Tax exemption and corruption

MoreCoffee said:

In a number of western nations religions have tax exempt status for all sorts of taxes that other organisations and individuals have top pay. These laws lead to all sorts of opportunities for corrupt dealing. Is it biblical and moral to accept tax exempt status and should governments offer it to religions?

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Honestly, I think if governments took their hands out of our pockets there would be less need for tax exempt status.

I often wonder how many small nonprofits actually benefit a whole lot from being tax-exempt. In the US the people who take itemized deductions stand to benefit from being able to deduct their contributions from their taxable income but if you're talking a small nonprofit in an area where people are mostly likely to take standard deductions it probably makes little difference to donations, and smaller nonprofits are unlikely to have much income to speak of that derives from anything other than donations.

I really think that if government spent more time leaving people alone and less time regulating everything an awful lot of issues like this would get swept up in the process.

MoreCoffee said:

In a number of western nations religions have tax exempt status for all sorts of taxes that other organisations and individuals have top pay. These laws lead to all sorts of opportunities for corrupt dealing. Is it biblical and moral to accept tax exempt status and should governments offer it to religions?

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Any organization that accepts government money for its activities is likely to trend in that way, so although I have no easy answer to the question, I do not see much difference between churches being given a tax break and Planned Parenthood or Boeing being subsidized by the government.

God sets up governments and tears them down. We are to give to Ceasar what is Ceasar's and to God what is God's. If a government exempts churches from taxes then accept it. If a government does not exempt churches from taxes then accept it.
In the US the issue relates to non-profit organizations, of which churches fall into that category. Some non-profits you just scratch your head and understand they are exploiting the system. For example, the multi-billion dollar National Football League (NFL) is a non-profit organization that does not pay taxes. Is it right that such an organization has used a legal loophole? It's legal, but it seems unjust.

In The People's Republic of California, all not-for-profit corporations are tax exempt.

MoreCoffee said:

It is not the existence of taxation that is wicked nor is it the existence of tax exemptions that are wicked what is wicked is the corruption that some people show in their desire to receive tax exemption as religious organisations and religious leaders paid by a tax exempt religion to live in mansions that are tax exempt and fly jets that are tax exempt and enjoy all the trappings of vast wealth without paying any taxes on the trappings because the trappings of wealth are declared by fiat to be religious assets owned by the religion and controlled by its duly constituted religious authorities.

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I'm not sure anybody said tax exemption was wicked or that taxes were wicked?

When government creates wrinkles in a system it's hardly surprising that people seek to exploit them. Hence my comment about governments spending more time getting out of the way so there are fewer wrinkles to exploit. If the tax system were less complex there would be less money taken in taxes from those who made it in the first place, less money wasted in government bureaucracy, less cost upon the individuals in terms of time and money spent complying with ridiculously complex tax law, and therefore a lesser requirement to have tax exemptions in the first place.

How does this fit with theology?

MennoSota said:

How does this fit with theology?

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Because if we, the church, did a better job of caring for the needy we wouldn't need government programs with all the associated waste, and we could direct help where it was needed with fewer opportunities to game the system.

"the power to tax involves the power to destroy." - Chief Justice John Marshall (1819)

In the case of the USA, the Constitution states “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof” ... which includes taxation of Churches.

I can't speak for anywhere else, but again, in the uber-liberal/one party state of California, ALL not-for-profit organizations/corporations are tax exempt. There's nothing unique about religious ones. Churches pay no income tax. They also pay no property taxes. But then no not-for-profit corporation does. The point has nothing to do with religion, it has to do with not-for-profit.

I've heard complaints that in the USA, clergy can have tax-exempt "B.A.Q" - Basic Allowance for Quarters. For a lot of pastors, this is a big deal since everything related to housing (not just the mortgage or rent) can be declared as BAQ. This is a big help to churches too because they can pay their pastor less than otherwise because perhaps 25 - 50% of it is tax exempt. But actually, this has nothing to do with religion, either. The BAQ stuff in the tax code was written for the military - and then extended to others with the same situation. Like soldiers, clergy in the USA were typically granted free housing as a part of their renumeration package - but increasingly, neither the military or churches supply this housing. Instead, they simply pay the military or clergy person more and then they secure their own housing. There were complaints that this large increase in salary in lieu of quarters should be tax free since it causes them to pay more taxes than their equals who are given housing as a part of their salary package, and that exemption was granted. So while this is a major exemption for the military and clergy (and some others), it too has nothing to do with religion.


- Josiah

atpollard said:

"the power to tax involves the power to destroy." - Chief Justice John Marshall (1819)

In the case of the USA, the Constitution states “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof” ... which includes taxation of Churches.

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I'm not sure that applying the same taxes to a church as any other establishment would violate the clause you mention. One can freely exercise their religion, whatever religion it may be, regardless of whether church buildings are subject to property taxes.

I do think that in general any form of income should be subject to a limitation such that it doesn't get endlessly taxed and taxed and taxed again. If I earn money and pay income taxes on it, and then give it to some other entity (whether it be church, individual, whatever) there should be no further taxes - it has already been taxed once.

atpollard said:

"the power to tax involves the power to destroy." - Chief Justice John Marshall (1819)

In the case of the USA, the Constitution states “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof” ... which includes taxation of Churches.

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I'm not sure that applying the same taxes to a church as any other establishment would violate the clause you mention. One can freely exercise their religion, whatever religion it may be, regardless of whether church buildings are subject to property taxes.

I do think that in general any form of income should be subject to a limitation such that it doesn't get endlessly taxed and taxed and taxed again. If I earn money and pay income taxes on it, and then give it to some other entity (whether it be church, individual, whatever) there should be no further taxes - it has already been taxed once.

tango said:

Because if we, the church, did a better job of caring for the needy we wouldn't need government programs with all the associated waste, and we could direct help where it was needed with fewer opportunities to game the system.

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Not true. Jesus said, "The poor will always be with you." The Great Depression showed that the church alone could not provide for all human problems (and the church isn't intended to do so). The church can work to care for its widows and orphans...something it fails miserably at, by the way.

MennoSota said:

Not true. Jesus said, "The poor will always be with you." The Great Depression showed that the church alone could not provide for all human problems (and the church isn't intended to do so). The church can work to care for its widows and orphans...something it fails miserably at, by the way.

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... and modern life shows that government is probably the least efficient means of solving just about any problem, especially helping the needy.

The fact the poor will always be with us doesn't mean we get to just shrug and leave them to it.

tango said:

... and modern life shows that government is probably the least efficient means of solving just about any problem, especially helping the needy.

The fact the poor will always be with us doesn't mean we get to just shrug and leave them to it.

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Many non-profit, Christian, organizations get significant funding via the government. This includes most Christian higher education institutions. Much of the problem is with non-profit organizations that misappropriate the money they receive. For example, there have been Somali day care centers in Minnesota that have apparently been siphoning some of the government funding and passing it on to ISIS in Somalia. The opportunity for fraud is high. This simply proves that all humans are corrupt.

tango said:

I'm not sure that applying the same taxes to a church as any other establishment would violate the clause you mention. One can freely exercise their religion, whatever religion it may be, regardless of whether church buildings are subject to property taxes.

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So what is the Tax Rate for a church? Tax rates are set locally, but in general, farms and vacant land are taxed at one rate. Residences are taxed at 10x the rate of vacant land. Commercial property is taxed at 10x the rate of residences. If the local community (like Clearwater, FL) wanted to get rid of the Church of Scientology, they could tax churches at 10x the Commercial rate. So a 1 acre farm pays $100 in taxes, a 1 acre house pays $1000 in taxes, a 1 acre business pays $10,000 in taxes and a 1 acre church pays $100,000 in taxes.

Now getting rid of the Church of Scientology would be a good thing, but do we really want the government deciding which churches to eliminate?