Since Time is saying “Now’s the Time to End Tax Exemptions for Religious Institutions,” it’s important we understand why our government has not taxed religious institutions in the past. I recently explained that one reason for non-profit tax exemptions is that “the power to tax implies the power to destroy” (McCullough v. Maryland, 1816), and our government has not been given the power to govern religion. But there’s more to it than that.
Al Mohler discussed this issue on Monday’s episode of his podcast, beginning with the charge that the government is wrongly “subsidizing” religion through tax exemptions. Not only are tax exemptions not logically a subsidy (after all, it’s not the government’s money the churches are keeping), they’re also not legally a subsidy, as Dr. Mohler explained. From the podcast:
The key statement on these issues was made by the Supreme Court of the United States in 1970, in the case Walz versus Tax Commission of the City of New York; it was a stunning 8-1 decision. Writing for the majority, Chief Justice Warren Burger made very clear that a tax exemption is not a subsidy; that was affirmed by other justices in concurring opinions. A subsidy would be the transfer of tax money to institutions. That’s not what’s going on here…. Rather, the tax exemption is granted with respect to institutions the government does not feel that it has the right to tax on the one hand and on the other hand, institutions that it believes are essential to the Commonwealth and to the commonweal, to the well-functioning of society.
It’s in our best interest to prevent our limited government from taking money away from organizations that are using that money to build up our communities. Local organizations know the people they’re helping, they can give more personalized care with less bureaucratic waste, and those who receive the help do so in the context of relationship, which means gratitude and accountability. Whenever care can be given by the people closest to those who need help, that should be the preferred method of helping, not government:
One [of] the most basic principles that is deeply embedded in American jurisprudence is the fact that the government cannot do everything. This gets to the fact that mediating institutions including churches, synagogues, temples and other religious institutions fulfill a function the government actually cannot fulfill so well.
And the value added to communities by churches isn’t merely material help (such as feeding the poor); it’s also intangible goods, such as spiritual support and the strengthening of interpersonal relationships within the community, which works to reinforce good character, support marriages, raise good citizens, increase general happiness, and more. If you doubt the value churches bring to communities, you need only look at the aftermath of recent tragic events in Baltimore and Charleston. What made the difference between rioting and mass hymn singing? The churches. The difference they made and will continue to make in Charleston is the kind of invaluable good the government cannot provide. As Joe Carter said, “The government doesn’t “subsidize” charitable non-profits; charitable non-profits subsidize society.”
There’s yet another reason why the government does not take money from churches:
Again, in his majority opinion Chief Justice Burger wrote,
“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.”
That is extremely important language. Here Chief Justice Burger was affirming that the most basic fundamental and important reason that the government does not tax churches is that by taxation the church would be required to support the state. Members of synagogues, temples and churches are already taxpaying citizens. It would be a different thing altogether to require the synagogue, the temple or the church actually to fund and support the state. Those who supposedly believe in a separation of church and state have to recognize the dangers inherent in the proposal that the government tax the church….
Chief Justice Burger and Justice Brennan in writing their opinions in this case understood that taxing churches and religious institutions would inevitably put those churches and institutions in the position of funding the government and would put the state in the position of entangling itself in religious organizations and churches. [Emphasis added.]
Read the rest of what Dr. Mohler had to say here.
The government is prevented from controlling churches by the Constitution. This means it does not do so through taxation. Further, it would not be in our interest as a society for the government to take money away from the work churches do in their communities. The government simply cannot replace it.
Some Christians say they wish churches would lose their tax-exempt status so they could have full free speech rights (i.e., the right to comment on political candidates). But giving up all of the above in exchange for the ability to endorse a candidate seems like a poor trade to me.
'The government is prevented from controlling churches by the Constitution.' Ms Hall, we've seen, at least in the past decade or so, how much our government seems to adhere to the restrictions placed on it by the Constitution. In the case of religious belief, we've had plenty of examples of the government (particularly the judicial branch) ignoring or bypassing the Free Exercise clause of the First Amendment, as well as nullifying the votes of the people of 31 states regarding SSM.
As much as I pray the government doesn't continue on its current trajectory, I think Christians (in particular, but any orthodox believers) need to stop depending on our 'kings and princes' to protect us and prepare ourselves for the coming storm.
Posted by: Nate Lenz | July 01, 2015 at 11:56 AM
How about the same tax treatment as other nonprofits?
Posted by: RonH | July 01, 2015 at 02:01 PM
I having been a giving Christian almost all my life. I am burnt out now from the misuse of funds, extravagant salaries, and large kingdoms men build in the name of Christ, ( I acknowledge sincere hearts, but the business model is all to evident and they are often transparent that is so) that makes them truly Power brokers in the name of Christ. When I say this I know there are many precious, servant hearted ministers who give of themselves continuouslly and are not manipulator so. I have seen more history with the first and the pattern continues from pastor to pastor.
I have often said if more Evangelical churches focused on making a difference in the community instead of building building so they can grow we would influence our culture more. Locally the Church of Christ has an orphanage, nursing home (that everyone wants their loved one to have opportunity to be in if needed) and assisted living apartments. We are a small town in Alabama of 60k population and I admire the care they provide for our community.
Posted by: Shirley Riley | July 01, 2015 at 02:02 PM
If there is truly a separation of Church and State, why should the State profit from the activities of the Church?
That said, if there is a movement to rethink tax exemption of churches due to public sentiment, why not list the organization that actively receive money from the government and have public sentiment decide? Do the vast majority of Americans support government giving money to Planned Parenthood, even if they do not object to their operation. Just because someone does not object to something does not mean they want to actively fund it.
Posted by: Trent Collicutt | July 01, 2015 at 02:11 PM
If there is truly a separation of Church and State, then why aren't Churches treated like other nonprofits?
Posted by: RonH | July 01, 2015 at 02:25 PM
One involved murder by police officers, agents of the state, and the other was a lone white supremacist nutter who dropped out of high school? There were churches in Baltimore, too.
Posted by: Phillip A | July 01, 2015 at 02:27 PM
Of course there were, but the murders in Charleston centered on a church. They were the ones most squarely affected, and their response set the tone and rippled out to the whole community—not only to the other churches, who joined in, but many others.
Posted by: Amy | July 01, 2015 at 02:46 PM
Posted by: WisdomLover | July 01, 2015 at 04:16 PM
Most non-profits I have been involved with are HIGHLY regulated. Of course, I am in Canada and under another set of rules but we have federal legislation describing how we operate.
There ain't no separation of non-profit and state.
That said, your IRS hasn't got the greatest reputation when it comes to fairly treating certain types of non-profits.
Posted by: Trent Collicutt | July 01, 2015 at 05:58 PM
Making the books open, so we know a church is not a mode of tax evasion, is neither establishment nor infringement.
Lot's of church money effectively tax evasion.
Little of it is actual charity. 10% maybe?
Lots of churches are primarily tax-free clubs established for the benefit of the leaders and members.
What has these facilities have to do with the practice of religion?
Bathouse? Hmm.
Posted by: RonH | July 01, 2015 at 07:37 PM
So, separation of Church and State means the State regulates religion and civil servants decide what is a legitimate religious expense?
As I observed, there is not a good track record of fairly dealing with any non-profit that doesn't align with the Obama administration.
The argument assumes that the government has an inalienable right to all money, and can decide how much that anyone is allowed to retain.
Posted by: Trent Collicutt | July 02, 2015 at 03:26 AM
Posted by: RonH | July 02, 2015 at 04:51 AM
But perhaps the bigger benefit to open books is that donors get to know where their money goes.
Posted by: RonH | July 02, 2015 at 04:52 AM
"It’s in our best interest to prevent our limited government from taking money away"
Our limited government! Surely, you didn't mean that about our government in DC :)
Posted by: kpolo | July 02, 2015 at 05:10 AM
Honest question: how is taxation for churches different from other non-profits?
Posted by: JBerr | July 02, 2015 at 05:26 AM
So in short this is all about, "If you don't support gay marriage, we'll do everything we can to bring you down"? I'm not as versed as many of you, but with everything going on, it seems a new and different type of persecution is about to begin. If the article in Time didn't have gay marriage in it, and only referenced folks like Creflo Dollar, I guess I could see their point to an extent. It's odd to me that such a small percentage of the population who are gay have this much power.
Posted by: JohnH | July 02, 2015 at 07:22 AM
". According to law. "
You seem a bit naïve.
Between Lerner at the IRS, and Clinton running her own private email sever to avoid freedom of Information requests, do you honestly believe, outside of rhetorical effect, that every action by the government is fair and legal?
Much easier to say there is a separation of church and state, and that removes the IRS's authority as it is an agent of the state.
Posted by: Trent Collicutt | July 02, 2015 at 09:09 AM
Here are a few differences. Don't take my word for it. Google.
For one thing, churches don't have to submit a Form 990.
What's that?
Here's one so you can get an idea.
So, what do they do with all that money?
There is the parsonage exemption.
And, churches can 'elect' a Social Security/Medicare exemption.
(Google IRS Form 8274 to get your copy!)
That's what I could find in a few minutes - all Federal.
States, counties, and municipalities may have their own modes of special treatment.
Somewhere, someone may have collected a complete or nearly complete answer.
Consider the case of Scientology.
Posted by: RonH | July 02, 2015 at 05:49 PM
Posted by: RonH | July 02, 2015 at 05:52 PM
"No more than you think that every action taken by a civil servant is his personal anti-Christian choice."
I don't.
Just anything that doesn't fit the Obama agenda seems to have a target on it.
Posted by: Trent Collicutt | July 03, 2015 at 03:46 AM