While I am delighted to see that Mory’s is moving along toward reopening, its receiving from the IRS 501(c)(3) “charitable tax-exempt” status is a disturbing symptom of the essential corruption of our tax system.
Once upon a time, this status was reserved for charitable (entities that helped people in need), educational and religious organizations. Over the past half-century, the standard has shifted from charity to non-distribution: Any enterprise can now qualify as tax exempt as long as its purposes are not “illegal, impossible or impractical” and it does not distribute its surplus in the form of dividends.
Mory’s 501(c)(3) status raises the question of why taxpayers should subsidize through the tax exemption an enterprise that benefits only its members, rather than the general public.
Peter Dobkin Hall
The writer is a senior research fellow at Harvard University’s Hauser Center for Nonprofit Organizations and a New Haven resident.