Compared to What? Menstruation, Pregnancy, and the Complexities of Comparison

This piece explores the complexities of the comparative model as applied to sex discrimination claims that are connected to female biology. On the one hand, comparisons can be a useful and precise way to pinpoint discrimination. The notion that bandages and adult diapers are tax-exempt, while tampons and pads are not, brings the unfairness of the tampon tax into sharp relief: Why are those products for absorbing bodily fluids tax-free, when menstrual products are not? The same is true for a pregnant employee who can show that her request for a light-duty accommodation was denied while the identical light-duty request by another similarly-situated, non-pregnant employee was granted. But the model also contains two traps. First, almost no comparison is perfect. There is often some potential for distinguishing and line-drawing, some way to argue that the comparison does not fully hold up. Second, the comparative model is itself inherently limiting. The biological processes of menstruation and pregnancy (along with menopause and breastfeeding, which this piece does not address) are closely intertwined with female sex and have no obvious analogues. Indeed, these processes impose specific challenges and needs that are not borne equally across the sexes. Yet the comparative model reductively suggests that if no products receive tax-exempt status, or if no employees receive accommodations for their inability to work, there is no sex discrimination issue at all. Although advocates cannot escape the current comparative framework within which they must work—and indeed should use it to their advantage when possible—we should all remain mindful of the framework’s ultimate limitations. The piece begins by analyzing Young v. United Parcel Service, Inc., the 2015 Supreme Court case that grappled with how to apply the PDA’s comparison-based standard. I discuss how Young illustrates the complexities of comparison and unpack the compromise approach that emerged. I then consider the potential usefulness of the Young approach to the tampon tax cases, while acknowledging that they arise under the Equal Protection Clause rather than Title VII. I conclude with some broader reflections.

Tax Optimization of Hedge Funds

This chapter discusses the major legal structures available for hedge fund investing, and how different categories of investors— taxable US investors, tax-exempt US investors, and non-US investors—may use these to reduce the risk of double or triple taxation. Although sometimes complex, these structures allow investors to enjoy the benefits of characteristics inherent in hedge fund investments while being taxed as if they owned the same assets directly.

Strategic reporting by nonprofit hospitals: an examination of bad debt and charity care

In this paper, we examine bad debt and charity care reporting by nonprofit hospitals around bond issuance. Given the tax advantages afforded to nonprofit hospitals, including the ability to issue tax-exempt debt, hospital managers encounter stakeholder pressure to provide community benefits. When nonprofits issue debt, they also face economic pressure to meet creditors’ financial performance expectations. We document a reporting strategy that allows nonprofit hospitals to reduce the cost of bond debt while simultaneously alleviating regulators’ and community members’ concerns about inadequate provision of charity care. Using data from public bond issues for California nonprofit hospitals, we find that hospital managers shift costs from bad debt expense to charity care in periods prior to a public bond issuance and that the strategy is associated with a lower cost of debt. Our results inform those relying on accounting measurements to infer nonprofit hospitals’ social good provisions and financial health.

Comparison of Trends in Nonprofit Hospitals’ Charity Care Eligibility Policies Between Medicaid Expansion States and Medicaid Nonexpansion States

Nonprofit hospitals provide charity care to financially disadvantaged patients according to their self-designed eligibility policies. The Affordable Care Act may have prompted nonprofit hospitals to adopt more generous eligibility policies, but no prior research has examined the longitudinal trend. The expansion of Medicaid coverage in many states has been found to reduce charity care provision, but it is unclear whether the change in charity care eligibility policies differed between Medicaid expansion and nonexpansion states. Using mandatory tax filings, we found that both hospitals in Medicaid expansion states and hospital in nonexpansion states adopted more generous eligibility policies in 2018 than in 2010, but the change was greater in the former for discounted charity care; while the former provided less charity care regardless of their policy changes, the latter provided more when their policies became more generous. This study has implications for policy discussions on the justification of nonprofit hospitals’ tax-exempt status.

Does Mandatory Disclosure Matter? The Case of Nonprofit Fundraising

Do donors seek out potentially adverse information about organizations making fundraising appeals? Do they react when it is readily available? Do they draw negative inferences when critical information is not available? To answer these questions, we consider previously unexamined large-scale natural experiments involving U.S. charitable organizations—tax-exempt organizations that file Internal Revenue Service (IRS) Form 990. Using standard difference-in-differences designs, we find that donors penalize organizations with high fundraising costs when there is mandatory disclosure or involuntary disclosure by a third-party reporter. Organizations with lower fundraising costs fundraise more successfully in the presence of these disclosures. The contrast with donors’ behavior when such information is not available suggests that donors do not draw correct inferences when potentially consequential information is not disclosed. Disclose-on-request requirements, in contrast, apparently do not have any significant impact on donors’ or organizations’ behavior. We then sketch implications for the regulation of donations to charities and their modern cousins, such as crowdfunding and social enterprise organizations.

Tax-Exempt Status and Associated Factors among Charitable Foundations in China

Tax exemption plays an important role in the sustainability of charitable organizations (COs). The 2016 Charity Law of China provides stronger tax incentives for charity donations. Using 767 observations of Chinese charitable foundations (CFs) during 2010–2018 from the China Foundation Center database and manually collected tax-exempt status data, this study applies multivariate logistic regression analysis to examine the association between tax-exempt status and related key factors, such as transparency and donation dependency. This study found that a one-point increase in the transparency score of a CF is associated with a 3.9 percentage points higher likelihood of having at least one type of tax-exempt qualification (OR = 1.039, p < 0.01). There is in general a significantly positive association between tax-exempt status and donation dependency of CFs in China. After 2016, the CFs responded actively to the tax incentive provided by the Charity Law, which in return requires a higher level of transparency. These results suggest that taxation under the legal system may effectively function to promote the sustainability of charity foundations in China in the long run. Further studies are needed to explore in-depth why CFs with advanced tax-exempt qualifications concentrate in Beijing and Shanghai.