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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