Collecting Taxes, Outlaw Style
Most of us know what will happen if we don’t pay taxes lawfully assessed us: Penalties, interest, liens, attachments and by and by under certain circumstances, criminal complaints betide. We can complain all we like, but the tax-collector will win, because the law is on his side.
But what if government tried to collect taxes not authorized by law — and used its coercive powers to extract payment? Preposterous? It is happening today — as communities, mainly Boston, try to get universities, hospitals and other non-profits to make much larger payments “in lieu of taxes” — payments never authorized by the legislature. In most cases these payments are not voluntary. They are vigorish (vygrash, a good Ukrainian & Yiddish word meaning the “rent” bookmakers take.) The way it works if you are Harvard or B.U. or Northeastern, and if you ever want to get your building plans approved, you just make your voluntary payments on demand.
A case can be made that non-profits should pay property taxes (pro rata, perhaps) for municipal services. But that case needs to be put to the legislature. It is not now the law. The spectacle of the city of Boston hijacking Harvard’s or WGBH’s laden armored car may have its appeal. But the precedent of political leaders acting outside the law is frightening, or ought to be. How are you and I to resist when they come after what’s ours?
In the 1940’s, Boston, including Cambridge, Somerville, etc., was headed where Cleveland, Cincinnati, Pittsburgh and St. Louis were headed: A once dynamic, now poor central city, surrounded by more-or-less gated suburbs. In 1968, Mayor Kevin White called Boston “a big white Watts.”
It was unquestionably the colleges and universities that saved Boston from the fate, for example, of Cincinnati, which in 2010 shuts down at 5:00 P.M. Baby boomers who came to study stayed to live and bought real estate in neighborhoods then in decline. Beginning in the 1950’s, universities’ research-engines created several waves of technologically-based economic growth. It is a well-known story.
So while the case for lawfully taxing non-profits is worth putting to the legislature, there are arguments against it. In the meantime, I wish our leading institutions would stand on principle and flatly refuse to be extorted by our politicians.