Should Churches Surrender Tax-Exempt Status?

Mike Huckabee says so:

In a surprising move, Christian conservative and Republican leader Mike Huckabee is encouraging churches to give up their tax exempt status. Huckabee issued the following call for churches to unilaterally give up their tax-exempt status via Twitter on June 11.

“It’s time for churches to reject tax exempt status completely; freedom is more important than government financial favors,” tweeted Huckabee.

Huckabee first suggested that Christians “give up tax-exempt status and tax deductions for charitable contributions” on June 10, while speaking at the pastors’ conference prior to the annual Southern Baptist Convention meeting in Houston.

There Huckabee said: “I think we need to recognize that it may be time to quit worrying so much about the tax code and start thinking more about the truth of the living God, and if it means that we give up tax-exempt status and tax deductions for charitable contributions, I choose freedom more than I choose a deduction that the government gives me permission to say what God wants me to say.”

While Huckabee worries that tax breaks from the government places restrictions on political speech, many secular Americans will welcome Huckabee’s suggestion for the simple reason that the disparity of treatment between religious and secular non-profit organizations has always had the appearance of being unconstitutional. For many, the fact that the government currently gives preference to religious groups over non-religious groups and that tax codes treat churches differently from other non-profit groups, is simply unconstitutional.

About Scot McKnight

Scot McKnight is a recognized authority on the New Testament, early Christianity, and the historical Jesus. McKnight, author of more than forty books, is the Professor of New Testament at Northern Seminary in Lombard, IL.

  • Adam

    I think Huckabee isn’t actually talking about freedom but freedom to exclude. This is about abortion and health insurance whether he’s saying it or not.

  • James G.

    I doubt it on the former. There’s nothing the tax code concerning churches that affects their stance pro/con re: abortion. You can’t endorse candidates (a good thing to this minister’s pov), but moral stances are not part of the deal.

    As to the latter (insurance), churches are exempt under the mandate, whether they are incorporated 501(c)3 orgs or not.

    I’ve worked with churches that filed for the federal exemption, and those that didn’t. Personally, I prefered not. Less red tape, the benefits are overblown, especially for small churches and new plants. But I’m also in a non-demominational setting, without the burden of church bureaucracies and heavy administrative messes…those groups tend to love the 501(c)3 codes.

  • matt

    How does giving it up promote freedom? And the problem is he’s referring to a political theory of freedom instead of Freedom in Christ?

  • James G.

    My guess is he wants the ability of a church to endorse/speak against particular candidates. I would find that a horrendous mess for a church to entangle itself. And you’re correct. That has zip to do with freedom in Christ. You don’t find anti-Caesar screeds in Romans, for example. Quite the opposite in ch. 13, in fact.

  • Adam

    I’ll be clearer. Abortion and Insurance are not separate issues so we can’t say former and latter. It’s one issue. Obama’s new healthcare system requires employers to offer equal insurance to everyone. Conservatives want to restrict insurance coverage for abortion related items, like birth control. If a church wants to be under the 501 system they have to match the public systems but if they go privatized and no longer 501 they have more control over the insurance issue.

    A similar situation probably exists with homosexuality and employment.

  • matt

    thanks, I was starting to get lost in the maze of my own questions. Unfortunately I’m guessing most pastors at the southern baptist convention might agree, while their anabaptist roots would freak out at a potential lack of separation as church and state.

  • rob

    Wait…churches are exempt from Obamacare?

  • Jeremy B.

    While I agree that churches should be ready to surrender their tax exempt status when it conflicts with matters of conscience, I’m thinking this is a political maneuver so that would allow him and others to leverage the pulpit as a campaign tool.

  • http://thejoethomas.tumblr.com/ Joseph Thomas

    I agree that Huckabee’s motives probably aren’t pure, but you have to admit that by signing up as a tax-exempt entity churches are putting themselves in a position of reliance upon the whims of the state. Christians demand that the government stay completely out of churches, but then they voluntarily place themselves in a subordinate position with the government for financial purposes.

    And, remember what Paul said when he found out people were preaching the gospel with impure motives: Let them preach.

  • http://www.naturalspirituality.wordpress.com/ Howard Pepper

    I’m a very progressive (basically Process) Christian now, former Evangelical, and I don’t share Huckabee’s political views at all. But I could live with such a move. However, I do think disturbing the status quo on it would likely have unintended consequences, some of which no one would like. I personally favor churches/pastors being relatively restricted as to politics (as now). If not for practical (e.g., money!) reasons, I think we’d see even more extremism and polarization that would be worse than the current sorry state. A lot more churches, as well as denominations, would probably split, for one thing. Though I think we’d eventually adjust (thus “I could live with it”), it’s high risk and disruptive.

  • Sue

    Wow, I wonder how many churches in prime business district/downtown areas this would immediately put out of business.

  • AHH

    tax codes treat churches differently from other non-profit groups
    How so? A contribution I make to a church and a contribution to, for example, the Red Cross are equally tax deductible. And either organization could lose that if they became engaged in partisan politics. And neither organization has to pay taxes on their revenues.
    So what unequal tax treatment are they talking about? What have I missed?

  • Keaton Brownstead

    Creflo Dollar is laughing at this admonition from his private jet.

  • Steve Robinson

    I’ve always said “when the church and state get in bed together the kids are always ugly”. I’ve also been a supporter of churches giving up tax exempt status for decades, not because I want to hear politics from my pulpit but to free the churches from any governmental monetary constraints to bow to political agendas from ANY direction. Give Caesar his coin and live free.

  • JoeyS

    Any nonprofit that employs less than 50 people is exempt from the ACA.

  • metanoia

    “Render unto Caesar the things that are Caesar’s . . .” Church members are already taxed on a myriad of goods, services and wages. They give to the church to fund kingdom work. The Church should not be forced by government to give kingdom resources to the the government. Although we may question how a specific church uses its resources, it is a dangerous thing for Christians to allow government to meddle into issues of conscience.

  • James G.

    My mistake. I was thinking of abortion in the larger picture, not in the singular context of Obamacare regulation. As JoeyS pointed out, the vast, vast majority of churches (at the congregational level) are unaffected by the insurance/abortion dilemma. The Catholic church and others who are registered as 501(c)3s at the denominational level will, of course, have to wrestle with this. There should have been a religious exemption on the abortion issue from the beginning, imho.

    As far as the homosexuality/employment issue, right now churches are still allowed to let their religious convictions play a role in hiring/firing. How long, though? I don’t know. I do know that at the Saddleback form in ’08 the question of whether or not religious entities that *receive federal funding/grants* should be legally required to hire people who do not share their beliefs/convictions/faith if that is the only objection, and Sen. McCain’s answer was that no, the state should allow them to hire according to their beliefs. Then Sen. Obama’s answer was that once you receive federal funds, the religious part of the equation must be mute. His concern, to be fair, was that people would use the exemption to discriminate. But the catch 22 is that you also discriminate against the beliefs of the religious group by silencing their convictions. That’s what you get with federal funds, though, and people should know that going in. There are strings. Some could come with conflicts of conviction.

  • Kullervo

    Churches are tax-exempt without having to file charitable organization tax returns (from 990 or 990pf), and donations to churches are tax deductible as charitable contributions without the church having to register with the IRS.

  • Kullervo

    Losing federal tax exempt status would not necessarily subject a church to state taxes (such as property tax).

  • Kullervo

    Churches don’t “sign up” as tax-exempt entities. They’re automatically tax exempt without having to register or file anything.

  • http://thejoethomas.tumblr.com/ Joseph Thomas

    They have to apply initially for 501(c)(3) status. After that, I don’t know all the ins and outs, but I know they have to apply and be approved at the start to be considered tax exempt.

  • Kullervo

    Nope. They can voluntarily register (to show transparency and good faith), and many do, but they are absolutely not required to.

    http://www.irs.gov/pub/irs-pdf/p1828.pdf

  • http://descriptivegrace.wordpress.com/ James Jordan

    The original reason for giving churches tax exempt status was that the government tends to favor those people/organizations that pay the most taxes (the ones that make the government more wealthy) more than it does those who pay none. Hence, to prevent any church from ever becoming an established state church, they were given tax exempt status. Once the tax exempt status is gone, what’s to prevent the government from making the one that brings in the most tax money into the official church? The constitution? They already wiped their butts with that and flushed it!

  • Stephen Sharkey

    I understand his sentiment, but if freedom is what he’s after then he should be pushing for BOTH freedom of speech AND tax exemption, since taxation is ultimately a form of tyranny.


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