The case for keeping religious tax exemptions is astonishingly weak

Shortly following the Supreme Court’s Obergefell v Hodges ruling, Mark Oppenheimer wrote in Time that it’s time to end — or at least severely limit — the tax exemptions our government has granted to non-profits since the early 1900s, especially the exemptions specifically granted to religious non-profits since 1954.

As Oppenheimer argued, the policy is unworkable, as the IRS has had a difficult time determining what is and isn’t a religion, allowing patently obvious con-jobs like the Church of Scientology to get off tax-free. What’s more, allowing specific groups to avoid taxation puts an undue burden on everyone else. As he writes, “The property taxes they aren’t paying have to be drawn from business owners and private citizens — in a real sense, you and I are subsidizing Mormon temples, Muslims mosques, Methodist churches.”

Oppenheimer also noted that Bob Jones University lost its tax-exempt status in 1983 over its insistence on discriminating based on race. Given the strong parallels between Obergefell and Loving v Virginia, the case that reversed bans on interracial marriage, it isn’t out of the realm of possibility that churches whose doctrine maintains the illegitimacy of same-sex relationships could face similar issues.

This prompted a response from Damon Linker, who defended the tax exemptions — specifically for religious institutions — on astonishingly weak grounds.

Church and State, via Shutterstock

Church and State, via Shutterstock

As Linker argues, churches have enjoyed de-facto tax exempt status since long before 1954 — or even 1913, when the federal income tax was enacted — because they “were presumed to play the vitally important social role — a role essential to self-government — of inculcating moral virtue in citizens.” However, using this standard as a justification for the maintenance of tax exemptions requires an assumption that religion is an unquestionable force for good.

It isn’t. The “moral virtue” prescribed by churches in the 1800s would be (and is) considered in many respects horrific today. Religion comes down squarely on the wrong side of basic moral questions relating to race, gender and sexuality. If the Scriptures teach our secular society anything, it’s how to form our own conception of The Good by spotting all of the times a supposed higher authority tells us to do things that are obviously immoral. That teaching isn’t worth a tax break.

Linker then takes up a point avoided by Oppenheimer, that tax exemptions for religious organizations violate the First Amendment’s Establishment Clause. One would think it would be fairly straightforward that a law exempting religion from taxes would be a law “protecting the establishment of religion,” but Linker disagrees.

But of course the First Amendment doesn’t just preclude a religious establishment. It also protects religious “free exercise,” and it is on those grounds that the elimination of tax exemptions for churches should be opposed by all Americans, liberal and conservative alike.

It’s true that the Constitution doesn’t explicitly mandate such tax exemptions. And judged in the abstract, there’s no reason to presume that religious liberty depends on them. But we don’t live in the abstract. We live in a world already underway, with certain baselines, presumptions, and expectations in place.

In this real world, churches often operate on extremely tight margins, receiving the bulk of their income from voluntary donations, paying their pastors and staff a modest salary for endless hours of emotionally grueling and sometimes tedious work, and all the while performing a wide range of charitable acts within and often beyond the parish community. These churches benefit considerably, in many cases crucially, from tax exemptions for their income and property, and from the tax deductions permitted to those who contribute to their income through donations.

Setting aside for the moment that it is highly debatable whether churches are, on average, poor or wealthy — Oppenheimer points out in his article that many churches are far wealthier than the communities in which they reside, and I’d add that practitioners of the prosperity gospel are doing quite well for themselves — that doesn’t mean it becomes the government’s responsibility to prop them up. That isn’t “free exercise” of religion; that’s assisted exercise of religion.

Linker attempts to anticipate this objection by admonishing liberals to, in the interest of their self-professed liberalism, look the other way and let these religious organizations discriminate tax-free:

There’s just one problem with this objection: It would seem to make religion as such incompatible with liberalism. All (or nearly all) religions discriminate. They divide the world into the saved and the damned, the sanctified and the sinner, the pure and the defiled, the ordered and the disordered, the righteous and the wicked, the virtuous and the vicious. That’s what religions are: holistic systems of norms, practices, and beliefs that hold up some ways of living, some actions, some behaviors as better than others — with those others denounced, often in no uncertain terms.

If we forbid religions to discriminate — or empower the government to regulate how and against which behaviors a church is permitted to discriminate — we will have effectively ended religious freedom.

Except we won’t have. Not even kinda. Ending the tax exempt status for religious institutions doesn’t ban those institutions and it doesn’t constitute, as Linker claims, “persecution.” All it means is that the government isn’t going to endorse their practices or give them extra help. Orthodox Jews are more than welcome to continue to turn away interfaith couples, and the Mormon Church is more than welcome to turn away same-sex couples, so long as they don’t do so with the direct endorsement of the government.

Linker’s right to say that all religions discriminate. That, among other things, is why the government can’t be involved with them.


Jon Green graduated from Kenyon College with a B.A. in Political Science and high honors in Political Cognition. He worked as a field organizer for Congressman Tom Perriello in 2010 and a Regional Field Director for President Obama's re-election campaign in 2012. Jon writes on a number of topics, but pays especially close attention to elections, religion and political cognition. Follow him on Twitter at @_Jon_Green, and on Google+. .

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  • Look into the birth registry system; taxes don’t fund the government, all the money collected by the IRS goes to the Vatican. You have a number on the back of your SS card; your value as a human being (corporate straw man) is traded on the stock market from birth. The U.S. as a corporation (incorporated in the Act of 1871 when the District of Colombia was created) went bankrupt in 1933, and every U.S. citizen declared an enemy of the state. We’re being used as batteries just as in the movie the Matrix.

    This is just a broad overview as it would take me pages and pages to explain (they purposefully made it complicated so we would never get access to the value the government/financial cartel is stealing from us from birth, and then they have the nerve to grab even more with the IRS), so I apologize for not being very persuasive here. The good news is that while it has taken intrepid researchers decades to get to the bottom of this corrupt system, all the links and proof you will need are readily available if you look for them. I myself don’t pay FICA taxes anymore just through a process of legally changing my designation from U.S. citizen to American National (it takes a lawyer and about $800, but well worth it, of course).

  • wmforr

    … and fund the government by… free-will offerings?

  • terry.hankinson

    ==

  • cleos_mom

    Taxes are regulated by law; mocking is not.

  • cleos_mom

    People who oppose equal rights for gays on the grounds of it being a “choice” should support revisiting the First Amendment big time when it comes to religion. Religion, after all, is a choice. If civil rights supporters want to co-opt their terminology, it’s also a behavior.

  • Yet another example of Frank Zappa being way ahead of his time: “TAX THE CHURCHES!!” Better yet, let’s just get rid of the totally illegitimate Puerto Rican corporation known as the “IRS”.

  • nofauxnews

    Billy Graham amassed a personal net worth of over $25 MILLION in tax deductible and tax exempt “donations” to his “church”. Enough said.

  • *NmySkynn70*

    Priceless!! you are on a roll ;-)

  • Doug105

    I would have agreed everything you listed to help those in need was charity, though I’m hoping it’s not limited to whether or not someone is a member of your church, as has been known to happen. That said proselytizing isn’t a charity, but some groups act like it is ballooning bible into North Korean for starving masses, where it will get them killed or imprisoned like that one group does.

    Bible drop: Christian group takes to sky to sneak Gospel into North Korea
    http://www.foxnews.com/world/2013/11/08/bible-drop-christian-group-takes-to-sky-to-sneak-gospel-into-north-korea/

  • gratuitous

    So what did you mean by “actual” charity? I’m just trying to tell you what you’re throwing away in a headlong rush to teach somebody somewhere a useless lesson. But don’t let anyone tell you you’re not a free-thinking radical mind!

  • LanceThruster

    Long overdue.

  • Doug105

    Properly made maybe, this will taste like cheap wood pulp.

  • Doug105

    Play the victim all you want, even as I agreed with you. Should work on that Martyr mindset its doing you no favors.

  • gratuitous

    “Actual” charity? Feeding the hungry and housing the homeless doesn’t qualify in your book? By banding together with the other people in my congregation and in the larger denomination, my money and my efforts get multiplied and establish an ongoing foundation for continuing work.

    Individual efforts are fine, of course, but they go only so far. Working on eleeomosynary projects in consultation and cooperation with others means we don’t have to reinvent the wheel every week, month or year, and provides more bang for the charity buck.

  • Indigo

    Properly prepared, a nice fat bible tastes just like bacon.

  • 2patricius2

    He said it so well.

  • Bobby P

    Speaking of “he talks to himself, ” I once heard it said when you talk to god it’s called prayer but when God talks to you it’s called schizophrenia.

  • Doug105

    Maybe in 50 to 100 years, if we’re still here that long.

  • Doug105

    Bibles for the poor and starving.

  • Doug105

  • Doug105

    ..

  • Doug105

    There is no reason that actual charity wouldn’t still be tax deductible.

  • ammm_tomas
  • Duke Woolworth

    Auditing churches, now not happening, would be a good start. Revealing leaders’ pay and perks would be a shock to many, both modest and immodest.
    Then, tax away!

  • Glen Spendlove

    Why not remove all tax exemptions, including property taxes for the federal government?

  • Butch1

    Because of these “positive influences on our country,” they have kept gays discriminated upon for a number of years and are still being attacked with people using their religion as the main weapon for their defense.

  • 2karmanot

    BINGO!

  • 2karmanot

    Indeed!

  • 2karmanot

    Wealth, power and consolidation writes history and history’s meta is the glue that legitimizes the most onerous and regressive magic paradigm ever invented.

  • 2karmanot

    Proudly religious is the root problem of all social injustice and should not, must not be given tax free privileges in a healthy democracy.

  • 2karmanot

    “but they are, overall, a positive influence on our country.” SIGH

  • John Masters

    I fully understand your position, and applaud your community involvement. I think the point I was trying to make, and not very well, was that the article’s argument that ministers aren’t well paid and toil long and hard, is not a very good argument by itself. If that’s the only argument, it doesn’t pass the smell test.

    But, as you note, there are those who take advantage of this exemption. For example, I’m aware of a situation where the Catholic Church owns a rather large building in a downtown that has retail space on the first few floors, apartments above, and they give the Bishop an apartment there, and thus claim tax exempt status on all the revenue from what to me is a business venture.

    But if they can account for all the money they make from the business venture going to tax exempt uses, then they wouldn’t have a tax liability. The same would be true for your church. As I would envision it, if your church can establish that the money was used for tax exempt purposes…contributions to food pantries, in-kind contributions, etc., then I wouldn’t expect you’d have to pay taxes on what you brought in.

    But, as you note, we have to get a handle on these organizations that take advantage of this status to enrich themselves rather than the community.

  • gratuitous

    My congregation is pretty small, and the $80,000 you pay your pastor (whose income and emoluments are subject to taxation, just like any other wage-earner) would more than cover our annual budget. In exchange for our tax-exempt grounds, we provide space for 20 community gardeners, so that people can grow their own food. We provide office space and a day center for homeless families (the only such program in the city that provides services to families, rather than just men, women, or a single parent with children) for the princely sum of $1 a month.

    We have fully trained volunteers ready to go on short notice to assist in disaster recovery efforts, providing disaster child care in the early stages of a disaster when survivors have to navigate the relief system, fill out forms, apply for emergency food, shelter, and clothing. We also regularly send members out to rebuild homes in disaster-ravaged areas.

    In addition, we provide hundreds of packets of soup mix every year to the local food pantry agency, this year providing a hot meal daily to 23 persons, and stretching the meager resources of the food pantry, because our country’s priority is to make war across the globe rather than feed, clothe and house its own citizens.

    We also provide meeting space for various groups and agencies that can’t afford to hire out private halls. We have opened our doors to a Bhutanese refugee group, Romanian and Latino congregations, the Girl Scouts, the U.S. Census, and provided rehearsal space to non-profit entertainment groups.

    All of that goes away for the couple of thousand of dollars that would be realized by taxing our congregation. I’d say our community gets a pretty good return for its missing tax dollars, but because some people want to make themselves feel better by taxing a few greedheads hiding behind their religious tax exemption, we’ll just tell those homeless families to . . . Well, what SHOULD we tell them? Their country – which they know doesn’t give a flying fuck about them – is so mean and petty that what little we can provide them is now to be taken away? Why don’t YOU tell them that?

  • therling

    “But we don’t live in the abstract. We live in a world already underway,
    with certain baselines, presumptions, and expectations in place.”

    Argument from tradition. Many odious behaviors that we have since realized should not be allowed to continue could be justified under that kind of thinking. Like a segregated military, denying women the vote, etc., etc.

  • Demosthenes

    Thanks for responding. I guess my response to you is there is zero chance churches will have their tax free status yanked. You and I both know that. The next question is what is a more realistic goal. I offered my opinion on one.

    Caveat: I’m proudly Greek Orthodox (like a certain former head of this blog . . . )

  • Baal

    I for one reject that premise. I think history is on my side.

  • Accepting the premise, for the moment, that religious institutions are an overall positive influence on the country, there are plenty of other institutions that we would consider net-positive influences on the country that we still tax. That says nothing about whether passing laws specifically exempting them from taxes constitutes an endorsement of religion in violation of the First Amendment.

  • Demosthenes

    I must respectfully disagree, Mr. Green. Religious institutions should keep their tax free status. Of course all religions “discriminate”, but they are, overall, a positive influence on our country.

    Want to lobby to take away tax free status from truly sham groups? How about stripping tax free status from political hit groups like all the dark money 501(c)(4) sham “educational” organizations run by hacks like Karl Rove

  • Baal

    Of course they’re welcome to them. But those ideas should not be given any respect (certainly as justification for public policy) and people who hold those ideas should be mocked relentlessly for their medieval thought processes. And yes, taxed.

  • Indigo

    They’re welcome to their superstitions, just tax them like everyone else.

  • Baal

    It is long overdue. Going further, “faith” should be a word with highly negative connotations, as with “superstitious”, and “witchcraft” or “believes in magic” since it amounts to the same thing. If someone is said to “be true to his faith” or is a “man of faith” it should not be viewed as a complement. It is equivalent to “believing in ghosts” or “the boogeyman” or “he sees things that aren’t there” or “he talks to himself”. Faith is not a way of knowing anything. Faith inherently leads one to conclude that one event causes another without there being any physical connection between two events or processes. Not surprisingly, this tends to get you to the wrong answer about how the universe works more often than not. People whose moral positions “stem from their faith” have been on the wrong side of history throughout history. Faith = dark ages.

  • I think it would be astonishing if the IRS actually enforced current laws and rules.

  • Knottwhole

    That it wouldn’t pass a democratically controlled house or senate is beyond the point.
    Is it right?
    Humanity is finding its way beyond the belief in dog. Unfortunately, humans will never be humane.

  • 2patricius2

    Tax breaks for religious institutions reminds me of the tax breaks that oil and gas companies get. None of them should get tax breaks.

  • Not gonna happen. That wouldn’t even pass a Democratically controlled house and senate much less the current Republican dominated ones. This isn’t even worth the time to laugh at how ridiculous it is as a proposal.

  • They already do that and the IRS does nothing about it. Some even endorsed candidates last year. Not a one of them ran into any problems.

  • LanceThruster

    APPRAISE THE LORD! Tax the churches.

  • lawrence090469

    Those that are so inclined break the rule and dare the IRS to “persecute” them. I think if left to do as they wished on this point you would consolidate the right wing activists into certain churches and out of others. And I’m for them keeping the tax exemption on activity that is a true charitable pass through, as long as the charity is unencumbered by indoctrination or religious observance. But we’re talking about very little money there. The other thing a revokation of tax exempt status does is choke their revenue stream, as the flock is no longer able to deduct that money from their income tax liability. Suddenly the enthusiasm for tithing “As God Intended” becomes ten, twenty bucks a week. The faithfull will have to start “rationalizing”, corporate speak for eliminating, “underperforming” congregations. Remember, chumps, the Bishop gets his cut first. Your nice little place gets by on what’s left.

  • iamlegion

    Frankly, I kinda want to keep the exemption if it gives us a hammer to use to keep them the hell out of politics. If a member of the clergy can threaten his members with excommunication or damnation for not voting the way he thinks they ought to, I want to be able to threaten him with jail or bankruptcy.

  • Indigo

    Just tax ’em like everybody else. They make noise about contributing to the society but with what? generous donations to their own causes which privilege them and working magic to make it rain or stop raining, to invoke their war god, and to conjure ill will towards those who do not fit their mold. In a country that supports freedom of speech and association, they’re welcome to their prejudices (which they call “beliefs”) within their walls. But they are most certainly not entitled to any kind of tax breaks.

  • Hue-Man

    The first “religious right to discriminate” case in Canada since marriage equality in 2005, has been decided unanimously. Trinity Western University Law School has not yet opened but has applied to the Law Societies (provincial bars) for accreditation. The stumbling block is that each student must sign a covenant which includes all the expected Talibangelical sins, including sex outside heterosexual marriage. The covenant would even expel a lesbian student if she married her girlfriend in a Christian church. The Ontario Bar denied TWU’s accreditation after a lengthy review and voting process. (Link to the Ontario Bar deliberations. http://www.lsuc.on.ca/twu/ )

    “Judges Frank Marrocco, Ian Nordheimer and Edward Then of Ontario Divisional Court, resolutely came down on the side of critics who argue TWU’s Covenant constitutes discrimination, as it effectively means the school is closed to lesbian or gay students. If LGBTQ students want to
    attend the law school, the decision states, they would have to “essentially bury a crucial component of their very identity, by forsaking any form of intimacy with those persons with whom they would
    wish to form a relationship.””

    And a direct shot at religion being in business:

    “What TWU would then be essentially saying is that it not only wishes to operate its law school … in order to advance its religious beliefs, but that it will only do so if it is guaranteed access to the single largest market for law school graduates.” http://www.theglobeandmail.com/news/national/ontario-law-societys-decision-to-refuse-trinity-western-accreditation-upheld/article25230491/

    This kind of discrimination is based solely on hatred of LGBT people. In my years at college, I never heard a student ask a “gay” math question, a “Muslim” statistics question, or a “heterosexual” English question. Similarly, no one ever asked a student or prof whether they’d had straight or gay sex before they came to class or whether they were busy committing adultery! TWU seems to believe the gay is contagious – not a good starting point for an institution whose aim is to train professionals to apply the law.

  • John Masters

    “paying their pastors and staff a modest salary for endless hours of emotionally grueling and sometimes tedious work, and all the while performing a wide range of charitable acts within and often beyond the parish community.”

    My Methodist Church isn’t huge, but we pay our Senior Pastor nearly $80K per year, plus we provide a parsonage (his house). I’d say that ain’t bad. But I know lots of people who earn at or just above the minimum wage who do emotionally and physically grueling work which can be tedious. I also know that many of those volunteer their time. I’m not aware of any volunteer work our Pastor does outside of his duties as Pastor. That’s not say that some don’t volunteer, and make low salaries, but my point is, that’s not a reason to say they should be tax exempt. The employers of those minimum wage workers I cite aren’t tax exempt just because they pay lower salaries for tedious work.

    Churches use and benefit from the same services the rest of us do. Our church experienced a burglary, and the local police were called to investigate, and they came. We’ve had someone require emergency medical attention during a service recently. The fire department responded immediately, and they got there on streets the rest of us paid to have built. There is no reasonable expectation as to why they deserve this tax exempt status, and asking religious organizations and other tax exempt organizations to pay their fair share to enjoy all of those same government services and programs is not unreasonable.

  • Bill_Perdue

    Tax the cults until they fall and can’t get up.

    https://www.youtube.com/watch?v=8r-e2NDSTuE

  • Hue-Man

    A musical theater group performs every Sunday morning in the small theater it owns. Where demand is sufficient, shows are performed on other afternoons and evenings. Tickets are sold on a what-you-can-afford basis with a suggested price of $XX per ticket. To promote its performances, group members are paid to sing at retirement homes and hospitals.

    Without changing its business plan, the same group now calls itself “Reformed Glee Church” and by magic it’s exempt from ALL federal, state, and local taxes – income, property, sales tax/VAT – and many of its employees are similarly exempt.

    What a waste of government taxing resources! This is even worse than the 1% who at least pay some nominal amount of income taxes, pay sales and excise taxes on their yachts, and pay property taxes on their mansions.

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