Tuesday, July 12, 2011

Taxing churches

As we're tightening our government-budget belts, it might be a good time to consider the money that would flow into municipal, state and federal coffers by removing the various tax exemptions from churches and similar organizations.

These businesses pay no taxes on income or property, providing they do not engage themselves in political activity. Obviously, many DO engage in political activity. One church's whole reason for being seems to be to protest against the national agenda by picketing the funerals of fallen American service men and women. Another large church has for many years opposed political candidates based upon their views on the legality of abortion. That same venerable institution recently took a stand against the New York State Legislature's approval of same-sex marriage. So, the idea that churches have only other-worldly concerns is entirely a myth. On this grounds alone, the tax exemptions should be canceled, but no one in the government appears to be taking notice.

But there is a more basic issue. The establishment clause of the First Amendment is supposed to guarantee that no individual, group or business is given an advantage because of his, her or its religious beliefs. By granting a tax exemption to religious institutions, the government is effectively compelling ALL the rest of us to subsidize the religious institutions through our taxes. Our taxes pay to build and maintain the roads and sidewalks that lead to the churches. Our taxes pay for the police protection and fire protection enjoyed by the churches. In every way, the religious nature of the institutions provides them with a financial advantage that the rest of us do not enjoy. We are forced not only to pay for government services for ourselves but for others' churches as well.

Of course, there is much there for legal scholars to argue about. I'm more concerned with government budgets right now. So, how much money could we hope to gain for government by taxing churches?

The short answer seems to be: no one knows. Since any church income or property is not taxed, there seems to be very little interest in keeping track of just how much of it there is. Some sources note that 40 years ago the value of all church property in the U.S. was around $110 Billion. That figure sounds low. It is certainly a lot lower than the value of church property in the U.S. today. Sources place the annual church income of about 25 years ago in the neighborhood of $100 Billion. The current figure is probably much higher.

Potential property tax income is easy to calculate. Just run a reasonable property value figure through whatever mill rate is handy to get an approximation. Other taxes could be influenced by the way the churches kept their books. But, clearly, we're talking about a decent amount of money - enough to eliminate the need to cut important programs and employees and various levels of government.

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