Tax-exempt Status for Churches Debated


May 9, 2012; Source: New York Times

With little fanfare, the New York Times hosted an online debate among five thoughtful people (actually six, but two wrote as a team) addressing the question, “Should churches get tax breaks?” That is, in part, should institutions of religious worship continue to be eligible for charitable tax-exempt status? In summary, here are the perspectives of the participants:

Mark L. Rienzi (senior counsel, the Becket Fund for Religious Liberty and professor of constitutional law at the Catholic University of America): Rienzi argues that religion is a “critical buffer” against the power of government. Therefore, the tax exemption for religion is in the public interest. “Religious exemptions are an essential part of our democracy,” he writes. “They provide breathing space for religious individuals and institutions to exist. They benefit all Americans, regardless of religion or lack thereof.”

Dan Barker (co-president, the Freedom from Religion Foundation): By giving churches a tax exemption, government is endorsing religion over non-religion, argues Barker, a former minister who candidly admits taking advantage of the minister’s housing tax exemption in the past. “Whatever public good might stem from some religious activity, it is no greater than that accomplished by secular groups. They should be treated equally,” he says. “A tax benefit should be justified by public accountability. Churches should be required to notify the I.R.S. of their intent to claim church status, to pay the same filing fees and submit the onerous annual 990 form, and reporting income and expenses, like all other 501(c)(3) groups. The current law gives unfair advantages to churches, which, unlike other nonprofits, do not have to disclose their financial activities…”

Winnie Varghese (priest-in-charge, St. Mark’s Church in the Bowery, New York City):  Varghese is candid about her self-interest. “If I were not religious, I might want to make religions, particularly conservative Christians, pay for the privilege of their bully pulpits,” she writes. “But I am religious—a progressive Christian—and I will argue for the tax-exempt status of religious organizations for only one reason. Moderate and progressive religion is overwhelmingly formed in the U.S., and it is an essential voice in national and international discourse. We are an important moral and ethical voice for society as a whole…”  While she excoriates conservative theology and “minimall” (mini-mall) churches, to Varghese, the tax exemption is to support her kind of church: “…we need to be intentional about what kinds of religion we nurture.”

Lawrence Sager (University of Texas School of Law) and Christopher L. Eisgruber (professor of public affairs, Woodrow Wilson School, Princeton University): The authors of Religious Freedom and the Constitution seem to defend religious exemptions so long as religion is not afforded rights that other exempt classes of organizations cannot obtain.

Susan Jacoby (author of Freethinkers: A History of American Secularism and The Age of American Unreason): Starting with the controversy over contraceptive coverage under the Affordable Care Act, Jacoby questions “the degree to which religious institutions should be exempt from equal protection requirements that apply to all other organizations that spend government money.” Citing examples mostly about the positions of the Catholic Church, Jacoby concludes, “If churches don’t like the strings attached to public money, they are free to refuse taxpayer subsidies.”

The five brief essays in the Times hardly come up with a definitive response. We’d love to hear your thoughts on the question posed by the Times: should churches get tax breaks?—Rick Cohen

  • Robert Baty

    Dan Barker may have claimed the income tax free ministerial housing allowance in days gone by, but he is now in the forefront of challenging the law that allows such things and I encourage folks to support that challenge. The law, IRC 107, has been on the books way too long and been used and abused beyond any legitimate purpose that might have been argued for it in days gone by. The Court is currently set to decide “standing” in that case any day now. I am hoping the Court does the right thing and allows “standing” so that it may then decide the issue on its merits.

  • John Quinn

    I think the parsonage deduction is particularly onerous, and many non-clergy (basketball coaches, admin assistants, etc.) take advantage of it which is unfair to us who are required to subsidize this loss of tax revenue. Same is true for property taxes- end of the day, people go to church to be entertained and inspirted- same as going to a movie or an opera; church property should be taxed at a minimum of the minimum tax rate for the taxing jurisdiction.

    I also think the deduction for donations to churches should be eliminated as the current law has taxpayers in general subsidizing the religious beliefs of others.

  • Frank Dorka

    It’s about time we took this “separation of church and state” to the next level. Who do they think they are, anyway? A business? Then let them pay taxes the same as any other business. Force them to be licensed and sue the pants off of them if they cannot prove the validity of their product!!!

    Catholics, aka: pedophilic abettors, should have no rights, as I see it. Let them go to the Vatican if they don’t like our fair and equal American ways.

  • Jess

    how about a link to the debate?

  • Mark Farris

    It is absurd religious institutions do not pay taxes. Churches use police and fire protection provided by tax money. They use city water and streets and no doubt free trash pick up. Time to carry their share of burden. No free rides for immaculate deception.

  • Chris hobart

    I’m with Susan Jacoby. They should be exactly as exempt as other non-profits. This includes staying politically neutral, and opening their books to verify their non-profit status. Any exemption on purely religious grounds is clearly unConstitutional.

  • rick cohen

    Hi Jess: The link to the source article of every newswire is right at the top of the newswire. The New York Times name is highlighted with the link, which is I also put the links to the separate statements by the debaters in the text, also by highlighting. Good luck.

  • Judy McNamara

    It is apalling that churches are sitll allowed tax exempt statis. I am in my seventies and have vitnessed pulpit politics growing and growing so now it is like a tree root invading a basement. The founding fathers never ever intended for this to happen. My father was born here, my grandfather was born in Boston, and my great grandfather was in Boston several years before that. I hate religion as it is the root of so much evil and so many wars. However everyone should be free to worship as they please but not on my dollar or that of other secular humanists. Me, my ethics are to good for god.

  • rick cohen

    Dear Chris: I recall a presentation by a national nonprofit leader during the Senate Finance Committee hearings of 2004 or 2005 or so, where she asked the audience, a large one, how they felt about adding nonprofit 501(c)(3) reporting and disclosure requirements to religious institutions. The notion received overwhelming support in the audience of nonprofit and foundation leaders, but from the dais the speaker noted that that was unlikely to even be raised, much less pushed in the nonprofit leadership panel that the Senate Finance Committee convened. People can debate the pros and cons about disclosure, but some greater measure of public disclosure requirements for religious organizations seems to be warranted in exchange for religious donations qualifying for charitable tax deductions. Just a thought…

  • Jack Shakely

    The discussion of tax deductions for religion should be bifercated. Churches, not the income generated by offerings nor the property owned by the church, should not be taxed. To do so would be a clear violation of the first amendment of the constitution forbidding the government from prohibiting the free expression of religion.

    A tax deduction for individual gifts to churches, on the other hand, provides choices that are anything but clear. Because only those individuals who itemize deductions (i.e. the wealthy) benefit from the charitable tax deduction to religion, it can be argued that the government subsidizes rich churchgoes, but not the poor. Since more than 70 percent of all Americans take the standard deduction, some people might argue that if piety is to be subsidized by government, shouldn’t that subsidy be across the board?

    The arguement that contributions to churches promote social welfare, health and education cannot be sustained by fact. A recent Boston College Law School study found that less than 20%, often much less, of contributions to churches go for “non-sacramental” purposes. In fact, the author says, many religious organizations are so exclusive and do so little for the community, they are little more than “spiritual clubhouses.”

    Having this discussion in twenty-first century America, however, is like arguing the number of angels on the head of a pin. As soon as we remove “In God We Trust” from our quarters, we might actually consider the subject seriously.

  • rick cohen

    Great ideas, Jack, as always. I think I’m sensing another Jack Shakely feature article for NPQ in the works…

  • Maybe you shouldn’t be speaking for “other secular humanists” and what they do with their “dollar”.
    Btw, your comment about religion and wars can be debunked completely.
    The Encyclopedia of Wars lists a total of 123 wars which were fought for religious reasons. (Phillips, Charles and Alan Axelrod. Encyclopedia of Wars. New York: Facts on File, 2005.) Yet the list of wars fought totals 1,763. This means that only 6% of all wars have been fought for religious reasons. The other interesting thing to note is that over 1/2 of these “religous” wars were waged by Islamic nations.