If they are for-profit they do. HCA Hospitals is the biggest for-profit and they paid $1.6 billion in taxes last year.
A lot of hospitals are non-profits or not-for-profits. Profits they make must legally go toward furthering their stated cause and cannot be paid out as dividends.
Yes but the salaries have to be reasonable. You can’t setup a charitable organization and then pay yourself $10 million a year to run it.
And the people getting paid are usually separate from the people in charge. Most of the time board members of non-profits are either unpaid or are paid a small token amount. When they are paid, it’s not going to be a meaningful chunk of the profits.
For-profit hospitals that actually turn profits do pay income taxes. The concern is with non-profit hospitals. They don't distribute profits to shareholders. But some do pay high salaries to employees or have large and growing endowment funds. The author is arguing that threatening to tax some of those funds would incentivize non-profit hospitals to lower prices and give out more charity care. This isn't necessarily a bad idea but I am skeptical whether this would actually achieve results.
It gets into more arcane policy than clear economic effects.
Why are dividends taxed, but not investments in a shell company that collects dividends?
Corporations aren't natural people (spare me the inane conflation of "legal person" with "natural person", everyone who doesn't understand why those two concepts have distinct legal names), so there is no inherent reason why there's any need to tax organizations instead of the people who profit from them as owners or wage earners or vendors.
The dividend deduction avoids double-taxation, that should be obvious. The dividend-issuing organization pays taxes on its income; that income is then distributed effectively post-tax (although the exact % dividend deduction depends on ownership percentage).
Why should a parent corporation have to pay taxes twice just because of its corporate structure?
Such corporate structures are often set up for the express purpose of optimizing tax. Replacing corporate tax with dividend tax would remove incentives from setting up such structures, which is a good thing.
Apart from that, double taxation is a reality for natural persons since they have to pay income tax and VAT. Corporations are usually not subject to the latter.
> The concern is with non-profit hospitals. They don't distribute profits to shareholders. But some do pay high salaries to employees or have large and growing endowment funds.
The non-profit healthcare organizations in my metro area spend tons of money expanding by building new clinics, surgery centers, specialty clinics, hospital wings, etc.
Had the same thought when I read the title. Then "Ah, the old non-profit that's really a for-profit in disguise." A tale as old as dimes (and nickels). Bricks also (the gold variety).
Notably, article written by: Marty Makary, M.D., M.P.H., professor at the Johns Hopkins School of Medicine and Carey Business School. Even some of the doctors don't seem to like the situation much.
Be weird being a doctor where you didn't like your own hospital's priorities very much, except I read those doctor/nursing stories all the time. The UK situation's been so depressing I mostly avoid those articles when I check the Guardian.
The profit motive (or disguised non-profit cousin) has also been leading to what seems like not sane work hours of 12+ shifts in a lot of cases, which is another issue [1]. The nurses seem to hate it, the staff say its not safe, yet the profit says 12h shifts.
