit from the efforts of government will also give back to society for the development of their countries (Peregrine, Louthian and Fine, 2012). It is against such principles that there are taxes in place for individuals and organizations. In effect, taxes are in place to ensure that people stay responsible and give back to society from what society gives to them. On this basis, it becomes very questionable to think of taxing organizations such as non-profit health institutions whose sole approach to doing business is to help the people within their territories instead of making profits. As the adage is said, unto him much is given, much is required. However, these non-profit hospitals make no profits, based on which they will have to produce any taxes.
Apart from the fact that non-profit hospitals do not make any profits based on which they will be taxed, it is also important to realize the fact that these hospitals make their contributions to society through the low cost and in some cases free medical service they provide (Walker, 2005). Because the fundamental wisdom behind the need to have taxes is to ensure that citizens become responsible to their countries, it will be argued that the efforts and activities of these hospitals are contributing and responsible enough for them not to be taxed. Consequently, the idea of tax exemption for non-profit hospitals is strongly supported. Stuart and Showalter (2011) acknowledged that in the administration of health institutions, monetary strength is very crucial. What this means is that at every point in time, the hospitals must be in a position to have sufficient funding to run their internal management affairs. Based on this understanding, an idea to tax the hospitals that are not for profit would only be a means of further depriving the hospitals from becoming financially independent.
Having said this, the need for there to be sufficient scrutiny of the non-profit hospitals to ensure that they live up to the reasons for which they are tax exempted will be advocated. It is important that there will be sufficient auditing to ensure that hospitals do not take advantage of the country in the name of being not-for-profit. The only way to ensure that there will sufficient justification for the exemption in taxes that are given to the hospitals is to ensure that there will be monitoring programs that ensure that the hospitals will constantly live up to their calling to be charitable to the needy and most vulnerable (Connolly, 2005). Once this is ensured, much of the debate doubting the usefulness of the tax exemption will be put to rest. Where some hospitals will be found to be guilty of living up to the standards and practices of non-profit organization, it will only be appropriate that the status of such hospitals, and for that matter the tax exemptions enjoyed by these hospitals will be revoked. This way, there can be fairness in the system so that only those that genuinely warrant the tax exemption can be made to benefit from it.
Connolly C. (2005). “Tax-Exempt Hospitals Practices Challenged:46 Lawsuits Allege That Uninsured Pay the Most” Washington Post Staff Writer, Saturday, January 29, 2005.
Walker D. M. (2005). GAO Testimony before Committee on Ways and Means, House of Representatives, by, Comptroller General of the United States, May 26 2005, p.4.
Peregrine M. W., Louthian R. C., III and Fine M. N. (2012). An Overview of the Additional Tax Exemption Requirements for Nonprofit Hospitals. DM_US 33714212-4.T07869.0010
Stuart J. and Showalter, J.D. (2011). The Law of Healthcare Administration. 6th edition. Health Administration Press: New York.