Should Churches Be Tax Exempt?

This question goes to the very foundation of the US Constitution, namely the first amendment and the clause of separation between church and state. Frankly, is giving any religious institution the ability of being tax exempt a violation of this separation?

In such effect I believe that it does violate the Constitution of the United States.

"A more certain way to attack religion is by favor, by the comforts of life, by the hope of wealth; not by what reminds one of it, but by what makes one forget it; not by what makes one indignant, but by what makes men lukewarm, when other passions act on our souls, and those which religion inspires are silent. In the matter of changing religion, State favors are stronger than penalties". -- The Spirit of the Laws, Baron de Montesquieu (1748)

Indeed by allowing such favors as tax exempt status is indeed a favor from the state (federal government), you get problems especially when you legally are supposed to be a nation of secularism. Now there is a difference between acting in a governmental capacity one must administer laws and policies in a secular fashion. However, when you are in your private home, in the street, and in your thoughts you have the freedom to exercise and not to exercise any religion or no religion you the individual so choose.

Such tax exemptions status must be available to all groups. The only restriction on how the legislatures act when it comes to creating and giving out tax exemptions is that they are not permitted to do so based upon preferences for content or based upon a group's failure to take certain oaths. In other words, once tax exemptions are created at all, the process for allowing certain groups to take advantage of them is restricted by constitutional rights.

In particular, they cannot give exemptions to a group merely because the group is religious, and they cannot take away exemptions for the same reason. If tax exemptions are created for magazines or books or whatever, the exemptions must be available to all parties, not just religious and not just secular applicants.

Do churches not paying taxes raise the cost of the tax burden for taxpayers? The Supreme Court failed miserably to answer this question. The case to which I am referring to is... Walz v. Tax Commission of the City of New York (1970). Here's a little background information for you with the courtesy

http://atheism.about.com/library/decisions/tax/bldec_WalzTaxComm.htm?terms=cal

Walz was an owner of real estate in Richmond County, New York. He sued the tax committee to challenge the property tax exemption for church-owned buildings used exclusively for worship.

According to Walz, this property tax exemption indirectly placed tax payers in the position of contributing to the churches. Because churches do not pay the taxes, everyone else has to pay extra to make up the difference even if they do not belong to that church.

In the end, churches become beneficiaries of government services - fire protection, police protection, etc. without actually paying for any of it. Because those services are at least in part funded by others who do pay taxes, then taxpayers are forced to indirectly make contributions to religious institutions in violation of the Establishment Clause.

Religious institutions are obviously relieved of a common expenditure because of their exemptions, and this allows them to spend more money on religious purposes - thus the indirect government support.

Not bad. Makes perfect logical sense. However, the Supreme Court would decide against this logic 8 to 1.

Here are the Court's three arguments of why nothing was wrong:

The Court used three basic arguments to justify the exemptions.

(1) The first argument was historical in other words, tax exemptions for religious properties were nothing new in America and had been around since the earliest colonial days. According to the court, despite such a long history, there is not even "the remotest sign of leading to an established church or religion."

(2) The second argument was what is often called the "charitable class argument" religious properties are placed in a larger class of "eleemosynary institutions (from the Greek eleemosyne, "mercy"). Thus, the tax exempt status granted to all houses of worship is the same privilege given to other nonprofit organizations (hospitals, libraries, playgrounds, etc.). This meant that churches were not singled out for special treatment.

(3) The third argument was the issue of "excessive entanglement" the Establishment Clause is supposed to minimize the interaction between church and state (this argument became the "third prong" in the Lemon test). However, if the government were to collect property taxes from churches, then the level of interaction could be raised to an unacceptable level.

"Either course, taxation of churches or exemption, occasions some degree of involvement with religion. Elimination of exemption would tend to expand the involvement of government by giving rise to tax valuation of church property, tax liens, tax foreclosures, and the direct confrontations and conflicts that follow in the train of those legal processes. ...Granting tax exemptions to churches necessarily operates to afford an indirect economic benefit and also gives rise to some, but yet a lesser, involvement than taxing them."

Part of this argument involved emphasizing the difference between direct monetary subsidies and the indirect economic benefit of tax exemptions:

"The grant of a tax exemption is not sponsorship since the government does not transfer part of its revenue to churches but simply abstains from demanding that the church support the state. No one has ever suggested that tax exemption has converted libraries, art galleries, or hospitals into arms of the state or put employees 'on the public payroll."

This constitutes something of a contradiction for Burger: on the one hand he argues that the tax exemptions do not benefit religion, but then he argues that tax exemptions exist for organizations which benefit the community - in other words, to help advance the organizations' missions.

Justice Brennan, in a concurring opinion, explained the purpose of tax exemptions thus:

"Government has two basic secular purposes for granting real property tax exemptions to religious organizations. First, these organizations are exempted because they, among a range of other private, nonprofit organizations contribute to the well-being of the community in a variety of nonreligious ways, and thereby bear burdens that would otherwise either have to be met by general taxation, or be left undone, to the detriment of the community. ... Second, government grants exemptions to religious organizations because they uniquely contribute to the pluralism of American society by their religious activities. Government may properly include religious institutions among the variety of private, nonprofit groups that receive tax exemptions, for each group contributes to the diversity of association, viewpoint, and enterprise essential to a vigorous, pluralistic society."

However, one Justice did get the argument correct...

In a dissenting opinion, Justice Douglas argued that there was a difference between tax exemptions for churches and tax exemptions for secular charities because the latter perform functions which the government is also constitutionally permitted to perform; the former, however, do many things which would be unconstitutional for the government. Churches exist for religious purposes and, according to Douglas, tax exemptions amount to an indirect subsidy which does not differ in any relevant aspect from direct subsidies:

"The financial support rendered here is to the church, the place of worship. A tax exemption is a subsidy. Is my Brother Brennan
The most persuasive argument in for most people has been the "class argument," and so this decision accepted the premise that religious institutions are beneficial to society and are thus eligible for the same benefits offered to other such organizations. The effect here is to promote the idea that churches used primarily for religious worship are "charitable institutions" serving the greater public in the same way that hospitals, libraries and museums do.

Once again, the Court allowed the government to give special privileges to religion without it being construed as "establishing, sponsoring, or supporting religion."

However, what the other Justices failed to realize and understand is that a tax exemption for religious institutions is in fact going against the very nature of the establishment clause of the Constitution in the first place. Assuming income tax laws are valid for the moment, which I have said are not valid at all. It is a most egregious violation of the I and XIV amendment to the US Constituiton simply because they are religious institutions. Ask yourself, why go through the trouble of specifically calling out a separation between religion and the state? To use the class argument to state religious institutions are beneficial to society overall it must equally be understood, acknowledged, and stated that they are also they reason for many crimes against citizens of the republic as well.

If churches were to be taxed, they would have to be more properly regulated. Which would mean revrends, pastors, preachers, priests, would be subject to criminal background invesitigations. No more children would be molested as we here so much about in the news. Churches, rather church leaders would be more free from having tax exempt status pulled by being able to voice the political opinions. Churches would have to comply with laws as well.

Exemptions from property taxes represent an even larger benefit to churches there may be as much as $100 billion dollars in untaxed church property in the United States. This creates a problem, because the tax exemption amounts to a gift of money to the churches at the expense of tax payers. For every dollar which the government cannot collect on church property, it must make up for by collecting it from citizens; thus all citizens are forced to indirectly support churches, even those they do not belong to and may even oppose. Guess who gets to make up that difference? You the Taxpayer. And its not about whether you are christian, muslim, neo pagan, wiccan, satanist. You're supporting churches whether you like it or not because they are not contributing to their fair share of society yet enjoy government services such as.. .EMS, FIRE, POLICE etc... This is perhaps the most indirect violation of the separations between chuch and state.

But then if you tax churches will you not inhibit the free exercise of religion? Good question. If churches are taxed as I believe they should be, since it is a business. No they will not. First off , most chuches aren't pulling in $ 1 million dollars a year in revnue. If just tax them by how much they bring in the tax burden for most is dependent on what their parishoners donate to them, so thusly only a small percentage would actually go towards taxes but it would be something nonetheless. As they say when you have a national debt...every little bit counts. The only question that would come up would be do we just charge churches a fed tax rate, or all taxes? See how many churches close shop in some localities like NY, DC, LA, etc...

If you work under the assumption of the "class argument" and churches are good for society, well I just wonder how good are they for society when they are not required to pump in money into the society around them directly in the form of taxes? Those taxes would go to fund things such as healthcare, education, better roads, unemployment, job centers, libraries, etc.. Are those things as well not good for society? How can such institutions be good for society if they dont not contribute to its financial well being? As well churches having to pay taxes would lower the tax rate for Joe and Jane Taxpayer. You spread it around more, less people have to pay, more money people have in their pockets to take care of their families directly and their social well being.

Not only are citizens forced to indirectly support religious organizations, but some groups benefit much more than others, resulting in problematic religious favoritism. Some institutions, like the Catholic and Mormon churches, have billions of dollars in property whereas others, like the Jehovah's Witnesses, own much, much less.

There is also, unfortunately, the real problem of fraud. Some people tired of high property taxes will send away for mail-order "divinity" diplomas and claim that, because they are now ministers, their personal property is exempt from taxes. The problem got to be enough that in 1981, New York State passed a law declaring mail-order religious exemptions to be illegal.

Even some religious leaders agree that the property tax exemptions are problematic. Eugene Carson Blake, a former head of the National Council of Churches, complained once that tax exemptions ended up putting a greater tax burden on the poor who could least afford it. He feared that one day, the people might turn against their wealthy churches and demand restitution.

The idea that wealthy churches have abandoned their true mission also bothered James Pike, a former Episcopal bishop in San Francisco. According to him, some churches have become much too involved with money and other worldly matters, blinding them to the spiritual calling which should be their focus.

Some groups, like the American Jewish Congress, have made donations to local governments in place of the taxes which they do not have to pay. This shows that they truly are concerned with the entire local community, not simply their own members or congregation, and that they are interested in supporting the government services which they use.

Religious exemptions from taxation is no trivial matter. It is estimated that churches and other religious bodies may own anywhere between twenty and twenty-five percent of all of the land in the United States. This represents a huge portion of the possible tax base and billions of dollars in potential revenue which could be used to fund schools and other portions of the social infrastructure upon which the churches depend, just like the rest of us.

The assets of the Roman Catholic church alone exceed those of the five largest American corporations combined and cash donations to churches total tens of billions of dollars every year.

Every dollar not paid by churches or other religious organizations must be made up from some other source. When all tax exemptions are taken into account, it is estimated that the average family may pay up to $1,000 in extra taxes every year to make up for the lost revenue not received from churches and religious groups. This includes sales taxes, inheritance taxes, income taxes, personal taxes, and ad valorem taxes.

All of this money represents an indirect contribution to all of those religious organizations. Because taxes which would go to pay for their share of maintaining society are made up for by the rest of us, they are free to use that money in other ways, for example promulgating their message to a wider audience. They certainly have a right to spread their ideas wherever they wish, but do they also have a right to public assistance in doing so? We have, then, two inter-related objections to religious tax exemptions: they represent a huge amount of money which must be made up by everyone else, and filling that gap may constitute indirect subsidies paid by the public to religious institutions in violation of the separation of church and state.

Eliminating tax exemptions for charities generally would provide a great deal more money for governments, which is part of the argument for eliminating tax exemptions for religion. However, it is unlikely that there would be much broad public support for such a radical change in the tax code. Tax exemptions for charitable organizations have a long history, and for the most part, people tend to have a favorable impression of them.

The latter option, re-conceiving the idea of charities such that churches and religions would no longer be automatically included, would probably encounter just as much resistance. Currently, churches receive an automatic charitable tax exemption which is not available to other groups an unfortunate preference. Should churches actually have to demonstrate that they are doing charitable work that entitles them to tax exemptions on their own merits, it is unlikely that they would receive the same extensive benefits as they currently do.

However, even when religious groups are not involved with any work traditionally regarded as charitable like feeding the poor or cleaning the streets but instead focuses upon evangelization and religious study, people still tend to feel that that qualifies as "charity." After all, those groups are trying to save the souls of others, and what could be more important?

Which is all well and good to try and save the soul of another, but like I said before such is a business. One has to take religious study and instruction, to be properly trained to exercise and impliment their craft, you provide a service which is basically "spirtual counseling". I would concur that people would want to talk to a priest or rabbi whom has studied such faith and does know what they are doing and talking about.

In the end really we have to decide something most fundamental is that is equally fair that persons whom claim a faith not shared by others be allowed to enjoy the services all pay into that may not share such a faith privatley?

A person whom does not go to church should they have to indirectly contribute and subsidize costs for churches, is that not a violation of their religious freedom if they themselves dont not believe in God or any religions at all?

Is it fair to make a Christian pay to subsidize a mosque for Muslims?

Or a Jewish person to pay for a church of Nazism? Legally speaking with current laws such is possible.

Government this government the Constitutional government, by design was set up to be secular for a reason. Reason being religion and secular government ultimatley cannot co-exist.