Top 10 Reasons Churches Should Not Be Tax Exempt

Top 10 Reasons Churches Should Not Be Tax Exempt

 

Churches make that money! $$$
Churches make that money! $$$

The purpose of government is to provide law and order in society. They recognize that people have different beliefs, and should operate in order to protect the citizens from unnecessary conflicts that may arise from these beliefs. Another way you to consider their role would be to see government as a necessary body to provide the infrastructure with which we can pursue our “happiness” as defined by our social beliefs. To succeed in this role, government must meet two main requirements; first, they need the resources to provide such infrastructure and second, they need to take into consideration all relevant interests under their mandate.

Lets take a second to explore both of these requirements. Government by itself and in the purest sense has no real resources to speak of, only the ability to define and implement law. Law is essential for a government to function, and is guided by the overall mandate for which the government was defined in the first place. Throughout history, man developed social beliefs, eventually forming an ideal to which a government was built in order to protect this ideal through law. Defining and implementing laws may be relatively straightforward in a small village of 20 people, but in today’s world, that translates into a wide range of things. Legal professionals must interpret and maintain laws, police and civil services enforce or protect what those laws stand for, physical infrastructure like roads facilitate the enforcement and protection of those laws, etc. To maintain all of these requirements, there is a very real cost, one that the government obtains via taxation and the modern economy.

10) Other Entities Indirectly Shoulder the Burden of the Church’s Omitted Tax

If Churches Don't Pay, We all shoulder the burden
If Churches Don’t Pay, We all shoulder the burden

“Those who use must contribute.” The modern tax system is an interpretation of this adage, guided by the founding principles of government. While the tax figures may not be the same for all, they do reflect the interpretation of equality among those that benefit from government services. To exempt one beneficiary from such taxation responsibilities forces the other beneficiaries to unfairly shoulder their tax burden, while giving them no additional benefits. The church and religious institutions are an example of a beneficiary of government services. Whether they choose to accept the services or not, they are subject to the same protection as everyone else and they enjoy the same social peace effected by governments existence and effective implementation of laws.

Because they benefit from government, they must also contribute to sustaining the government. To not do so is simply unfair, as it would result in other constituents indirectly bearing the tax burden while not gaining any additional benefit. Because the government doesn’t get anything from churches but still provides for them (infrastructure, legal rights, etc.), they now have to collect more tax. Who do they collect more tax from? Regular citizens and organizations. If benefits are distributed without discrimination and we are all equal under the eyes of the law, churches should pay tax like every other constituent. Quite simply, it is unfair for churches and religious institutions to reap benefits from government, whether fully realized or potential benefits, without paying for it in equal measure like everyone else.

9) Exemptions Indirectly Enforce Faith on Everyone

Church Tax exemptions spread the word, the wrong way
Church Tax exemptions spread the word, the wrong way

In addition to an unfair shouldering of costs, tax exemptions to the church also effectively force non-believers to advocate religion. True freedom to choose your own religion or faith implies that no individual should be subject to shouldering any burden related to any religion he or she does not choose to practice. As explained above earlier, the cost of the infrastructure and everything else that allows churches to propagate and practice their respective religions has a real economic impact and a real cost. Where does this funding come from if churches are tax-exempt? Forcing an individual to pay for what is effectively the propagation and practice of religious beliefs that they do not believe themselves is unfair and unconstitutional for most modern governments. If modern society and government is founded on freedom to choose, it should not make you pay in tax for the beliefs of others that you do not believe.

8) Restricts Other Progressive Social Elements

Church non-profit status restricts other social good
Church non-profit status restricts other social good

Conceptually, this leads to the second consideration of government, and that is to take into account the interests of relevant parties and ensure that they are not unnecessarily restricted according to their founding mandate. To exempt churches from taxation unfairly restricts the ability of other social elements that deserve to progress, and thereby goes against what the government was built to do in the first place. While this may seem far-fetched, the simple truth is that the only lasting government system today is based on the foundational belief in the right of all constituents to pursue their interests with equal opportunity. For this system to work, all the elements have to be implemented in a fair manner. A failure in one element of the system creates imbalances, and eventually a precedent to undermine the purpose for which the system was founded in the first place.

Let me give you an example: In a system where theft is viewed as a heinous crime, the punishment of the crime should reflect the belief that the crime is heinous. Should a thief be allowed to go free without being punished, this will set precedent for future thieves to get away with theft, thus eroding the belief that theft is a heinous crime, a concept that the system was built upon in the first place. In governments where equality to progress is a belief that is highly valued, to favor one constituent by providing it with a tax exemption effectively undermines that selfsame concept of equality. Had the government been founded with something like the protection of religious rights as a core, then this would be understandable.

7) Violates Separation of Church and State

Church non-profit status violates the separation of church and state
Church non-profit status violates the separation of church and state

Understanding why this exemption is no longer necessary can be helped by a quick look into the past. Historically, Church and State were not separate things. Tax exemption for the church was first recorded in the Roman Empire and was granted by Emperor Constantine. At that point, religion was used primarily as a method of ensuring order in society. Education standards were much lower and for the common slave to understand the concept of human rights as a valid enough reason not to murder his master was still very much unheard of. The fear of God however, proved to be significant motivation to prevent such acts, which are now considered barbaric and illegal. Later on in our history, society realized that we need both Church and State, but they must be separate due to the abuse of power. Such separation meant that government now operated independent of religious influence and that churches were now a constituent of government and moral authority only. Failing to tax churches violates this separation of church and state.

Constituents under government have to be treated equally, to provide financial benefit to one indicates the perspective that one particular constituent is more important than the other, which is not what modern government is founded on. The taxation is merely a benefit carried over from past practice during a time when the church also served as a state authority. The law has been changed for decades, state and religious powers are now separate and should be treated as such. Government should be treating religious believers and non-believers equally; this is the foundation of modern day government. If they are to be treated equally, to treat religious donations as non-taxable places preference on the believer over the non-believer and is an extension of the very same bias that the separation between church and state serves to eliminate.

6) Churches Don’t Exist Primarily to Provide for the Citizen: Governments Do

Governments govern. Churches do not.
Governments govern. Churches do not.

A church or religious institution does not exist for the sole reason of providing justifiable benefits to citizens for which the government is responsible. Unlike police services, which fall under the “protection of citizens” mandate, a government is not responsible for your religious instruction or worship. This is the whole point of freedom of religion! It is your choice, and not the government’s responsibility to force a choice on you. As a direct result, the government and therefore the taxpayer should not have to pay for it. Churches have a good purpose, which is to provide a place for religious worship and guidance in the form of religious instruction. However, we emphasize that such religious guidance is simply not the responsibility of the government. If a church wants to operate to provide such instruction or worship that is completely justifiable, but they must operate under equal terms like any organization.

We’re not saying that no organization can receive exemptions. The separation between church and state led to the determination of taxation rules and regulations from a secular standpoint. Naturally, exemptions from tax do have justifiable basis. For example, secular non-profits like homeless shelters provide a service that benefits citizens who are unable to provide for themselves. The state’s constituents are its citizens. This homeless shelter exists to provide for citizens, and as such deserves an exemption. This is the state indirectly caring for its constituents by allocating resources in the form of tax exemptions.

5) Churches are Not Purely Non-Profit Organizations

Churches, like people, love money. There are ulterior motives
Churches, like people, love money. There are ulterior motives

On the subject of the purpose of tax exemptions for true non-profit organizations, another compelling reason to remove tax exemptions for churches is that they are not non-profit organizations in the truest sense. At first glance, a church or religious organization may seem like a non-profit organization because they do not sell tangible products and their objectives for existing are not the same as most corporations in the economic sense, it is important to consider that they still offer a service for which they are essentially compensated for. The service that they offer is religious or spiritual instruction and worship. In the same way automotive or fitness clubs offer lifestyle and health instruction and a place to facilitate this instruction, so do churches provide a form of instruction and a place to facilitate it. There are many striking similarities that clearly indicate the business transactions that churches do on a regular basis. They provide a service, venue and merchandise similar to a local gym providing trainers, gym equipment and sports merchandise. Churches also collect revenue in the form of fund raisers, revenue from merchandise sales and donations that are constant enough to be classified as revenue. At this point, it is important to distinguish between the non-profit aspect and the charitable aspect of churches and religious institutions. The churches themselves exist for charitable reasons, but facilitate transactions and are not non-profit in the truest sense. As such, they must be taxed the same way.

4) Creates a Real Economic Cost

Failing to tax churches is a missed opportunity
Failing to tax churches is a missed opportunity

Failure to validly tax churches has a very real economic cost as well. Most of the western economies are currently in crisis, with the average taxpayer shouldering national debt repayment even several generations down their line! In times like these, being precise and clear with taxation has such a significant impact. Churches in the United States own close to 500 billion dollars in property that remains untaxed. Even more compelling, 2011 statistics indicate that New York City loses close to 627 million dollars in property tax from religious institutions.

Need more compelling figures? The Church of Scientology’s annual income is estimated in excess of 500 million dollars. Imagine these figures magnified globally! This economic amount can contribute to the resolution of the current economic crisis. On the subject of using state resources, churches are usually heavy users of local resources in the community. They usually require large areas of land, which are in turn not taxed and often provide their services 24/7 (untaxed utility usage).

3) Incentive for Abuse

Church Non-profit Tax status has been and will continue to be abused.
Church Non-profit Tax status has been and will continue to be abused.

One of the biggest reasons goes beyond their economic impact. When it all boils down to it, the failure to tax churches has been a constant source of abuse time and time again. Like the global financial crisis shows, things spin out of hand when you give one particular sector too much leeway or too much power. For religious institutions to abuse their power is sadly not new to society, and was at one point the single most important reason why the public felt that there needed to be a separation between church and state. The concept of a god often implies that the deity is all-powerful and commits no errors. However, mere mortals commandeer these churches, and we are prone to mistakes and greed as well. Giving them too much power would be a mistake.

It is important to note that most tax laws do not make clear distinctions between real religions and fraudulent religions, if any distinction is made at all. No serious investigations into the religion to determine if it fits the criteria of “valid” religion is ever made. This is because it is essentially tied to our natural right to our own religions, making this type of investigation difficult to conduct. Naturally, more unscrupulous individuals seek to use these types of inefficiencies to facilitate fraudulent crimes and tax evasion. Scandals emerge about institutions that overcharge members to attend or demand portions of member’s income in payment for the religion. More brazenly, religious institutions that advocate a rejection of material wealth or a form of poverty as a cornerstone of their religious mantra are caught with Rolls Royce cars or even private aircraft! If property for religious institutions and churches is tax exempt, how difficult would it be to start your own religion and buy all the property you want for religious reasons? How difficult it would be for a charismatic individual to convince a large number of superstitious people that contributing 1000 USD per person monthly would bring them to Heaven? How difficult a proposition is that given that a similar charismatic individual was able to convince a large number of people to commit mass suicide in the name of a “religious belief” (e.g. Marshall Applewhite). Clearly the propensity for this law to be abused is significant, and results in economic and social ills. Taxation of churches, while may not completely solve the problem, will make it significantly more difficult for fraudulent religions and churches to justify their existence.

2) Church Taxation Can Be Done Properly

Church Taxation can be done properly
Church Taxation can be done properly

The purpose of this article is not to bash any church or religion. We firmly believe that the taxation of churches is not as negative a concept as it seems at first glance. It is important to note that taxing churches and taxing charitable institutions is not the same thing. The taxation for churches can be done in such a way that it allows for the correct tax exemption of charitable institutions where justified. To tax a church does not mean that the tax will be blanket; charitable institution tax laws will still apply. What it will do is simply make it so that the segments of the church institution that are rightfully liable will be able to pay their dues to the government. The churches should be able to deduct based on the actual charitable actions they provide for citizens.

1) The Reason for Church Tax- Exemption is Obsolete

Church Non-profit status is as obsolete as the typewriter
Church Non-profit status is as obsolete as the typewriter

Finally, taxation of churches is necessary because the foundation for their tax exemption no longer applies. Historically, the primary reason that churches have not been taxed is because they have been interpreted from a legal standpoint to be non-profit. What this simply means is that they do not exist for profit as a business enterprise. This is not to say that churches operate as corporations selling services for the accumulation of economic wealth. The transactions made by churches and the resources that they consume are rightfully taxable. Previously, governments and laws assumed that religion would not be used for profit. Today, however, the “use for profit” can and should be interpreted in relevant ways. If reason did not progress and logic did not strive to be specific about defining problems and finding solutions, we as a society would still believe that the earth was flat. We would simply rely on past assumptions despite their clear flaws. The non-profit status of churches should not simply be assumed, because they used to be non-profit in the past. Governments should ascertain if a church truly operates charitably and tax the elements that rightfully must contribute to society.

What do you think?  Let us know in the comments below.

  • Applause

    Add, they’re teaching primitive myths as fact dumbing down generation after generation after generation..

    • Stewart R.

      What religions teach is their business, and if people believe it, it’s their business too. But when it comes to church mixing with legal stuff, that’s where i draw the line. agree cmpletely with this article!

  • Stewart R.

    Logical points! Unlike any other religionbashing ive seen. why is this not viral

  • clerickolter .

    And by not taxing churches fairly you give them that extra money to promote their message to the public, promoting the religion.

  • sss

    I don’t know why people attack churches for being tax exempt. NPR, the Jazz radio station, the Minneapolis Institute for the arts, most museums, the Minnesota Historical Society, all schools and many other institutions are tax exempt and receive donations… Being tax exempt doesn’t mean they don’t pay taxes, that’s another common misconception. The employees still pay taxes. The “profits” don’t matter for a tax exempt organization because the excess can never go to an individual (unlike a private for profit business). The excess money has to stay in the organization and be used for the organization’s goals. The only benefit is when individuals donate money, they can claim a tax deduction. However, the catch is that if anyone receives something in return for their donation, it cannot be considered tax exempt. This is the main difference between a for profit company and a tax exempt organization. If a church charges at the door, they can’t be tax exempt. Even if churches don’t get exemption on religious grounds, they can very easily get it the same way the Jazz radio station gets it. It is better to have a separate law for it, because it is easier to regulate that way. To just blankly say that it isn’t fair for a church to be tax exempt is usually very ignorant since most people don’t even know what tax exempt, or 501 c 3 means. If someone wants to argue that Churches shouldn’t receive tax exemptions, then all those other organizations that we consider to provide enrichment, shouldn’t receive tax exemptions either. Here is a list of reasons an organization can claim an exemption “Religious, Educational, Charitable, Scientific, Literary, Testing for Public Safety, to Foster National or International Amateur Sports Competition, or Prevention of Cruelty to Children or Animals Organizations”.. Churches could very easily claim exemptions on “Educational”. That’s how most artistic organizations, and musical organizations claim exemptions. If not educational, they can claim it on “Literary” and just focus on the bible. “Charitable” if they can claim that their organization helps the emotional state of the people who attend. Also, in Minnesota, there are a lot of churches that give things to the needy. Mostly, only churches do this. A big reason is because they get tax exemptions for religious reasons, and for religious reasons they help others. When you end that, you also end helping those people. Truly “charitable” organizations that claim exemptions based on charity have to prove that the people receiving their services or goods are below the poverty line. There are so many poor people in Minnesota that are above the poverty line and could use a warm jacket in the winter, or could use cheap dental care. Some people will cry out, what about goodwill? What most don’t realize is that goodwill receives it’s tax exemption because of hiring people with disabilities, not for helping poor people get stuff. There are very little to NO programs helping the poor and churches are pretty much one of the few that are doing this.

  • Pingback: A Progressive Defense of Tax Exempt Status for Churches – Approaching Justice()

  • Sss

    There really should be NO tax exemption for for anyone. Either people will pay for an organization to remain or they will not. Allowing any tax exemption is an invitation for abuse.

    Furthermore by giving a church a tax exemption the government has a club to dictate to the church what it can and can not do to some degree. The church is not meant to be a charitable organization. It is meant to properigate the faith. Churches should pass the torch (pay the taxes) to the government and let them deal with charity and social issues.

    The reason the church has maintained it’s status for so long is the fact that it can do more dollar for dollar than the government. Hurricane Katrina hit New Orleans it was faith based organizations that were able to respond quicker than government due to less red tape. Churches also operate with large volunteer staff or with staff that is severely under paid. Society does not appreciate this contribution and departure from the church’s core mission. Church’s need to stop pimping out out its resources and get back to taking of its membership and spreading the faith.

    The church really needs get back to it’s purpose and the government needs to pick up the slack it has dumped on the front door of the church. Let the church evangelize and the government run soup kitchens.

    Furthermore by removing the exemptions the church will be able to take a political role in society at large, lobbying for changes that are important to its membership.

    The removal of tax exemptions for churches is not an attack of the church but a liberation.

  • John Alexander

    It is not the government’s job to “provide.”
    Read “The Guardian of Every Other Right” and educate yourself author.

  • Just Thinking

    I feel that the church has taken advantage of the tax exempt laws and also take advantage of the patrons that are members that it is the calling of the Lord. If the income (donations) are used to purchase real estate then the monies spent on the real estate should be taxed and they should also pay property taxes. If income is being used for overhead to include payroll, then that should be exempt. We have allowed this to happen, some churches own blocks and acres of Real Estate for what? They will ask their patronage to put an extra amount of tiding (some churches will give them an actual amount they should donate each Sunday) to reach their goal to purchase property, build buildings, etc. We have government HUD housing that has been developed and owned by churches and overseen by their board member in the US. That is guaranteed capital for them from the Government. It should be required to report all income and how it was spent. Any endeavors (investments), property, housing, stock market, etc, anything the church invests and if it produces capital gain of any sort should also be taxed.

  • Denise Peterson

    ‘Before It’s News’ web sight and others

    4-26-16 Purging the Temple

    The Spirit of God says, “The 501c3, the 501c3, those that are eating of it are not eating from my tree! For when I told Adam and Eve do not eat from the Tree of the Knowledge of Good and Evil for you shall surely see, so it is with those that eat from the 501c3. For this demonic document that you have signed has now made you spiritually deaf, mute, and blind. Woe to those who continue to use this demonic system for you will be exposed and purged from this evil cistern.” The Spirit of God says,

    “Can you not see that you are taking a bribe? They will say it’s all about the money, and for that you shall be kicked from my tribe! Taking a bite from that apple has taken you from a spiritual body to a brick and mortar, and has placed you under the New World Order. For how can you be a part of my spiritual body when you have cut off my head? For those that don’t turn will surely fall as dead. Tear up the contract, repent, divorce Baal, and re-marry me, and l will remove the spiritual blindness so you can once again see. Come out of this! Come out of this before it’s too late, for my judgments are on those systems that I hate. Come out now for I will no longer tolerate!”

    6-12-16 Babylonian Prison

    The Spirit of God says, ”There’s a beast in the east that’s trying to arise that thinks he’s the best, but I have one in the west that will give him a godly surprise and take him down to the least. For this beast that has risen is no surprise, for my church is in a Babylonian prison, come out of her or it will be your demise!” The Spirit of God says,

    “The chaos and clatter that the earth is in, is directly related to the Babylonian box that the so called church is in. For my earth is moaning and groaning for my sons and daughters to arise with bliss. where is my Army that will send this beast back to the abyss? For how can you take on a beast when you’re deaf, mute, and blind? For all beasts are ancient and old, and lurk about seeking an enemy whom they can steam roll. For this beast has no teeth and lurks in the brush, trying to lure you into an ambush. Do not attack until you come out of her that Babylonian system, or you will fall prey and be decimated beyond comprehension.” The Spirit of God says,

    “For when my people realize the curse they are under, and come out, break the curse, then they will plunder. For as they come out of her with a mass exodus, there I will be, to restore her back to my body and I as the head she will have power, authority, and unity again and the enemy shall fall as dead! For you wonder why the world is so perverse, it’s because my church has forsaken her first love and is under a curse. Come out of her now don’t walk but run and do not wait, before you cross the point of no return for then it’s too late. Come back to me, come back to me and make me your first love I have dearly yearned, for some it’s already too late, for they have not learned.”