Clergy Housing Allowances Ruled Unconstitutional

Last week came the news that, in the latest legal success for secularist advocacy groups, a federal judge ruled that clergy’s tax-exempt “housing allowance” is unconstitutional. It is difficult to know exactly what the Founders would have thought of this issue, because a) there was no federal income tax until the early 20th century and b) there were no secularist advocacy groups suing over the public role of religion in 1776. However, this seems like another example of secularist overreach, with the judge implying that the government should prefer the absence of religion over its presence. The Founders – ALL of them – also recognized the beneficent role of religious groups in American life. When you consider that about half of the major Founders supported direct state (not national) support for religion, it is no stretch to think that they would have supported this kind of indirect support for clergy and congregations.

Certain evangelicals applauded the judge’s decision, saying that the policy really is unconstitutional, and that any kind of government support for religion corrupts the faith. I admit that I could see the point here, especially if the government started attaching more strings to the tax exemption. (A congregation can already lose tax-exempt status for “political” activity, and one can imagine the government threatening the loss of tax exemption for certain “intolerant” opinions, too.) But I also would encourage the evangelical critics to be careful about jumping on board with the secularists here. Given all the evidence of the Founders’ comfort with direct support for religion, should we really accept the secularists’ notion that tax exemptions for clergy are unconstitutional?

Remember, no clergy have to accept the tax exemption, and prudence would dictate that, if at all possible, pastors treat the exemption like Social Security benefits – realistically, they may well disappear. But especially for pastors of small churches, the exemption could really be a make-or-break deal financially. So, laypeople, before you applaud the secularists’ victory – which is of course subject to appellate review – ask yourself whether you’re prepared to cover the difference if your own pastor loses the housing allowance exemption?

See also Thom Rainer, “Thoughts on the Court Ruling on the Ministers’ Housing Allowance

Ethics and Religious Liberty Commission, “ERLC and Guidestone United in Protecting Pastors’ Housing Allowance

Joe Carter, “Federal Judge Declares Clergy Housing Exemption To Be Unconstitutional

  • kierkegaard71

    The question of constitutionality is ludicrous. Obviously, a clergy housing allowance tax break is constitutional. The whole question is phony liberal-speak. It is a separate question though concerning the wisdom of accepting tax breaks, including tax-exempt status. It is the rule nowadays: that which you subsidize, you control. I am a philosophical separatist myself, though not a consistent one. I still itemize charitable deductions, though with an uneasy conscience!

  • RustbeltRick

    I don’t know much about this case, but it seems like the issue at stake is very narrow — it deals with one benefit, the housing allowance, and whether it should be tax exempt. To paint it larger — as secularists wanting to stamp out public religion — seems a bit much, don’t you think?
    As to the issue itself, I think the benefit, in the vast majority of cases, is a very helpful thing for a very deserving group of people. I also assume that its abused in some cases (can a megachurch put a pastor in a tidy little mansion and claim this benefit, too? If so, maybe cap the benefit amount).

    • ortcutt

      Are the employees of non-church non-profit groups undeserving? It is difficult to explain why clergy are accorded tax-free housing benefits, but the director of a soup kitchen isn’t. There is still a provision in the tax code that allows someone to get a tax-free housing benefit if their residence in the housing is a requirement of the job. So, if someone lives in a rectory or is a live-in employee of a homeless shelter, that housing benefit is untaxed. This benefit is applied equally to churches and non-church non-profits, however, which is the way that things should be done.

  • kierkegaard71

    I wasn’t clear on my first comment so maybe I can state it a little better. Confining the discussion to constitutionality doesn’t address the merits of the clergy housing allowance. (It is only in the world of modern jurisprudence that a clergy housing allowance is unconstitutional, but, on the other hand, the federal government dictating the “gallons per flush” of every toilet in America is constitutional.) The challenge the author gives at the end of his article actually speaks, perhaps inadvertently, to the truth of the matter: it is in fact the sole responsibility of a church to support those of hers in full-time vocational ministry. What we depend on Caesar to grant, Caesar can just as easily disallow.

  • ortcutt

    It’s absolutely absurd to claim that this ruling is a preference of the absence of religion over religion. Clergy housing allowances were a special benefit that wasn’t open to employees of other non-profits. All that this ruling does is put clergy on an equal footing as employees of other non-profits, although churches still hold a favored position relative to other non-profits in that they are completely exempt from many of the reporting requirements of the tax code.

    • Sven2547

      Clergy housing allowances were a special benefit that wasn’t open to employees of other non-profits. All that this ruling does is put clergy on an equal footing as employees of other non-profits

      This. This right here.

      This is a case of religious Americans (overwhelmingly Christians) having a special privilege. The special privilege is taken away, and apologists spin it as an attack on religion.


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