There is nothing in the Constitution that says churches are exempt from taxes. Nor is there anything that says contributions to churches should be deductible from an individual’s income taxes. There weren’t any income taxes when the Constitution was written in 1791. The first income tax was enacted 71 years later in 1862, and then it was repealed ten years later in 1872, then revived in 1894, only to be declared unconstitutional by the US Supreme Court in 1895. Finally, in 1913, the 16th amendment to the Constitution was ratified, making income tax a permanent part of our tax system.
(NOTE: There is a lesson here about how to fix the Citizens United SCOTUS decision that has enabled corporations and the wealthy to dominate the information that citizens have access to, and thereby control our political process.)
The history of churches and their priests being exempt from taxes goes back at least to ancient Egypt. In the past two thousand years the Catholic Church has amassed huge wealth and power by avoiding taxes…and is still doing it. But in medieval times, the Church did not always prevail. When it was strong, it was able to retain those privileges, but when and where it was not, those privileges were often eliminated.[i] Of course, all other churches in this country share that privilege, despite the Establishment Clause in the Constitution. The usual argument given is that the Free Exercise Clause overrides the Establishment Clause. Allowing government to tax churches, they say, could limit their rights of “free exercise.”
I will not bore you with the endless arguments over conflicting interpretations of the Constitution, and the court decisions that have taken place through the years on this subject. Let’s just look at it from a commonsense point of view. First, I will state some general principles that seem obvious to me.
- Organized modern societies need government. If you do not agree with this, stop reading now and go watch Fox or kiddie cartoons. You are not capable of learning or contributing anything useful here.[ii]
- Government requires money to operate. That money has to come from the people…individuals and/or the businesses they operate.
- All citizens and businesses benefit from government services, the most obvious being national defense, but there are many others.
- Determining how to assess taxes is an unending problem. I will avoid that political swamp here. But as our revolutionary forefathers declared, “taxation without representation” is unfair. It is equally unfair to grant “representation without taxation.” The Free Exercise Clause does not mean a free ride.
- We enjoy many privileges as citizens of the US. With those privileges must necessarily come responsibilities. A primary one is to provide the necessary funding to operate the government. Why shouldn’t every citizen and every business contribute to that?[iii]
- And finally, let’s come to the issue of churches. Is a church a business? It certainly shares many of the characteristics of a business. It has a physical facility, a staff of employees, and an operating budget determined by income and expenses. It has “customers” who find value in its services. It benefits from government services just as all businesses do. Why should it be granted the special privilege of enjoying those benefits at no cost?
Okay, that outlines the basic issue. Now let’s get down to the nitty-gritty. Churches get their tax-exempt status because the majority of our citizens are religious believers. As I said earlier, the Constitution does not grant this specific privilege to churches, so the interpretation that churches are entitled to it is, to say the least, arguable. The Christian majority grants these privileges because they are the majority and they can. Would a secular majority grant such privileges? I don’t see why they would or should. The benefits that church members derive from their churches are not shared by nonbelievers. But those tax exemptions reduce government tax revenue, and the costs of the services those churches enjoy are borne by everyone else. Taxes should be fairly assessed, and that’s not fair.
Defenders of the tax exemption claim that churches do charitable work, so they should get the same tax exemption as a secular charity. But secular charities are subject to audit and must pass strict IRS rules to qualify for their tax-free status. Churches are virtually exempt from audit, and a very small percentage of their income is typically spent on secular charity work. If their charitable operations were completely separate from religious functions, it would be more reasonable for that part to be treated like any other secular charity. But why should the rest of their “religious business” be tax exempt? Like any private club, its benefits accrue only to its members. Others should not be required to support that.
The final issue I will address is the tax deduction for contributions to churches. Once again, it is defended by invoking the Free Exercise Clause and the claim that churches do charitable work. The same argument applies here. If the contributions for secular charity operations were segregated, it would be reasonable to treat them like contributions to any secular charity. But the rest that goes to pay salaries of pastors or priests, maintain buildings, running summer Bible camps or foreign missions, plus all the other church activities, benefit nobody but church members. Why should that be treated any differently than a golf club or gym membership fee? Does taxing a golf club limit its “free exercise” as a business?
Religious belief, like political affiliation, is simply personal opinion. Why should an individual’s opinion on ANY subject entitle that person to special favors or privileges? Doesn’t the Equal Protection Clause of the Constitution prohibit such favoritism?
Free exercise does not mean special privilege.
[ii] To keep things from getting bogged down, I will confine this discussion to income taxes and property taxes, but the same principles apply for all other taxes at all levels of government.
[iii] Now this makes the assumption that every citizen has disposable income (i.e., income in excess of basic needs to survive) and can contribute. Some cannot, and in fact will need to be supported at least temporarily. Businesses that do not have income won’t be around for long.