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rug

(82,333 posts)
Fri Jun 15, 2012, 01:07 PM Jun 2012

Is it time for religious groups to lose their tax exemption?

Jun. 15, 2012
By Kimberly Winston, Religion News Service

How much money does the U.S. government forgo by not taxing religious institutions? According to a University of Tampa professor, perhaps as much as $71 billion a year.

Ryan Cragun, an assistant professor of sociology, and two students examined U.S. tax laws to estimate the total cost of tax exemptions for religious institutions -- on property, donations, business enterprises, capital gains and "parsonage allowances," which permit clergy to deduct housing costs.

Their article appears in the current issue of Free Inquiry magazine, published by the Council for Secular Humanism, an organization of nontheists. U.S. tax law grants religious groups and other nonprofits the exemptions because of their charitable nature.

And while the authors do not claim theirs is a comprehensive or unbiased appraisal, their findings have raised eyebrows in the nontheist community, which has long sought to eliminate the tax exemptions on the grounds that they unfairly favor religious institutions.

http://ncronline.org/news/politics/it-time-religious-groups-lose-their-tax-exemption

41 replies = new reply since forum marked as read
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Is it time for religious groups to lose their tax exemption? (Original Post) rug Jun 2012 OP
Long past time. Shadowflash Jun 2012 #1
Definitely the Catholic Church HockeyMom Jun 2012 #2
You're making a case for discrimination? It should be ANY church, or it won't stand legally. nt patrice Jun 2012 #6
Without enough of the right kinds of information about the poster above and the situation, 2ndAmForComputers Jun 2012 #17
You failed to notice that I asked a question. Instead of make an outright accusation, as in the case patrice Jun 2012 #18
Shall we take it then, that you are in favor of attacking the Catholic Church exclusively? nt patrice Jun 2012 #19
And, btw, how about responding to the legal point which I raise here? nt patrice Jun 2012 #20
Or does the OP subject matter less than some other, more personal, agenda? a Lack of reply = yes. nt patrice Jun 2012 #21
Have a nice day. 2ndAmForComputers Jun 2012 #22
You too. & Who's that in this .gif? patrice Jun 2012 #26
That's a no brainer. It's way past time for them to loose their ladjf Jun 2012 #3
I am not opposed to providing tax-exemption for the charitable work they do.... Swede Atlanta Jun 2012 #4
How about a compromise? turtlerescue1 Jun 2012 #11
But what if we don't accept that health care should be for profit? cbayer Jun 2012 #32
In order to answer this question, don't we need to begin with WHY we give them this $71 billion patrice Jun 2012 #5
For $71 BILLION a year (and that doesn't even count historical $$$) there should be NO poor. nt patrice Jun 2012 #7
Yes, if they're found to be political. richmwill Jun 2012 #8
I am wondering what would be a good method to go about doing that. patrice Jun 2012 #9
Your thoughts are a good question for discussion citysyde Jun 2012 #13
Yes, observable behavior is a good subject. Do you include hiring and firing practices? patrice Jun 2012 #15
Unfortunately, I think the courts and case law are already on record citysyde Jun 2012 #16
Tax the profits. rrneck Jun 2012 #10
That's another area where I think we need some new standard of .. citysyde Jun 2012 #23
Not that complicated, really. Just institute progressive taxation. daaron Jun 2012 #27
So where and how do you set the standards for pastors in Iowa versus citysyde Jun 2012 #28
Like I said, an equitable progressive taxation scheme. daaron Jun 2012 #29
I think there's a difference rrneck Jun 2012 #31
My Recommendations longship Jun 2012 #12
Interesting thoughts worth my deliberation! citysyde Jun 2012 #24
As of the early '90s.... Igel Jun 2012 #34
Thank you for those clarifications longship Jun 2012 #35
Really nice, clear and useful information. Thanks so much. cbayer Jun 2012 #36
Perhaps counterintuitively my answer is a qualified no. dmallind Jun 2012 #14
Respectfully, I'm not sure I agree, because, as we have seen,... citysyde Jun 2012 #25
It's a fine line, but my bias is yes they should dmallind Jun 2012 #37
yes Angry Dragon Jun 2012 #30
I would be very curious about how this number compares to the amount cbayer Jun 2012 #33
So your point is that they would stop doing this if they were taxed? dmallind Jun 2012 #38
Massive profits are one thing, but most mainline churches operate on a shoestring. cbayer Jun 2012 #39
Only if you're okay with them campaigning from the pulpit and getting donations from offerings. n/t cynatnite Jun 2012 #40
This sounds like a classic case of "be careful what you wish for"... ButterflyBlood Jun 2012 #41

2ndAmForComputers

(3,527 posts)
17. Without enough of the right kinds of information about the poster above and the situation,
Fri Jun 15, 2012, 05:26 PM
Jun 2012

we don't know if the reference was a religious discrimination motivate bashing or not.

It does religious equality no good to cry wolf EVERY time, whether or not something is actual religious bigotry or just a statement of fact, because it only confuses and antagonizes people whose only crime is that they aren't "tolerant" enough to avoid the problems that CAN arise from perhaps a somewhat too plain statement.

patrice

(47,992 posts)
18. You failed to notice that I asked a question. Instead of make an outright accusation, as in the case
Fri Jun 15, 2012, 05:30 PM
Jun 2012

of the example to which you refer.

patrice

(47,992 posts)
21. Or does the OP subject matter less than some other, more personal, agenda? a Lack of reply = yes. nt
Fri Jun 15, 2012, 05:36 PM
Jun 2012
 

Swede Atlanta

(3,596 posts)
4. I am not opposed to providing tax-exemption for the charitable work they do....
Fri Jun 15, 2012, 01:30 PM
Jun 2012

just as we do for other non-profits. If you are a church and you run a soup kitchen, your costs for that service are exempt.

But otherwise they are in business, the business of catering to the spiritual beliefs or needs of individuals.

If we are going to accept that providing health care should be for profit, why shouldn't we accept that providing spiritual "health care" shouldn't be subject to the same rules?

cbayer

(146,218 posts)
32. But what if we don't accept that health care should be for profit?
Sat Jun 16, 2012, 12:14 PM
Jun 2012

Does that change your argument?

patrice

(47,992 posts)
5. In order to answer this question, don't we need to begin with WHY we give them this $71 billion
Fri Jun 15, 2012, 01:35 PM
Jun 2012

in the first place? 1. It's a subsidy, WHY ARE WE SUBSIDIZING THEM?

- & -

2. Why aren't organizations such as these classified as BUSINESS:

http://www.nacba.net/Pages/Aboutus.aspx
http://www.ecfa.org/
http://www.religionnews.com/

patrice

(47,992 posts)
9. I am wondering what would be a good method to go about doing that.
Fri Jun 15, 2012, 01:55 PM
Jun 2012

Obviously, if they mention a candidate or candidates, we can say they are being political, but, first of all they are not so stupid that they'd do that very obviously, especially their leaders, and, second, how does anyone know who is saying what and being REWARDED in private church supported activities?

So, I don't see how going for "candidate" evidence that they are political is going to work.

What if there was an attempt to parse their public statements on the issues? Something on the order of the now defunct Fairness Doctrine: e.g. For every "Homosexuals are evil" meme there MUST be a counter, TTE, "Homosexuals are as good as anyone else" meme.

 

citysyde

(74 posts)
13. Your thoughts are a good question for discussion
Fri Jun 15, 2012, 03:43 PM
Jun 2012

I would have to think about this a bit more, but, for me, it would come down to behaviors versus beliefs.

As we all know, more and more religious organizations have now somehow affiliated themselves with the right wing political entities of our nation, more than other "liberal" churches have actively affiliated themselves with more liberal or progressive political entities.

I see no problem with churches carrying out charitable work, feeding the poor, delivering state of the art medical care under national law to each and every person, regardless of religion, race, or other status.

But, as we know, some churches are actively engaged in denial of rights and engaged in denial of services across the board, to women, to GLBT folks, or to fostering some sort of disparagement or bullying of one group or another. Those behaviors rate a denial of status of tax exemption, since they are both not in keeping with our Constitution, nor our federal and state laws, nor in keeping with generally accepted principles of what a charitable or religious organization is meant to be.

Then we have the churches with thousands of members, the churches that actually give money to one ballot issue or another (e.g. Prop 8), those are clear violations of election laws, those are not religious nor charitable behaviors, those are clearly political acts.

For any church or religious organization who obstructs or interferes or campaigns or openly advocates for a specific political or ballot outcome, that church loses tax free status for the entire year in which they engage in such activity.

For any religious organization to deny care to a certain group, or who advocates a violation of federal or state law or entitlement to any group of individuals, that organization also loses tax exemption for the year or years in which such activity happens. This would include birth control limitations, abortion limitations, delivery of health care to people with aids, people of a certain ethnic group, or other broad and specific group of Americans.



What churches CAN do:

Speak out upon any issue, encourage voters and voter registration, assist people in securing needed services from non-religious sources.

That's my proposal.

patrice

(47,992 posts)
15. Yes, observable behavior is a good subject. Do you include hiring and firing practices?
Fri Jun 15, 2012, 04:11 PM
Jun 2012

If you have ever talked to a state level EEOC office, they are very discouraging about how hard it is to establish discrimination and pretty much say that they are not interested in pursuing anything that isn't either race-based or sexual-orientation.

One of the reasons this is an important question is that discrimination of various kinds can affect quality of care issues in health care.

 

citysyde

(74 posts)
16. Unfortunately, I think the courts and case law are already on record
Fri Jun 15, 2012, 04:52 PM
Jun 2012

the courts and case law are already on record as allowing religious organizations to hire and fire whomever they wish.

Of course, quality of care is affected by individual deliverers of the care. But I think religious organizations have powers and rights there that are well-established in law, since they are "private" organizations.

I don't agree with much of that, but I cannot go against established litigation precedents. Nor do I see a way of tying that hiring/firing activity to tax status. It's just too small a line to be drawn.

rrneck

(17,671 posts)
10. Tax the profits.
Fri Jun 15, 2012, 02:02 PM
Jun 2012

When faith becomes a product, treat the church like any other media/entertainment enterprise.

 

citysyde

(74 posts)
23. That's another area where I think we need some new standard of ..
Fri Jun 15, 2012, 06:08 PM
Jun 2012

"reasonableness".

I read about leaders of churches having 3 luxury homes, several cars, boats, owning television studios.

I read about individual churches with 10,000 or more "members" or "worshipers".

These are not "churches", nor local "religious organizations". They are businesses with a hidden or obvious "profit motive".

I'm at a loss as to where and how to draw the line, however. Does a minister in a small town in Iowa or wherever, who lives in a church-owned parsonage, and earns $20,000 a year get special dispensation from taxes while one in Chicago or New York who lives in a great home on a major street in a downtown area and earns $100,000 a year deserve the same dispensation?

How does one decide where the line is drawn? I think we would have to use "average" income levels of the area, perhaps, but this gets into some very muddy areas with popular churches in rural areas, etc.

 

daaron

(763 posts)
27. Not that complicated, really. Just institute progressive taxation.
Fri Jun 15, 2012, 07:22 PM
Jun 2012

If the church and ministers take in less than $X and $Y, then they aren't taxed at all. If more, then tax as income.

 

citysyde

(74 posts)
28. So where and how do you set the standards for pastors in Iowa versus
Fri Jun 15, 2012, 10:05 PM
Jun 2012

those in NYC or DC or LA?

Do they all have no rights to TV time, or only those with glass cathedrals in LA?

How about some pastors in South Dakota, with a house, and a small church, and $200 a week, and have their family on food stamps? I have met a few on food stamps part or all of the year. Some male guys with wives and 3 kids, and getting $200 a week all year, tax free. Food stamp eligible.

Yeah, that's happening.

 

daaron

(763 posts)
29. Like I said, an equitable progressive taxation scheme.
Fri Jun 15, 2012, 11:38 PM
Jun 2012

The poor minister ministering to the poor wouldn't pay a cent, just like those on food stamps. Just put the poverty level up a lot higher for pastoral exemptions - say a quarter-million a year is tax-free, and the surplus is taxed as normal income.

rrneck

(17,671 posts)
31. I think there's a difference
Sat Jun 16, 2012, 11:29 AM
Jun 2012

between "preaching to the flock" and "broadcasting". When the church service becomes a media event, the organization starts to look a media/entertainment business. Churches, like corporations, profit from conflating the "country church" image with a media empire.

But I don't have an adequate solution for regulating the scale of how people get their emotional crank turned.

longship

(40,416 posts)
12. My Recommendations
Fri Jun 15, 2012, 02:49 PM
Jun 2012

I am no expert here, but there is a very workable solution which is consistent with most law.

1. Enforce IRS rules. If a church advocates for a candidate, they lose tax exemption. Period. End of discussion. They can reapply for tax free status again, but not until the next election cycle. No laws need be changed to do this. Any church then has a choice of being tax free and non-partisan, or pay taxes and partisan.

2. Modify the law for the parsonage exemption. Churches should not be able to get away with using it to enrichen lavish lifestyles, private planes, multiple estates, etc. The parsonage exemption should be limited to the cost of something like a single average middle class household, and not one penny more. Or something like that.

3. Salaries of clergy and staff should be taxed at regular rates.

That is a simple solution. Part 1 is already basically in place and only needs enforcement. Part 2 is probably a single bill. I don't know about part 3.

I don't know if this will work, but it's simpler than just taxing all the churches, which would never get through Congress.

 

citysyde

(74 posts)
24. Interesting thoughts worth my deliberation!
Fri Jun 15, 2012, 06:09 PM
Jun 2012

I just don't know how to draw the lines, but you have offered some good ideas.

Igel

(35,356 posts)
34. As of the early '90s....
Sun Jun 17, 2012, 12:33 AM
Jun 2012

The parsonage exemption was good enough for a fairly normal middle class house. It could be abused, but to do so would be very expensive for a church. Few would engage in that kind of practice for long. Some few probably do. Americans have a bad habit of making laws that hurt many in order to keep a few from profiting too much.

Salaries of clergy and staff are taxed at regular rates. They pay the usual taxes any non-government employee would pay. If a church is big enough to have a DCP, they can be FICA-exempt.

There's a small and vanishing group of clergy that exempted out of FICA back in the '50s or early '60s. They paid no FICA and are prohibited from buying into Social Security. Their immediate dependents aren't covered by Social Security, either.


Churches that the IRS are told engage in partisan politics--which doesn't mean taking positions more closely identified with one side or the other, of course--are routinely investigated. They can be warned, fined, or lose their exemption.

This, of course, are true of many other kinds of non-profits. If the Nature Conservancy were to support a presidential candidate, I'd expect that it would start selling off property and rights to pay taxes.

longship

(40,416 posts)
35. Thank you for those clarifications
Sun Jun 17, 2012, 01:12 AM
Jun 2012

But the parsonage exemption is grievously exploited by the mega-churches who use it to enrichen their clergy with extravagances that even Rmoney would envy.

An exemplar of this is the prosperity gospel Trinity Broadcasting Network headed by Paul and Janice Crouch and their evil spawn who have enrichened themselves far beyond any rational level using the parsonage exemption and the contributions of their appropriately termed sheep, who they fleece by way of their broadcasts. Another is the outright fraud, Bennie Hinn, who instead of promising prosperity, promises healing which will undoubtedly never come to the sheep he fleeces.

We've all seen this for some time and it is an a rank abuse of a law whose purpose is to help provide a living for the usually poorly paid clergy. I have no problem with the exemption in principle, but when it is abused like it clearly is... Well, something should be done.

Thanks again.

cbayer

(146,218 posts)
36. Really nice, clear and useful information. Thanks so much.
Sun Jun 17, 2012, 11:43 AM
Jun 2012

I grew up in parsonages - modest homes in modest neighborhoods - but I know there is potential for abuse there.

dmallind

(10,437 posts)
14. Perhaps counterintuitively my answer is a qualified no.
Fri Jun 15, 2012, 04:11 PM
Jun 2012

We can and should certainly make some changes. Housing allowance should be capped at local median so we don't subsidize Rick Warren's mansions; any overtly electioneering activity should reduce tas deductibility, and for-profit subsidiaries that are not purely pastoral should be taxed as businesses - including book sales, external speaking fees, merchandising etc. And we absolutely should not subsidize church buildings, utilities, access roads, traffic signals and so on obviously.

But the actual operations of a church serving a congregation of any religious group? Nope. The separation has to work both ways. If I'm going to say "Church - keep out of the political system" I have to also say "Political system - keep out of the church" to be fair and honest. I have no problem with that.

 

citysyde

(74 posts)
25. Respectfully, I'm not sure I agree, because, as we have seen,...
Fri Jun 15, 2012, 06:16 PM
Jun 2012

churches or various religious groups use their exemptions to promote hate, to deny services and care and medical options to certain groups of people, claiming they have a "right" to do so.

Those are "political" acts!

I would like to continue this discussion with you, and really wonder if you really think that the government should unilaterally stay out of the teachings and de-facto political actions of the church.

dmallind

(10,437 posts)
37. It's a fine line, but my bias is yes they should
Sun Jun 17, 2012, 09:14 PM
Jun 2012

The difficulty lies in deciding what is political speech and what is doctrinal or theological speech. We cannot get into the business of having a state decide what the church should or should not teach as part of its belief system. Certainly from my point of view if we outlawed any unpleasant or objectionable speech from churches we would have to close almost all of them. Admittedly typical judgment may be a little less antagonistic, but the point remains the secular authorities should not be in the business of deciding what is appropriate religious speech as long as it does not contradict laws of the state.

There is however a difference when churches start to electioneer overtly. While I obviously disagree with statements like this I believe it should be acceptable for churches to say that the poor should starve or that the rich should be untaxed if that is even tangentially an outcome of their belief system. But there is a difference between doing that and saying vote for Smith or vote against Jones. The church should not be complicit or involved in any way in elections. But it should remain free to influence and direct the thoughts of its congregants if they are willing to accept them.

cbayer

(146,218 posts)
33. I would be very curious about how this number compares to the amount
Sat Jun 16, 2012, 12:21 PM
Jun 2012

that religious organizations contribute. That is, how much would it cost the government to provide the services that religious organizations currently provide.

dmallind

(10,437 posts)
38. So your point is that they would stop doing this if they were taxed?
Sun Jun 17, 2012, 09:16 PM
Jun 2012

I'm pretty sure we could get real charitable donations deducted just like anybody else for them to while still taxing the massive profits from their nonreligious operations.

cbayer

(146,218 posts)
39. Massive profits are one thing, but most mainline churches operate on a shoestring.
Sun Jun 17, 2012, 09:34 PM
Jun 2012

Editing to say that I really just made that up, but I think it is likely true.

I would look it up, but my brain is soft right now.

cynatnite

(31,011 posts)
40. Only if you're okay with them campaigning from the pulpit and getting donations from offerings. n/t
Mon Jun 18, 2012, 12:27 AM
Jun 2012

ButterflyBlood

(12,644 posts)
41. This sounds like a classic case of "be careful what you wish for"...
Mon Jun 18, 2012, 01:21 PM
Jun 2012

Right now churches can't get involved in political campaigns or lose that tax exempt status. If you remove the tax exempt status anyway, there is nothing preventing that from happening. Are you looking forward to megachurches raising money for Republicans and running GOTV campaigns? Lots of states are moving more towards vote by mail, so some churches could even go as far as to set up programs to "help people vote" where people sign up for a mail-in ballot and drop it off for the church to fill it out and send it in (they'll promote it as "biblically-centered voting" or something like that.)

Seriously this would not be good. It'd be like Citizens United all over again.

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