Here are some quotes from Ludwig von Mises: “The most valuable privileges are those granted in the field of taxation. Some of these exemptions do not count very much, e.g., the exemption from the annual franchise taxes. But the exemptions in the matter of income taxation are of primordial importance. “From its very beginnings, the federal income tax legislation exempted cooperatives. These exemptions were widened and enlarged in the later Acts. On the other hand, they became the more helpful and profitable as the tax rates increased to confiscatory levels. With the present tax rates, they are tantamount to lavish subsidies at the expense of all taxpayers and the whole nation.” *** “If the inefficient grocer A is exempt from a tax which his more efficient competitor B is forced to pay, the power of A to stand the competition of B is strengthened. A‘s operating costs proper (i.e., operating costs exclusive of taxes) are still higher than those of B. But against this difference in the operating costs proper must be held the advantage which A derives from tax exemption. Although A‘s conduct of affairs is wasteful, although it absorbs an amount of capital and labor which, without curtailment of the services received by the public, could be made available for the satisfaction of other wants which cannot be satisfied precisely on account of A‘s wastefulness, his shop can continue in business. The government shelters A against the consequences of his own inefficiency. “A‘s tax exemption is therefore not merely a matter that would concern exclusively him and B and would not affect the interests of all other people. What the government achieves by taxing B alone instead of distributing this tax equally between A and B, is not merely a disarrangement of the mutual competitive position between A and B. The main social and economic effect is the preservation of a high cost unit at the expense of a low cost unit, the preservation of a quite useless and obviously pernicious squandering of scarce factors of production. “This inefficient A whom the government pampers in order to make it possible for him to compete with B, is the cooperative in its capacity as a beneficiary of tax exemption and other government favors. It is of no avail how the friends of cooperativism try to justify these tax privileges in resorting to metaphysical arguments. The simple truth is: the government interferes in order to make it possible for the cooperatives to stand the competition of private business which they admittedly could not stand when unaided.” *** “The cooperatives did not stand the test. Where they thrive and as far as they thrive, they owe their existence to various government privileges, especially to tax exemptions and cheap government credit.… “…the government forced other people to make a sacrifice for the benefit of the members of the cooperative. It forced these other people to pay higher taxes in order to free the cooperative from the burden of taxes. The cooperative acquired the factory by a subsidy which it received in the shape of tax exemption.”