Court Says Priests Must Pay Income Tax on the Rectory

My priest makes a salary.

It qualifies him for food stamps, medicaid and government housing.

Thanks to a lawsuit brought by our friends at the Freedom From Religion Foundation and a legislating-from-the-bench judge, the courts are now going to have to decide if priests and other clergy should pay income taxes on the privilege of living in the Church rectory. Judge Barbara Crabb issued a ruling that would require clergy of every type and denomination to have their stay in church rectories taxed as income.

That means my priest would have to pay income taxes on the rectory.

Of course, since Father’s grandiose salary qualifies him for free government housing, we could always just move him in there. It’s not too cushy, but there is an exciting mix of truly needy people, drug dealers, ex-offenders and pimps. He’ll have to learn how to sleep through the nightly gunfire and the screams and shouts from daily assaults, but he did a tour in Viet Nam before he entered the priesthood, so he’s trained for it.

Maybe Father can stop wasting his time saying mass and funerals, hearing confessions and administering our parish and turn his attention to the mission field of his new neighborhood. That will leave the parish somewhat forsaken. But it’s all about Freedom From Religion anyway, so what’s the beef?

My parish will now be free from our religion.

Nifty.

If this ruling is upheld in higher courts, I am wondering if the next move will be to make members of religious orders pay income tax for the privilege of living in their convents and monasteries. How about those military chaplains who live in base housing? This ruling doesn’t just apply to Catholics. It takes in protestant ministers, rabbis, imams, Native American shamans, and probably witches, as well.

The last time I checked, deciding who gets tax exemptions is the business of legislative bodies. Not only did this judge, who has ruled previously that the National Day of Prayer was unconstitutional, set off across the uncharted seas of lawmaking by judicial fiat, she is attempting to shift the taxing powers of the elected representatives of the people to the judiciary.

There is a reason that the framers of the Constitution placed taxing power and budget matters squarely in the hands of elected representatives. The reason is simple. The people can retire their elected representatives to private life at the next election.

But we’re stuck with judges. The trouble is that a lot of judges aren’t judges anymore. They seem to view themselves as appointed monarchs who can use their position to make anyone they don’t like, in the words of Henry VIII, “shorter by a head.” Or, as in this case, they can make them shorter by a rectory.

These judges have left the bench behind and taken on judicial dictatorship. They rule according to their personal prejudices in order to make law with a rap of the gavel. This has become so widespread that it is, in itself, something of a challenge to our democracy.

One of the problems is that judges stay on the bench too long. The purpose of giving judges a life-long sinecure was to create a judiciary that was free of political pressures. It was a balance of power. The elected representatives would appoint judges and the judges themselves would not have to stand for election, but would be able to rule without the pressure to heed passing public moods.

It worked quite well until the 20th Century when the Supreme Court woke up and realized, hey, we can do anything we want.

There has been a considerable (if you will pardon the phrase) trickle down from the Supreme Court to lower courts of this understanding that the judiciary is not required to follow the laws of anyone and can, in fact, make law according to its whim, prejudices and personal vendettas. If a judge gets a hate-on going for a particular part of the populace, like, say, religious people, then you’d better get back Loretta. Those nutty, individualistic and flat-out discriminatory rulings will start popping up like popcorn in the microwave.

We’re having trouble in this country with the second-rate people we’ve got at the top. Whether it’s elected officials (of both parties), the judiciary (appointees of both parties), or the people who are running our finance, media and corporate wings, they appear to be all about changing the face of this country into something that serves their greed, prejudices and various venalities.

How should we respond to these challenges?

Pope Francis is showing us the way. We should respond with love, faithfulness to the whole Gospel of Christ and by walking the Christian walk without being afraid of our critics or changing our message to suit them.

If Father has to move to government housing, we won’t despair. We’ll just say mass there and do what we should have been doing anyway, which is to work to convert the drug dealers and pimps to follow Him, along with us.

From Huff Post:

(RNS) A federal judge has ruled that an Internal Revenue Service exemption that allows clergy to shield a portion of their salary from federal income taxes is unconstitutional.

The clergy housing exemption applies to an estimated 44,000 ministers, priests, rabbis, imams and others. If the ruling stands, some clergy members could experience an estimated 5 to 10 percent cut in take-home pay.

The suit was filed by the Wisconsin-based Freedom from Religion Foundation on grounds that the housing allowance violates the separation of church and state and the constitutional guarantee of equal protection. The group’s founders have said that if tax-exempt religious groups are allowed a housing subsidy, other tax-exempt groups, such as FFRF, should get one, too.

U.S. District Court Judge Barbara Crabb on Friday (Nov. 22) ruled in their favor, saying the exemption “provides a benefit to religious persons and no one else, even though doing so is not necessary to alleviate a special burden on religious exercise.”

The case, decided in the District Court for the Western District Of Wisconsin, will likely be appealed to the Chicago-based 7th U.S. Circuit Court of Appeals, which covers the states of Wisconsin, Illinois and Indiana.

The housing allowances of pastors in Wisconsin remain unaffected after Crabb stayed the ruling until all appeals are exhausted. Crabb also ruled in 2010 that the National Day of Prayer was unconstitutional; that ruling was overturned the following year.

  • James

    The constitutionality of tax exemptions for religious organizations is well established. Walz v. Tax Commission of the City of New York, 397 U.S. 664 (1970). I don’t see how clergy allowances don’t fall under Walz, therefore, I’m pretty sure this will be reversed on appeal.

    Still, this exemption, intended to protect poor ministers from being taxed out of the parsonages has been abused by pastors of wealthy congregations using “housing allowances” to buy large houses and build swimming pools. Even so, a poorly thought out law is not an unconstitutional one.

    • pesq87

      James, in addition to his rectory apartment, the Bishop of Worcester gets a beautiful oceanfront estate in Narragansett Rhode Island with a swimming pool and a tennis court. And a parish priest I know in Brooklyn lives in the rectory but keeps a weekend home in East Hampton.

      • FW Ken

        Are these properties exempt from taxes?

        One of the benefits of the sex scandals is the divestment from excess money, including traditional episcopal palaces. In Boston, the mansion was sold and the cardinal lives in the cathedral rectory.

      • FW Ken

        I meant to note that it’s not unheard of for priests to own personal property from family money or to receive it as a gift. Some go in with priest-friends and but something. Income tax exemption are not, therefore, involved. Do they pay property taxes?

  • Chesire11

    Sadly, the response of some non-religious people who have been crowing about this “victory” to concerns about this ruling is to shrug and say that the churches and the congregations should pay our clergy better.

    • pesq87

      IMHO, Clergy and teachers should be paid higher wages, in my opinion, but the marketplace doesnt value them as much as we value doctors and CEOs.

      • hamiltonr

        That doesn’t address the issue of this judge making law from the bench, or what, based on the two opinions I cited her apparent anti-religious bias.

  • Fabio Paolo Barbieri

    Surely there must be provisions in American law against vexatious litigants? Surely a body such as the FFRF, which brings lawsuits in which it has no interest or locus standi and which try to reverse already judged and legislated matter, should be liable on what in England is called the law of champerty – people who encourage others to litigate? Or can anyone in America bring a worthless lawsuit without any loss?

    • SisterCynthia

      I think, but do not “KNOW” that frivolous lawsuits can result in your having to pay the court fees for the one you wrongly drug into court, if the judge deems the suit to be so utterly ridiculous as to merit that punishment, but since Americans seem to LOVE suing each other, I suspect that it rarely occurs, or there would be less nonsense. Others on here likely know the law better than I do.

      • pesq87

        SisterCynthia, I’ve been through this in the USA and its a very broken system. It (A) can cost you thousands of dollars to sue someone for bringing a frivolous lawsuit against you, and (B) is very likely you will lose b/c the bar is set very high for what the courts can say with certainty is “frivolous.” Not to mention the time and emotion involved. Sadly, the system works best when you – as a defendant – just cut your losses and just walk away.

    • Donalbain

      Except that in this case, they won the case, so it was not a worthless lawsuit, was it?

      • Fabio Paolo Barbieri

        If America’s legal system had seen fit – as, according to pesq87, it has not – to put proper limits on vexatious litigation, champerty and the attempt to re-litigate what had already been litigated, organizations such as FFRF (or Faffers, as they should be called) would not even try this sort of lawsuit. In a country where the law is respected, judges are servants of the law, not its writers. In my country, in the nineteenth century, the tyrannical and corrupt king of Naples tried to “suggest” to a judge what he wanted done with certain subversives who had advocated such appalling notions as a written constitution and an elected Parliament. The judge answered: “Your majesty, a jurisconsult takes orders only from the law.” And the king, corrupt tyrant as he was, was so overawed that he did nothing worse to this disrespectful lawyer than to dismiss him from his post. Unfortunately, both political and legal authorities in America have less respect for the law than had that murderous old tyrant, let alone his couragous judge.

  • http://groups.yahoo.com/group/Maury_and_Baty/ RLBaty

    Rebecca,

    I just realized who you are.

    As a bit of trivia, it might be said that the FFRF v IRS – IRC 107 case began in Oklahoma 30 years ago when Oklahoma Congressmen and Senators refused to take seriously the problems with IRC 107 and how it was administered.

    The infamous “basketball minister” case that I often refer to involved a basketball coach at a private school out on Memorial Road in Oklahoma City.

    George H.W. Bush and Omar Burleson had, during the Nixon years, managed to put the squeeze on IRS executives and obtained an administrative rule that would allow, contrary to fact and law, that private school to be recognized as an “integral agency of the church” so that its employees could register as ministers and claim the IRC 107(2) income tax free benefit.

    The law was compromised.
    The church was compromised.
    The schools were compromised.
    Separation of Church/State principles were compromised.
    All for the want of “few pieces of silver”.

    I begged and begged and begged my elected officials to act.
    They would not.
    The FFRF would…though it has taken 30 years.

    • hamiltonr

      Interesting. I think that was before my time in office. I know Nixon, et al were. I’m afraid you have the advantage here, but I assume you are another Okie.

    • Fabio Paolo Barbieri

      I do not discuss your account of this corrupt bargain. The question however is whether this corrupt bargain is the cause of the lawsuit… or only its excuse. And I’m afraid that the fanatical and illiberal record of the Faffers would lead any person of sense to the latter conclusion; that, with the excuse of striking at some long-gone basketball reverend, the Faffers intend in reality to impoverish every ecclesiastic in the land who has the use of a residence. The abuse you describe can’t be very widespread, if you yourself have to go back to a case forty years ago to describe it. Would it have been worth anyone’s while to litigate it, let alone an organization whose animus against “religion” is stated in their very name?

      • http://groups.yahoo.com/group/Maury_and_Baty/ RLBaty

        In reply to Fabio:

        The exploitation of IRC 107 by “basketball ministers” and others has continued and grown over more than 40 years. You don’t have to look very far for today’s examples.

        “Cause” or “excuse” are rather subjective and may, in the opinion of some, be synonymous.

        Many “causes”/”excuses” might be found if one were to investigate the historical record.

        I could offer my account regarding the Bush/Burleson deal as one.

        Others could cite Rick Warren’s case as another.

        One might cite the Grassley Commission Report as another.

        As HIllary Clinton might say, “it takes a village”.

        I know a little about my side of the story which leads up to Judge Crabb’s recent ruling.

        Maybe we will hear more of the story as the case proceeds and if public interest is generated.

        Maybe not.

        • FW Ken

          So all ministers are in the same tank as those on the Grassley report. I live in north Texas and am well aware of the flim flam TV “ministries”.

          But last I heard, Rick Warren have away 90% of his salary, if he even takes a church salary. We have a mega-church pastor here who does that, so I may be confusing them.

          I am not sure who you mean by Bush-Burleson.

          • http://groups.yahoo.com/group/Maury_and_Baty/ RLBaty

            “Bush-Burleson” = George H.W. Bush and Omar Burleson.

            Have you ever seen the accounting details to support the claim that someone “gives away” 90% of their income.

            I think it’s a game some rich people play.

            In simple terms, I figure if you gave away 90% of your income you would not have enough left to pay your taxes because you can’t deduct 90% of your income for purposes of a contribution deduction.

            Such folks may be charitable, but the 90% claim, in my opinion, is misleading. I could easily live on $500,000 of my $5,000,000 income, but I could not pay my taxes.

            So, what is up with such claims?

            I don’t think they ever reveal the details and I suspect it is a bunch of financial smoke and mirrors.

  • kenofken

    I see no reason why clergy should get special income tax breaks. There are a lot of people doing important work who aren’t as well compensated as they could or should be.

    • hamiltonr

      Clergy pay income taxes the same as you Ken.

      • FW Ken

        Plus they pay the whole of the social security tax, instead of the half the rest of us pay (employers pay the other half).

        I followed this issue on a site with a fair number of protestant ministers and their tax situation is complicated. Apparently this is mainly going to be a problem for small congregations and Catholics.

        But really, what is the fair market value of a room and a bath in a rectory that’s mostly devoted to parish offices?

        • Fabio Paolo Barbieri

          I’m afraid it’s apt to be whatever the legal authority decides. And considering what the IRS has already done, it would not surprise me if Catholic priests were assessed for St.Peter’s.

      • kenofken

        I don’t get to have a sizable portion of my compensation designated as “housing allowance” and then have that shielded from tax, on top of the usual deductions for mortgage interest etc.

        • hamiltonr

          You know Ken, what you might do is lobby for tax breaks for yourself.

          • kenofken

            I could, and with a modest bit of legal maneuvering, I could even lay claim to the existing clergy exemption, as I am a priest within my own religion, though an unpaid one. I don’t see the underlying point as being “he’s getting some juice I’m not.” The point to me is that I see no good rationale for giving income tax breaks to one class of people based solely on their religious vocations.

            • hamiltonr

              Ken, this whole case is designed to leverage taxing religion. What will happen if it succeeds is that the government will then use it to control churches and to closely monitor their activities. You seem focused on housing. I am not being sarcastic. I honestly wonder if, because you are not paid and are part of a smaller faith, i.e., pagan, that you think none of this concerns you. In truth Ken, if the government can run over the Catholic Church, how do you think you and your faith fill survive?

              • kenofken

                I would argue that the dependence on government money, including tax breaks, is the very thing that leaves churches vulnerable to manipulation and meddling. Money or special dispensations from Caesar always come with strings attached. When you structure your economic survival around Caesar’s benevolence or checkbook, you dance where he tells you, sooner or later.

                Until Constantine and Theodosius, early Christians understood this very well. They rendered unto Caesar what was his, but didn’t ask for any favors that would give the empire an easy lever to compromise their beliefs. Bahais, another faith born in persecution, also grasped this idea from day one. They don’t take a dime of money from anyone outside their faith, and as a result, they answer to no one else.

                This phenomenon is of course not limited to government vis-a-vi religion. We use dependency on government money and favor to control dozens of smaller and poorer countries in ways large and small. When the federal government wants states to fall in line with some big policy like drinking age, they send word down “you WILL comply, or we’ll cut off your highway funds.” They do. Same thing with higher education. When Harvard and other schools wanted to ban military recruiters from campus over the old DADT policy or other gripes, the Solomon Amendment brought them right in line – no access to our recruiters, no federal money.

                The pagan community as a general matter are very strong advocates of separation of church and state. We know from hard experience that no one benefits in any real sense when government favors one religion over another or over no religion at all. We’re not too proud to take advantage of existing tax breaks as a matter of equality. We just won a long battle to make a community in upstate New York grant tax-exempt status to a group there. Many of us, myself included, prefer to keep our practice less formally structured and closer to the ground in part because we don’t want it beholden to money, including the government’s.

                • hamiltonr

                  Ken, I agree with you about government money. However, taxing power is also an intrusion that I don’t think you understand. You’re accustomed to being called to pay your taxes and then ignored. In this climate of politicians attacking churches, that is not what is going to happen with the taxing power as it concerns churches. Taxing power is also the power to audit and to destroy. Churches need to be left out of it, and there are reasons far more important than money why they should be. I doubt that I’m making myself clear. This is a topic that’s too big for a combox.

        • FW Ken

          I don’t either, but I am building equity in my house and have the mortgage deduction on my side. I also make a reasonable salary. Priests in my diocese were getting a stipend of $14,000 a few years back. And they live in, at most, a small apartment in a rectory. Under that scenario, it’s reasonable to treat housing like health insurance and not tax it.

          BTW, I’m not opposed to taxing the housing allowance in principle, but there are reasonable arguments against it. There are also exceptions in every situation. My own priest is married and lives in his own house.

    • vox borealis

      I see no reason why clergy should get special income tax breaks.

      In principal I don’t necessarily disagree with. I don’t necessarily agree, either. Of course, this is not the point of Rebecca’s post. It is the job of the legislative branch to decide on who gets what tax breaks. It’s not the job of individual judges to scuttle the legislative process and thus circumvent the Constitution. You don’t thin clergy should get a tax break? OK, lobby your congressmen and push for a legislative change.

      • kenofken

        There is nothing illegitimate about the judicial branch ruling on questions of the constitutionality of existing laws. You or I (or more importantly, a higher court), may find the decision and reasoning to be incorrect, but the exercise of that review power is not an abuse of power simply because you don’t like the outcome. Judicial review as a core function of courts is almost as old as the republic itself.

  • http://ashesfromburntroses.blogspot.com/ Manny

    That’s horrendous. I thought priests were exempt from income tax. No question, we are in an era of religious attack. Priests hardly make minimum wage.

    • hamiltonr

      I don’t think they do make minimum wage Manny. At least not here.

      • http://ashesfromburntroses.blogspot.com/ Manny

        No not officially they don’t. But when you count up all th hours they put in and divide into the $20k a year they get it probably doesn’t add up to much more than minimum wage. They don’t exactly put in 40 hour weeks. Actually I found this on priest’s salaries:
        http://www.ehow.com/info_12152185_much-catholic-priests-paid.html

        and this
        http://www.catholicdigest.com/articles/faith/knowledge/2007/10-01/how-much-money-does-a-parish-priest-make

        From an article I read a while back, Roman atholic priests are the least paid of all the clergy in the US; that included protestant pastors, rabbis, and imams.

        • hamiltonr

          Priests in this archdiocese don’t get $20,000/year. Not even close. I guess they get more in New York.

          • http://ashesfromburntroses.blogspot.com/ Manny

            I’m not sure how much they get, but for some reason $20k/yr is in my head. But I suspect it’s local cost of living adjusted.

  • pesq87

    The apartment upstairs from me is a church rectory. Its fair market value is about $3.2 million, so, it could probably rent for $10,000 per month (conservatively speaking). That’s a $120,000 a year value.

    • hamiltonr

      Which means you live in a million dollar house?

      • pesq87

        I live in a large apartment building. I’m talking about the rector’s apartment.

        • AnneG

          Ok, so what would the income tax translate to, considering that the minister may make only $40k per year? A priest in our diocese makes about $25k. That’s it. He is already eligible for Medicaid, food stamps and subsidized housing, not to mention the earned income tax credit. What, exactly, are you going to tax? And, people in public housing and prison should have to pay based on their accommodations, as well, by your reasoning.

          • hamiltonr

            Priests in my Archdiocese make far less than this, Anne. Interesting. I guess we’re poor Catholics down here in Okieland.

            • http://ashesfromburntroses.blogspot.com/ Manny

              Rebecca I seriously doubt a priest lives in a million dollar condo. I have never heard of a rectory being inside an apartment building. I guess it’s possible, but it sounds like BS.

              • pesq87

                Manny, it’s common in NYC. The fact that you’ve never heard of it doesnt make it BS. It makes you less informed than I am.

                • FW Ken

                  Is the priest building equity? Does he have the mortgage deduction? Does he have a choice about living there?

                  This is all about clergy, but what about apartment managers? Are they taxed on the apartment that comes with the job? Storage unit managers with on-site apartments? If not, why not? Why are we only talking about clergy. Numerous other jobs, as mentioned in the post and comments have housing included.

                  If this discussion means anything, it portends a growing rigidity in the tax code, as various groups go after their favorite targets. It seems the tax code simply can’t handle anything but a standard salary structure.

                  • Sus_1

                    Great point about building equity, Ken.

                  • http://groups.yahoo.com/group/Maury_and_Baty/ RLBaty

                    In response to KW Ken if Rebecca will allow it:

                    Apartment managers, storage unit managers, and a host of others enjoy tax free housing benefits under IRC 119 which only involves political and policy matters. IRC 119 also requires the employee to live in the housing as a condition of employment and for the convenience of the employer and on the business premises.

                    IRC 107 is ONLY for “ministers” and that involves a legitimate 1st Amendment, Establishment Clause, constitutional issue.

                    That’s why the discussion is about “clergy”.
                    It’s because it is about “clergy”.

                    • FW Ken

                      So it’s not philosophical, just a matter of tax law?

                      And has been noted several times, clergy don’t choose their housing. At least priests don’t. And their living on the church grounds is definitely for the convenience of the parish community, as we saw when off-premises priests couldn’t get to the parish for Mass this past weekend.

                    • http://groups.yahoo.com/group/Maury_and_Baty/ RLBaty

                      Response to FW Ken:

                      The way I see it, many “ministers” might qualify under the IRC 119 rule which is for all who meet the conditions which do not involve a religious test.

                      Historically, ministers didn’t want to be so restricted and so they got up a law just for them, and with an unlimited cash option (as long as the amount is spent on housing).

                      IRC 119 is a matter of politics and policy.

                      IRC 107 involves a constitutional question involving the 1st Amendment prohibition against Congress passing laws “respecting the establishment of religion”.

                      Testing time has begun.
                      First round goes to the FFRF.

                    • FW Ken

                      It would be.interesting to hear an argument about taxation and the free exercise clause…

                      Nevertheless, I agree that like situations should be handled alike. As I’ve said above, I don’t object in principle to clergy paying income tax on their housing allowance, if a reasonable accommodation can be reached given unique situations.

                  • Fabio Paolo Barbieri

                    No Catholic priest can “build equity” in a house, because even if in fact he spends his life in a single parish, he can at any time be sent anywhere where his bishop deems it necessary for him to be. It follows that accommodation MUST be a part of the parish property, not the private property of a priest. Besides, there is that pesky vow of poverty to get through. Catholic laymen don’t think much of priests who start on expensive hobbies (I knew one who had a fine collection of Russian icons) or show around in tailored clothes and Italian shoes, because, whatever else they may know or not know about their Faith, they know that their priest has taken vows of chastity, poverty and obedience.

                    • FW Ken

                      Diocesan priests don’t take a vow of poverty. Order priests do and are exempt from income tax for that reason. Theoretically, a priest can build equity because the house in one place can be rented out if he had to move. My understanding, however, is that most real property owned by priests came through inheritance or family money.

                    • Fabio Paolo Barbieri

                      Whether or not that is legally the case, a priest who cared for anything beyond the parish benefice or the Church’s charitable and non-profit activities would look bad in the eyes of the laity. A “businessman priest” or a “rich priest” is, in Catholic eyes, not better than a priest with a girlfriend, if indeed they are not the same person.

                    • FW Ken

                      I tend to agree with you, but here’s an interesting alternative viewpoint.

                      http://www.patheos.com/blogs/standingonmyhead/2013/12/greed-and-grape-nuts.html

                    • Fabio Paolo Barbieri

                      First, this charming fellow – and I do mean charming fellow; I’d have loved to have a glass of his port with him – was an Anglican priest and not a Catholic. The assumptions are totally different, beginning with the fact that the Anglican priesthood tended to be a refuge for the cadet sons of the aristocracy, who had to be provided for somehow in a country where entail meant that most of the family patrimony would always go to the heir of entail. “Hampy”, unlike many of this class, had clearly inherited wealth – there must have been money in his family that was not entailed to go to his elder brother – and saw no reason, Gospel requirement or not, to go, sell everything he had and give it to the poor. But you have to realize that the relationship of his flock was not that of a Catholic flock to their priest. It was, for one thing, a much more self-enclosed world than that of any Catholic parish, even a rural one. An English village, until the first half of the twentieth century, used to be a clearly defined entity with the Squire – the local landowner – on top in a million formal and informal ways. The Vicar could be the Squire’s younger brother, and was at any rate apt to be the younger brother of some other Squire somewhere else, and that would be well known to the villagers. Once he was placed in his parish – significantly called his “living” – he was, unless he was one of those people marked from their years at Oxford or Cambridge for preferment, likely to stay there for life; marry there – if he had not got there already married – and bring up his children there. And here is an immediate difference visible with the Catholic parish priest, who can be removed at a moment’s notice by his Bishop for any number of reasons. But this chance of removal is only one of a number of ways in which the Catholic parish priest is much more bound to the outside world, much more involved in a lot of group activities, than the traditional Anglican vicar. For one thing, church societies tend to be ran by laypersons in the Anglican Church, but by priests in the Catholic Church – at the very least, priests and bishops are expected to take an informed and authoritative interest in them. The Anglican vicar will be politely interested in what the local Women’s Institute is doing, and do his best to help when they need his help; a Catholic priest is apt to be up to his elbows in the local Catholic Action or Knights of Columbus, day after day. All of this boils down to one thing: that the Anglican priest, once dropped and left in his “living”, is pretty much a fixture, little affected by external events. Even his bond with his bishop is less strong than that of a Catholic priest; and while his role is generally secondary to that of the Squire, a priest of strong character and independent means, such as the famous Sabine Baring Gould, may well become a kind of Squire himself. That was what Hamby was, exerting his benevolent near-lordship, and there is little space for such things in Catholic parishes.

          • pesq87

            AnneG, I haven’t advocated anything with respect to taxing priests. I’m merely sharing a relevant fact. I will say I like your idea of taxing prison inmates!

        • http://ashesfromburntroses.blogspot.com/ Manny

          What exactly is your point? The church doesn’t rent it out and so there is no income from it, no matter what the fair market value might be.

          • pesq87

            Sorry, Manny, I guess my point is: if my arrangement with my employer (an investment bank) paid me $1 million cash per year plus housing in a company apartment that they COULD rent out of $120k per year, should I pay taxes in $1 million or $1,120,000? I’m quite sure the position of the IRS is that I’ve received the latter value and owe taxes on it.

            • http://ashesfromburntroses.blogspot.com/ Manny

              You’re not a member of the clergy. Religious have had a special arrangement historically concerning taxes.

              • hamiltonr

                I believe that was one of the promises originally made to the American people when the 16th Amendment was passed. They were assured that churches would be exempt.

                • pesq87

                  Rebecca: Churches exempt? Or priests? Not the same thing.

                  • hamiltonr

                    Priests pay taxes.

                    • pesq87

                      Not on all their income, though.

              • pesq87

                I know that, Manny. That’s why we’re all discussing it here. Another way of looking at this is asking, why do we tax the income of priests at all? If we can pay a priest with tax-exempt housing, why don’t we go further and pay him with tax exempt income also? Why is only his housing tax exempt?

    • James

      Interesting. I think of a pastor in a $3.2 million dollar home, I think of megachurch pastors living in mega mansions. Cost of living makes a huge difference.

      A necessary exemption for urban pastors becomes abused in the suburbs.

      • pesq87

        James, why shouldnt a pastor live in a mansion if that’s what his parishioners want for him?

  • Sus_1

    This is so petty. Honestly, how much money is the US Treasury going to get by taxing priests’ and other ministers’ housing? It isn’t going to be enough to fund much of anything. The only people getting money will be the lawyers going to court to fight it.

    I’m going to assume the ruling will be appealed successfully,

    If this country decides that rich corporations should pay their taxes fairly, I might be willing to consider a different tax system for religious organizations. I doubt it though. I’m comfortable with the exemptions.

    • kenofken

      The figure I’m seeing quoted and attributed to the Joint Committee on Taxation’s Estimate of Federal Tax Expenditure says the housing exemption is worth $700 million a year.

  • Ray Glennon

    Rep.Hamilton,

    Thank you for bringing this ruling to our attention. I completely agree with your point that establishing tax policy is the business of legislative bodies. In this case the judge way overstepped her bounds as I hope the discussion below will indicate.

    In the for what it’s worth category — As you are well aware, and other readers may not be, the rectory is owned by the Church–which in the Archdiocese of Baltimore where I live is owned by the Archbishop as a corporation sole. The Bishop assigns the pastor and associate priests to the parish and they are allowed (and required) to live in the rectory that is provided. They do not receive a housing subsidy–they live in the housing provided by the Church as a condition of their service (not employment, service to the mission of the church, a non-profit for tax purposes) in that particular local parish.

    And the Church is certainly not the only non-profit service organization that provides “housing” or a non-taxable “housing allowance” to those that are serving the mission of the organization. We attend a Deer Valley YMCA Family Camp in Pennsylvania each summer. The camp director and assistant director and their families live in houses that are owned and maintained by the Deer Valley YMCA Family Camp. And now about all the college and university presidents that live in houses (often old and historic houses) on the campus owned and maintained by the university. Finally, consider this small organization–the United States military services. U.S. service members (clearly serving the national security mission of the the U.S.and not mere employees) are either provided with government housing (which they may be required to live in due their service — e.g., for an unmarried soldier or sailor in an Army barracks or on board ship) or they receive a cash housing allowance that is excluded from gross income calculations for income tax purposes. For married service members the situation is the same–they are either assigned to government family housing or they receive a cash housing allowance that is not subject to income tax.

    So what is underlying reason for this case? Here is how I see it. From a legal perspective, non-profit organizations exist as a result of the tax code. The legislators that created the tax code recognized that the “common good” would be advanced by the service of the non-profits and that more resources would be available to their mission if they were exempt from income taxes. They were not “just another business” in our economic system. In that narrow sense tax code sense, non-profits are “created” by the government. Under any reasonable reading of the tax code churches are non-profits that serve the public interest. However, and this is crucial, churches existed well before the tax code and have a mission that will continue regardless of the tax code.

    The Freedom from Religion Foundation (an oxymoron if there ever was one since it seeks to deny my freedom to choose and practice the “truth that sets you free”) makes this outrageous and demonstrably false claim on its website — “The history of Western civilization shows us that most social and moral progress has been brought about by persons free from religion.” So their objective is clear — to create a society of people that are free from religion — or, said another way, they want to “convert” religious people and to make them “irreligious” people. And in this specific instance they are using the power of the courts to to try to categorize churches as “just another non-profit” or, as noted above, just another creation of the state. Hopefully this is absurd on the face of it and it will be thrown out on appeal — but the threat is real, pervasive, and continuing.

    Thanks for your service and thoughts and providing others with the chance to comment.

    Twitter” @RayGlennon

    • http://groups.yahoo.com/group/Maury_and_Baty/ RLBaty

      In response to Ray Glennon:

      For some strange reason, my messages, apart from one, are not being allowed to post here.

      Interesting!

      “So what is the underlying reason for this case?
      Here is how I see it from a legal perspective…”

      George
      H.W. Bush and Omar Burleson managed to get the IRS to issue an
      administrative ruling allowing all manner of employees at certain
      private schools to register as ministers and claim the housing
      exclusion.

      That ruling effectively declared such private
      enterprises as “integral agencies of the church” which was the necessary
      recognition that allows the employees to register as ministers and
      claim the benefit.

      I am a theist.
      I didn’t like it.
      The IRS refused to properly deal with it.
      My elected officials refused to properly deal with it.
      I finally realized the law, and not the ruling, was the real problem.
      The 9th Circuit was going to take it up.
      Rick Warren worked his political magic and stopped it.
      Chemerinksy decided not to pursue it.
      I asked Annie Gaylor to take up where Chemerinksy left off.
      She did.
      Judge Crabb has properly done her job.
      Maybe Judge Crabb’s decision will hold up.
      Maybe not.
      We will see.

      Judge Crabb’s ruling does not have to do with church owned housing used by priests, ministers, imams, rabbis, etc.

      Judge Crabb’s ruling has to do with amounts of cash designated as housing.

      • hamiltonr

        RL, you’re new here, so I’m allowing this comment as a point of information. I almost always delete things like this. I also usually delete posts that are directed personally at or to me. The only post of your that I’ve deleted is one in which you linked to another web site. The reason was the link. I allow a lot of links here, but they have to serve the purpose of the discussion, not divert it. I do make exceptions (a lot of them) for people who are regular contributors to the discussion on this blog. I’ve learned to respect these people and trust them.

      • Ray Glennon

        As I read Rep. Hamilton’s original post, she correctly noted that establishing tax policy is properly the province of the legislature, not the courts.

        I recognize that there can be non-profit organizations–and not just church organizations–that violate the provisions of the existing tax code (in which case they should be prosecuted) or take a broad interpretation of provisions to support “legal” but unjustified deductions under the tax code (in which case the legislature should modify the tax code).

        And I’m quite convinced that a parish priest living in a parish rectory is both legal and justified–in the same manner that the housing allowance for U.S. military service people or the Deer Valley YMCA Family Camp director mentioned earlier are both legal and justified.

  • Joyce Joe

    Most of us here in OK do NOT want the kind of church that exists in “controlled” states, like China, or once did in the USSR–where the government is the GOD and the church is a token sentimental observance. However, there are many in our world, closer than we’d like to acknowledge, that DO want to do away with our religions, because Religion is TRUTH, without which you have no FREEDOM. I’ve often wondered how people in modern times adhered to the Church of England, knowing Henry the 8th FORCED it upon his subjects. Of course most religions have the human element mixed with the divine, so we have flaws. But the point of any faith is to help one be a better person, help others to be better people, and to help those who can’t help themselves, as well as get to our ultimate place of goodness–Heaven for Christians. The tax break is because they are NON-PROFIT, meaning they spend the money they bring in to do good. If all the religious sponsored hospitals just quit, the government would have some catching up to do. If all the missions (both domestic and foreign) stopped what they do, the government would have catching up to do. If they shut down shelters, food pantries, kitchens, etc., the government would have to pick up the slack. And who would pay for the “catching up” and all the “free stuff” like healthcare, transportation, food, homes, etc??? We would work for nothing, and profit nothing… Bastiat had it correct, though, that when we do it voluntarily, it is called charity (and we shouldn’t pay taxes on it) but when it is forced charity–taxation–we have to support more than what we like to support. In a perfect world, we would generously help all and there would be no government social agencies necessary. As long as the government forces us, we resent giving! Greed is the root, of course. But then, if we didn’t buy STUFF, who would have those jobs to support themselves? We’d all have to go back to our alloted plots and support self and state (yeah, that worked well for USSR). Back to subject–I don’t want the government telling me how to live my life, especially my faith and practices. I don’t like frivolous lawsuits that are pushing us into a corner. The most frightening of all is those who point fingers at us calling us HATERS, are doing it most. People like Michael Moore who says corporations are greedy when he is filthy rich. So many rich actors and movie stars complain about inequality in the world, but are they giving everything away?? I see nothing wrong with making a profit, even a huge profit, because along the way you are employing others, and helping them spend money, etc. It does trickle down. Even if they put most of it in a bank, the bank can loan it out and everyone profits. The idea that we all need to be as poor as we can is not sustainable! Nothing wrong with simple living, and living within our means either! The government should try that…
    Back to greed, why tax the priests and rabbis? They are helping the world be a better place in a special job–and I will always value that. No matter what your religion, as long as you are peaceful and doing good, you should be a non-profit and reap the benefits. Again, greed from a few is what spoils the benefits for all.

    • pesq87

      Joyce, you mention to many points for a comprehensive reply, but may I play the Devil’s Advocate to get a clear understanding of a few of your thoughts? First, you say, “The tax break is because they are NON-PROFIT, meaning they spend the money they bring in to do good,” But that would mean – to follow your logic – that every non-profit, (every museum, every foundation, every multi-million dollar charitable trust) should be able to compensate its employees with a combination of (A) cash and (B) housing, but only the cash would be taxable income. Our civil services would greatly suffer at the loss of millions in tax dollars.

      Similarly, you say, “why tax the priests and rabbis? They are helping the world be a better place in a special job,” but can that be a reasonable prerequisite? Even at the toll-booth is helping the world be a batter place. he’s moving the wheels of commerce. Without him, the workers wont get to their jobs. Even the factory worker is helping the world be a better place by using his earnings to raise God-fearing, kind Christian souls who will go on to medical school and save lives.

      In short, can the government really assign more “value” to what Person A does as his vocation than what Person B does?

      • hamiltonr

        The government does that all the pesq87. If you are interested in saving government money, you need to look at three things: corporate welfare, unnecessary defense expenditures, including building a huge factory as part of the surveillance of the American people in Utah, and government agency programs that have become self-perpetuating fiefdoms.

        • pesq87

          I agree with you Rebecca.

          • hamiltonr

            You and I, together at last? Be still my heart. :-)

  • FW Ken

    “The history of Western civilization shows us that most social and moral progress has been brought about by persons free from religion.”

    What rot. Stalin was certainly “free from religion”, as was Mao, Pol Pot, and the psychopaths who’ve run North Korea from decades.

    The contributions of Christians and other theists to science, culture, the arts, and philosophy are easily verified, although not by those who choose to see the bad.

    At any rate, I’m posting this because I read an interesting article about the real history of science in the middle ages. Even the comments are interesting.

    http://www.strangenotions.com/gods-philosophers/

  • http://outsidetheautisticasylum.blogspot.com/ Theodore Seeber

    Does it work to give Father a $5/month raise and then charge him a $5/month rent?


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