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Should Churches Be Tax Exempt?

Posted 22 months ago|46 comments|1,812 views
Written by
Out Of The Box
 Moderator

Churches are, and as far as anyone alive today can remember, have always been exempt from paying taxes on the money and gifts given to them. Why is this? Separation of church and State immediately springs to mind. Operating as a charitable institution is another reason why they are tax exempt. But given the fact that tax exemptions are a form of bettering a person or organizations situation, would not a tax exemption actually be a way that government supports and favors churches over secular enterprises?

Even though most churches do provide charitable outreach programs, should the entirety of the church income be exempt, or just that portion that can clearly defined as charitable? We all know of pastors receiving multi-million dollar paychecks, living lavishly, and though they do pay personal income tax on their salaries, the churches are not paying tax on the monies they receives to pay them with. Same thing with property taxes, the church may build a building, occupy it for a few years, and then move to another location, selling the old building for a handsome profit, and never pay a dime in taxes.

Churches qualify for most tax exemptions automatically, where other charitable organizations must apply and be approved, and must have a more complete reckoning of where their money comes from and where it goes, leaving many to speculate that churches are not only being favored by the government , but that they are also using their tax exempt status for their own personal gain. There have been many instances where the officials in a tax exempt religion have been caught doing just that. In the 70's, five priests were caught running a tax exempt mail order business, and using the proceeds to buy expensive cars and live in luxurious mansions.

But here is what I think it boils down to. In exchange for separation of church and State, there has to be reciprocal separation of State and church. In order to maintain their Government tax exempt subsidy, churches have to agree to stay out of the political arena. Although subsidizing a religious organization is illegal in the United States, tax subsidies are given to every church in the United States, in exchange for their silence on political matters.

Technically, any church which engages in political campaigning or endorsing any candidate or party is subject to lose its tax exempt status, under US law. The same thing applies to any church engaging in any rhetoric or activities contrary to government policy. Tax exemption of churches is considered to be a privilege, one acquired by maintaining "good behavior", and not a right.

I think its time for the churches to rethink their status, and determine for themselves whether or not the price of silence is too high.
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COMMENTS
markbyrn
markbyrn
 Moderator
22 months ago: Good article but I can't see any major political party taking this one on, but looking at IRS Section 501(c)(3) on political restrictions, it might be in the realm of possibility to close the following loop-hole:

http://www.irs.gov/charities/charitable/...

"Certain activities or expenditures may not be prohibited depending on the facts and circumstances. For example, certain voter education activities (including presenting public forums and publishing voter education guides) conducted in a non-partisan manner do not constitute prohibited political campaign activity. In addition, other activities intended to encourage people to participate in the electoral process, such as voter registration and get-out-the-vote drives, would not be prohibited political campaign activity if conducted in a non-partisan manner."

Let's not pretend that Churches (liberal or conservative) are encouraging voter registration out of pure civic goodness and if that loophole was closed, it would force Churches to either stay out of politics all together OR they can already choose to pay taxes if they want to engage in overt partisan politics and campaigning.
22 months ago: outta.

We have an interesting situation here in east Tennessee.

http://www.knoxnews.com/news/2010/mar/20...

http://www.knoxnews.com/news/2010/mar/22...

In 1995, Tennessee law changed requiring a state property assessor to determine if individual churches were exempt from property taxes. Prior to 1995, the local county assessor made that determination.

In this situation, the local assessor after 1995 went ahead and determined a local church was exempt from paying property taxes. By doing that the local property assessor violated the law and committed a misdemeanor.

Later, a decade later, the state assessor noticed the problem and the church received a tax bill of over $50,000.00.

Lawsuit time.
THE RONBOT HUNTER
THE RONBOT HUNTER
22 months ago: I am against the taxing of REAL churches or REAL religions that are for the betterment of mankind.

But I am in favor of taxing Godless churches that are in fact harmful and evil cults, such as the so-called Church of Scientology.

In these links, it will expose the truth about the Godless Cult of Greed and Sin.

Once you study the material and follow the links to other facts, you will agree that we are losing millions of our taxes.


http://www.sc-i-r-s-ology.pair.com/conte...

http://www.sc-i-r-s-ology.pair.com/copyr...

http://www.sc-i-r-s-ology.pair.com/newsr...

THE RONBOT HUNTER
ALL RIGHTS RESERVED
Colorado
Colorado
Westcliffe, CO
22 months ago: They should remain tax free, all types of churches, temples, Mosques and other religious buildings. The reason is donations do not usually keep up with costs and salary. Many pastors work for very little or close to nothing. You are right there are big churches with million dollar pastors but that is a rarity.

Tax exemption allows for churches to use the money they do get wisely because they do not have any source of income outside of donations and sale of real estate. This helps keep many churches alive.

Now on your politics and religion, well, by taxing them for involvement your taxing the groups freedom of speech. Besides, there is no real way you could tax such involvement that would hold up in the supreme court.
Perfect Horizon
Perfect Horizon
Chicago, IL
22 months ago: I agree with you for the most part. But keep in mind that while the Pastors/Priests etc may get a very small salary they do in fact, for the most part, live in a house free of charge and have their utilities paid for out of the church funds. These are often unrealized portions of a salary paid to a religious leader.
Colorado
Colorado
Westcliffe, CO
22 months ago: True.
Out Of The Box
Out Of The Box
 Moderator
22 months ago: Very interesting perspective. Would you go as far as to say that buy buying a church's silence through tax exemptions, that it already constitutes taxing their freedom of speech?
Colorado
Colorado
Westcliffe, CO
22 months ago: Good point. I guess the answer would lie in the constitutionality of taxes on property, income and sales in the first place. Many would argue that by taxing anything outside of sales tax and a few other government fees, taxation is illegal. However, I am not going to get into that at all because lets face it, most of us pay taxes.
markbyrn
markbyrn
 Moderator
22 months ago: Tax-exempt status is not part of the First Amendment or otherwise enshrined in the Constitution. Nobody is abridging the free speech of the Church but if they want to be tax-exempt, they have to stay out of politics - that's the tax law. If they didn't have that law, political organizations would simply set themselves up as Churches. As a reminder, Churches don't pay property taxes yet they are still provided fire dept, police, roads, etc. They are being given a special privilege and certainly not a right.
Colorado
Colorado
Westcliffe, CO
22 months ago: mmmm. You could say that the members of the church pay their property taxes for their homes and that provides the funding for fire protection, police and so on. Take 1 pastor for every 50-100 citizens and I believe that the lack of property taxes from those church buildings is not unduly straining local infrastructure.
markbyrn
markbyrn
 Moderator
22 months ago: No, the members of the Church pay the tax for their own private property and the entire community subsidies the services for tax-exempt properties.

And let's not imply a minimal impact here. Here's an article from 1993 that noted there was $4.2 billion in tax-exempt religious property in Wisconsin alone and it comprised much more than houses of worship - (e.g. Hotel, pay parking lot, farm, communion bakery, etc.). I imagine that figure has rised substantially.

http://news.google.com/newspapers?nid=13...
Perfect Horizon
Perfect Horizon
Chicago, IL
22 months ago: This points to the issue that the United States has more churches per capita than any other industrialized "western" nation. But regardless of numbers they should remain tax exempt.
22 months ago: Mark:

There's nothing in the Constitution saying religion has to stay out of government.

The Constitution says the government has to stay out of religion.

It's a 1 way wall.
Perfect Horizon
Perfect Horizon
Chicago, IL
22 months ago: "Congress shall make no law respecting an establishment of religion"

2 way wall no matter how badly you want to live in a theocracy.
Out Of The Box
Out Of The Box
 Moderator
22 months ago: OK, different topic. The article of the Constitution you quoted. Let's break it down.

Congress (the government)
Shall make no law (cannot say)
that abridges any church or religion (what can or cannot be done by a church)

Now, in your wildest imagination, how do you read anywhere in there "No church or religion will have a say in the government?" If that is just implied, then apply that to every freedom guaranteed in the constitution.

How about the fourth Amendment,
"The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated"

Is that a two way street too? So in exchange for being able to be secure in our houses, is the government able to hide from us?
Perfect Horizon
Perfect Horizon
Chicago, IL
22 months ago: Just because you chose to ignore the separation of church and state does not mean that it does not exist.

It is there because the writing of the founders clearly lay out that church/religion should have no place outside of your private life.

The 4th amendment lays out the right to protect you form your government, it does not directly address government operations from you.
scotmanster
scotmanster
22 months ago: "church funds"

The church funds come from the donations of members. That would mean any donation you make to any cause would have to be taxed as well. It is this backwards logic religious intolerant people don't seem to get.

The majority of our fire departments are volunteer fire departments. Meaning they do not get paid either for a service they provide and rely on donations. Lets tax those donations as well right? I was a volunteer firefighter for 10 years of my life and the amount of donations are small compared to how much the equipment costs.

The problem mark you refuse to believe other non-religious groups are tax exempt as well and if we hold them up to the same light then that would have their tax exempt privileges taken away.

You have special privileges at your taking that are tax exempt and that is called welfare, social security disability and social security that are not your rights. Seeing how you if you ever collect these I could coin you as a burden to society and you should keep your political ideals to yourself, seeings how I am paying your bills. But I do not suppose to be ignorant of the fact that our systems setup to help people.
markbyrn
markbyrn
 Moderator
22 months ago: ...You have special privileges at your taking that are tax exempt and that is called welfare, social security disability and social security that are not your rights...

No, you have that wrong. I earned my benefits (including disability) from 26 years of military service and I paid into Social Security as well, and I'm not on welfare.

And Scot, I know you have some angst against me but I didn't suggest taking the tax exemption away - I only mentioned tightening the IRS rules to prevent electioneering, or they can choose to pay taxes if they want to be a political organization.

I also volunteer with a non-religious, non-political organization here in Central Florida and I'm certainly not pushing to have them taxed, nor did I suggest taxing your volunteer fire department. You can the address the points at hand or you can continue to make spurious personal arguments - it's no sweat off my brow.
scotmanster
scotmanster
22 months ago: "No, you have that wrong. I earned my benefits (including disability) from 26 years of military service and I paid into Social Security as well, and I'm not on welfare."

I was speaking hypothetically Mark. If you add up the amount it costs for someone that is injured at age 30 lets say for example and total up the amount they get in benefits over the next 40 years of their life. The amounts you put in and are taking out do not add up. Then you certainly did not earn your benefits, others are paying for your benefits. if you earned them then you would be paying every cent that you take out of the system.

Do I believe that our injured Vets deserve ssd? I sure as hell do just like I would fight for their freedom of speech even if their income is tax exempt.

So lets just assume we take away your freedom of speech which I think it is preposterous you would even mention. Seeings how one your full benefits you earned are being paid by the Government and two you hold tax exempt status on those earnings. I see absolutely no difference between a churches freedom of speech and yours. But here you propose to infringe on a churches freedom of speech.

You take this as a personal argument I am pointing out that their other services besides churches that hold tax exempt status and you propose to ignore them.
markbyrn
markbyrn
 Moderator
22 months ago: Scot,

You keep putting words in my mouth - the IRS tax law for tax-exemption requirements have long stated:

http://www.irs.gov/charities/charitable/...

"Under the Internal Revenue Code, all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. Contributions to political campaign funds or public statements of position (verbal or written) made on behalf of the organization in favor of or in opposition to any candidate for public office clearly violate the prohibition against political campaign activity. Violating this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes."

That includes Churches and other non-profits. If you don't agree with it, don't blame me and don't put words in my mouth. Also, I can't say I'm surprised by your new math linguistics that changes earned benefits from military service to charity.
scotmanster
scotmanster
22 months ago: When you take money from one person and give it to another it is charity. Do I mean to demean our fellow service members that risk their life for this country? Not at all. I salute you for your service and thank you for keeping my family safe and free. But I don't have to agree with your views. I myself am in the same system. But I am not ridiculing the system I am ridiculing if a person or church is tax exempt then they should be able to exercise their freedom of speech equally. The Constitution supersedes any precedent that the IRS dreams up. The fact of the matter is as of right now our Constitution is just a piece of paper. It has been degraded to that thanks to liberals and progressives.
scotmanster
scotmanster
22 months ago: So to answer the question of this article should Churches keep their tax exempt status? Yes they should and any laws that stop them from exercising their freedom of speech is Unconstitutional.
markbyrn
markbyrn
 Moderator
22 months ago: Ironically, the law that prohibited electioneer by non-profits (inc. Churches) was approved in 1954, near the same time as the Pledge of Allegiance was revised by religionists to add "under God" and in 2002, the House of Representatives defeated a bill that would have rescined the restriction by a healthy margin. It's not likely to be revisited anytime soon.

http://clerk.house.gov/evs/2002/roll429....
scotmanster
scotmanster
22 months ago: I disagree in the land mark case that was just won in January Citizens United v. Federal Election made it legal for corporations to exercise freedom of speech through media campaigning. It does not take a rocket scientist to understand freedom of speech is not about hindering ones right to use it. If anything this landmark case opened the door for churches to exercise their God Given right to exercise political free speech.

Even Supreme Court Justices agree on that...

Justice Kennedy

Sure the Constitution protects 'the press' but as bloggers of today and pamphleteers of the founding era know, you don't need to be a corporation to be 'the press'. Clearly corporate media isn't a necessary condition of 'the press' so why should media corporations be afforded special protections for 1st Amendment activities others aren't?

There's also the inconvenient fact that corporations are nothing more than an aggregation of individuals (investors, workers, managers, etc). Each of these people have first amendment speech rights. Why exactly should those rights be destroyed simply because they are exercising them collectively instead of individually? (hint: they shouldn't)

There's simply no merit to the left's critique and they won't like where it leads. The beauty of being a lefty is that every case is different and the argument you use one day, isn't applicable to similar circumstances the next day if it doesn't help you.

From the latter (pp 3-4):

Premised on mistrust of governmental power, the First Amendment stands against attempts to disfavor certain subjects or viewpoints or to distinguish among different speakers, which may be a means to control content. The Government may also commit a constitutional wrong when by law it identifies certain preferred speakers. There is no basis for the proposition that, in the political speech context, the Government may impose restrictions on certain disfavored speakers. Both history and logic lead to this conclusion.

So while you portend to uphold current statues that limit free speech no matter who or what you are I could not disagree more.

The best thing about liberalism is they don't know when to quit pushing. Their anti-First Amendment argument is getting blown out of the water as they propose to push their backwards, double standard, religious intolerant agendas on America.


Perfect Horizon
Perfect Horizon
Chicago, IL
22 months ago: "The best thing about liberalism is they don't know when to quit pushing"

Careful with your context...you are are liberal...you dislike Liberals
scotmanster
scotmanster
22 months ago: You know exactly what I am referring to and that is your only response to it?
Perfect Horizon
Perfect Horizon
Chicago, IL
22 months ago: Sortof like when we were talking about abortion and I was referencing when life begins and you started talking about amoebas?
scotmanster
scotmanster
22 months ago: Your mistaken it was not me who brought up amoebas. From here on out I will not be replying to comments that lack any real debate back. I do not have the time to reply on every comment that lacks substance directed back at me.
THE RONBOT HUNTER
THE RONBOT HUNTER
22 months ago: You are missing one point, that the IRS will soon be cut out of our lives.

The truth is that only Federal subjects and those in the employ of the Feds, are obligated to pay taxes to them.

Read my new post and just wait to find out how you fare under the common law.

THE RONBOT HUNTER
ALL RIGHTS RESERVED

http://freedom-school.com/law/prison_tre...

http://freedom-school.com/keating/how-a-...


22 months ago: I'm late coming to the fray but here I am, much to the dislike of some.

Should Churches "lose" their tax free status? I am going to say YES! It's about time. Now you are going to say WHY? They do such good things. I'm going to say sure they do, but, there is always a but, when that little favor to the citizens who enjoy religious activities and doing the benevolent work of most Churches was enacted, Churches were for the enrichment of the lives of it's members and for saving their souls and spreading the good word, not for the enrichment of the Churches coffers and some of it's clergy. WERE, WAS, you know, PAST TENSE.

That is no longer the case in many, many, many houses of worship that enjoy raking in the dough and not having to pay a dime in taxes on it. Sure there are some that still do good works and aren't abusing the privilege, but in this day and age and with the need to "pull in some green" to maximize the investment of past donated funds, most Churches are "for profit", even if they won't admit it.

There are Churches out there that own and operate businesses that compete directly with non-religious businesses that do not get to claim tax-exempt status. This allows the Church business to undercut the civilian one in price and if you also add in the donated time of the workers at the Church business, (or the low wages that some pay), it becomes a real profit maker for the Church while running the poor citizen out of business.

Let's add this to the question: Should a tax exempt Church be allowed to own a business that competes with a civilian owned business and claim tax exempt status for that businesses income and other tax advantages?

I'll say absolutely not! Let's level the playing field so that the civilians can compete with them.
22 months ago: Scot, a "Church" does not have the same type of freedom of speech that a citizen has. You can't issue a passport to a "Church", you can't put a "Church" in prison, you can't educate a "Church" in the public school system.

Within it's walls the members can say and do pretty much what they like to each other because they are there voluntarily, as long as that "speech" does not violate the individual rights of the members or infringe or seek to infringe upon the rights of a group not in attendance, or incite a riot, or threaten the president or any number of illegal acts, you get the idea. One thing that shouldn't be done is to electioneer. To stand up in the pulpit and tell your congregation to go out and vote for candidate such and such is electioneering and is illegal. It doesn't matter if it is the preacher/pastor/priest or just a member, if it happens in the building set aside for the Church to meet in or at a site used for the purpose of gathering the members together for a few words, it is electioneering.

If the clergy wants to encourage the Church's members to go vote, that is acceptable, it's when they start picking candidates for them to vote on that they have stepped over the line. You might think that that is ok but I really don't want some firebrand fanatic telling all the blue-hairs to go vote for "Sweet Smelling Joe" because he'll put a chicken in everyone's pot and a smile on everyone's face and if you don't think it hasn't happened, you are naïve. Those blue-hairs have given away the kitchen sink thousands of time because their "preacher" told them too. Oh yeah, forgot to tell you, "Sweet Smelling Joe" is the preacher brother-in-law who's claim to fame is cooking the books and the office he is running for is county treasurer (or some such office that has access to $$$$) and the only reason he is running is to fund his retirement in about a year. But since the preacher told them to vote for him, he must be ok…… Right?
22 months ago: Peculiar, isn't it, that the one who said "give unto Caesar", of "whom do the Kings of this world demand tribute..." and basically instructed us to pay our taxes...would now find his name plastered across untold thousands of signs hung above the entrances of tax shelters.
Is this a miracle?
No, religion and Caeser have been having the longest going affair...and they're both to full of lust to stop.
The church cannot pay taxes, firstly , because the world can't recognize it.
Secondly, she has no "income"...she doesn't receive "operational expenses" or receipts for building funds...
scotmanster
scotmanster
22 months ago: "it's when they start picking candidates for them to vote on that they have stepped over the line. "

Just like the media picks candidates for us? Do I listen to them or make my own judgment call? Most people are old enough to make their own mind up.

But this election season should be a good one seeings how the NRA and other organizations now have the right to free speech during election campaigns. It will not be long for Churches to be next.
22 months ago: The media does not speak to an audience that is expecting the guy in the pulpit to save their souls. There is a huge difference in the trust and faith that many church goers put in their preacher than in their nightly news anchor. Many will vote exactly the way he tells them to. I've never heard a news anchor go on TV and say "As your news anchor I expect you to go to the polls and vote for "Sweet Smelling Sam". It happens in churchs every election season and it is wrong, wrong, wrong. Nothing you can say will make it right.

Is the NRA tax expempt? Is the NRA TELLING it's members HOW to vote? Remember that "Telling and How", not suggesting with a veiled threat behind it, but actually coming out in public or nearly so and TELLING it's members exactly who to vote for and expecting them to do it, no questions asked.
scotmanster
scotmanster
22 months ago: Six Justice Kennedy disagrees so do I..

Justice Kennedy

"There's also the inconvenient fact that corporations are nothing more than an aggregation of individuals (investors, workers, managers, etc). Each of these people have first amendment speech rights. Why exactly should those rights be destroyed simply because they are exercising them collectively instead of individually? (hint: they shouldn't)"

The same can be said for Churches.
22 months ago: Then let each individual speak, that is their right. I will not agree that a corporation has the same free speach rights as an individual and neither do churches.

One justice does not a majority make.

Mobs are an aggregation of individuals too. Shall we let them speak for us too?
Out Of The Box
Out Of The Box
 Moderator
22 months ago: To us, not necessarily for us.
scotmanster
scotmanster
22 months ago: You and I agree on that Six it is one mans word it should not be the end all means to end the discussion I just found it to be alot like I think.

I once thought that corporations should not be involved in elections either but it is a valid point the Justice makes. Plus I am tired of all this anti-gun propaganda banning firearms. This gives the NRA the voice to fight them. It will help subside the amount of anti-gun legislation being submitted by letting voters know who is pro gun and who is anti-gun. I don't propose the NRA to make the decision of who I vote for but they have the means to check the background of the candidates. I think it is a step in the right direction but it is a double edged sword at the same time.

I'm in the middle of writing up an article about Citizens United v. Federal Election you might find interesting.
22 months ago: Scot, link or send me your article.

Unfortunately too many times what is preached in the pulpit becomes the vote at the polls, even if the candidate is a scumbag or the vote in question is unfair to others. Works the same with unions and corporations IF the people surrender their will to others. It happens more in a setting where what others think of you becomes more important than your individual wants and desires, sometimes even your needs, many times the individual is so enmeshed in the whole religious scene that they cannot distinguish their own needs from those of the church. You (as a church member) would rather go along with the crowd than take a chance and be found out to be a "traitor" to the professed ideals of the leaders of the congregation. Guilt trips can be life altering, especially when you get tossed out of a group because you didn't go along with it. The old "you're either with us or against us mentality" and in a church setting, you might as well pack your bags and start looking for another spiritual home because if you don't vote the way they want, they will shun you and to the devout, that's like putting you in hell without judgment day coming first.

Better to keep politics on the outside of a church. That way there is no question of impropriety and everybody stays friends.

The closest a church/congregation needs to come to politics is encouraging everyone to vote for the candidate of their own choice.
Out Of The Box
Out Of The Box
 Moderator
22 months ago: I agree, as long as the same standards are upheld by unions, and all other organizations not specifically identified as political in nature.
scotmanster
scotmanster
22 months ago: http://www.rantrave.com/Rave/Citizens-United-v-Federal-Election-Defines-Freedom-of-Spee.aspx

I did not get a chance to finish it I wanted to relate to the reader all the benefits of this landmark case.
22 months ago: Unfair is probably the wrong term to use concerning a vote. Uncostitutional, unlawful, against the priciples of fair and honest commerce, advantages for some and an undue burden for others, are a few replcements that come to mind.
scotmanster
scotmanster
22 months ago: I am not a church member I think we already went through that though.
scotmanster
scotmanster
22 months ago: Scratch that last comment I see what your saying six but if you look at it like that the same can be said for family relationships. Like my father he has always voted republican at a young age I thought I would too be a republican becuase the fear of letting him down. But I hold to no party line. My father certainly does not like it but he learned to deal with it. We each have a freedom to think for ourselves.
scotmanster
scotmanster
22 months ago: "I agree, as long as the same standards are upheld by unions, and all other organizations not specifically identified as political in nature."

Yes totally agree OOTB but that is no longer the case after the January ruling. Non-profit organizations, corporations and unions now have the freedom of speech during election campaigns and can buy media time to support their views.
22 months ago: Yep, moms a republican, almost always votes the party ticket, dad votes for whoever and I hope I vote for the best candedate. We differ on a lot of issues, doesn't help that they are both deeply religious and I'm not, sometimes it's a three way split. She is also active in the local MADD chapter so we always differ on the alcohol issue. Like many, she considers the burden put upon alcohol consumers as justified while she loads up on caffeine and perscription drugs with no regaard to how much it might impair her abilities.

Remember me mentioning something about brainwashing our children? Sometimes the indoctronation we put our kids through as they grow up, church, politics, race relations, sexism, patriotism, can bite us in the butt later on in life.

And then there are the unions, corporations, clubs, organizations, gangs and all the other groups that make life fun!

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