[Congressional Record Volume 141, Number 12 (Friday, January 20, 1995)]
[Extensions of Remarks]
[Page E143]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                STOP ABUSES OF CHARITIES' TAX EXEMPTIONS

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                          HON. ROBERT MENENDEZ

                             of new jersey

                    in the house of representatives

                        Friday, January 20, 1995
  Mr. MENENDEZ. Mr. Speaker, Amercians are the most generous people in 
the world, yet charlatans abuse tax exemptions designed to support 
worthy charities. Today, I am introducing a bill to stop such abuse of 
American generosity.
  The Tax Exemption Accountability Act would stop self-dealing by the 
managers of tax exempt organizations and put teeth into requirements 
that they file accurate annual returns with the IRS and make them 
readily available to the public. It also creates a national 
clearinghouse offering copies of returns for a reasonable fee.
  The bill also would cap the compensation of officers and directors at 
the level of U.S. Cabinet members. Churches would continue to be exempt 
from filing IRS returns and from caps on pastors' salaries, and 
hospitals could still pay high-cost professionals.
  We need greater accountability by tax exempt organizations because 
they control substantial public wealth that offers a temptation some 
have been unable to resist.
  The share of national revenues going to tax exempts has nearly 
doubled in the past 15 years, growing at 8 percent per year in constant 
dollars. The IRS reports that the revenues of tax-exempts rose from 5.9 
to 10.4 percent of U.S. gross domestic product from 1975 to 1990. 
Revenues totaled $578 billion in 1990.
  These are substantial revenues. To put them into context, in 1990, 
taxable service industries had receipts of $1,174 billion. The tax 
exempts had revenues of just half that amount.
  The assets of tax exempt organizations totaled nearly $740 billion in 
1990, with real growth at an average annual rate of 7.7 percent over 
the previous 8 years. These assets accounted for 4.5 percent of private 
net worth in the United States in 1990, up from 2.9 percent in 1979.


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