Tax Exemption and Religion

[cnorman18]

This issue comes up rather frequently around here; I thought it might be helpful to post some actual information, as opposed to assumptions which may or may not be well-founded.

Links provided for each quote; all are from About.com, which is, as far as I know, a site with no ideological or religious axes to grind. This section is from the “Atheist/Agnostic� section on About.com, so let’s not have any claims that this information is biased in favor of religion.

Overview

1. Tax Exemptions Are Not a Right
The most fundamental thing to understand is that no group and no church is “owed� a tax exemption. These exemptions on various taxes are in no way protected by the Constitution — they are created by the legislatures, regulated by the legislatures, and can be taken away by the legislatures. At the same time, tax exemptions — including those for religious groups — are not prohibited by the Constitution.

2. Tax Exemptions Must Be Available to All
The only restriction on how the legislatures act when it comes to creating and giving out tax exemptions is that they are not permitted to do so based upon preferences for content or based upon a group’s failure to take certain oaths. In other words, once tax exemptions are created at all, the process for allowing certain groups to take advantage of them is restricted by constitutional rights.
In particular, they cannot give exemptions to a group merely because the group is religious, and they cannot take away exemptions for the same reason. If tax exemptions are created for magazines or books or whatever, the exemptions must be available to all parties, not just religious and not just secular applicants.

3. Tax Exemptions Are Related to Public Policies
If a tax-exempt group — religious or secular — promotes ideas which contradict important public policies (like desegregation), then the group’s tax-exempt status may not be granted or extended. Tax exemptions are provided in exchange for groups’ providing services to the community; when the groups undermine important goals of the community, then the tax exemptions are no longer justified.

4. No Tax Exemptions for Commercial Activity
Tax exemptions are almost entirely restricted to those affairs which are religious rather than commercial in nature. Thus, there are numerous tax exemptions on property owned by churches and used for religious worship, but exemptions are normally denied on property used for commerce and business. The site of an actual church will be exempt, but the site of a church-owned shoe store will rarely, if ever, be exempt.
The same is true for income from sales. Money a church receives from donations of members and from financial investments are normally treated as tax-exempt. On the other hand, money which a church receives from the sale of goods and services — even including goods like religious books and magazines — will normally have sales tax applied, though not income tax at the other end.

5. Employees Pay Income Taxes
People paid by the church, whether ministers or janitors, normally have to pay income taxes on their earnings. This is also true when it comes to other payroll taxes like unemployment insurance tax and Social Security tax. One exception on this are the Old Order Amish: they don’t have to pay such taxes when self-employed, but they do have to pay when they employ others, even other Amish.

6. No Political Activity For or Against Candidates Permitted
Church tax exemptions are in jeopardy if an organization engages in direct political activity either against or on behalf of a political candidate or in an attempt to directly influence the passage of particular legislation. Churches and religious organizations, just as any other tax-exempt charitable organization, are free to comment on any social, political, or moral issues. They may not, however, speak out for or against political candidates if they wish to continue being tax-exempt. Losing tax-exempt status can mean both having to pay income taxes and that donations to the group will not be tax deductible by the donors.

IRS Exemption Requirements for Charitable Organizations

To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.
Organizations described in section 501(c)(3) are commonly referred to as charitable organizations. Organizations described in section 501(c)(3), other than testing for public safety organizations, are eligible to receive tax-deductible contributions in accordance with Code section 170.
The organization must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization's net earnings may inure to the benefit of any private shareholder or individual. If the organization engages in an excess benefit transaction with a person having substantial influence over the organization, an excise tax may be imposed on the person and any organization managers agreeing to the transaction.
Section 501(c)(3) organizations are restricted in how much political and legislative (lobbying) activities they may conduct. For a detailed discussion, see Political and Lobbying Activities. For more information about lobbying activities by charities, see the article Lobbying Issues; for more information about political activities of charities, see the FY-2002 CPE topic Election Year Issues.

Here is an article from TIME Magazine, from 1970, which -- though no doubt out of date -- notes some of the issues that are not often considered here.

The value of U.S. church and synagogue property has grown to an estimated $102 billion—all of it tax exempt. New York City alone forgives $36 million a year in potential taxes on church property. Though such exemptions are as old as the republic, even some churchmen have lately questioned the practice. Critics view it as an indirect subsidy that hikes taxes for other property owners and violates the First Amendment because it amounts to state support of religion.
The Supreme Court has consistently rebuffed attempts to raise the issue including an appeal brought by Atheist Madalyn Murray O'Hair in 1966. But last week the court finally spoke. And by a resounding vote of 7 to 1, it upheld tax exemption for churches.
Strict Construction. The new challenge was launched three years ago by Frederick Walz, an elderly New York lawyer who is so reclusive that he refuses to be photographed and conducted his entire case by mail and phone calls. To become a landowner, Walz bought .0146 of a weed-choked acre on Staten Island. When the city billed him for taxes of $5.24 on the lot's $100 value, he filed a suit to prevent New York from granting tax exemptions to churches, claiming that the city was using part of his money to support them. He was a Christian, he added, but "not a member of any religious organization, rejecting them as hostile." By the time his case reached the high court, it had drawn the opposition not only of New York City but of all three major faiths.
Only Justice William O. Douglas agreed with Walz. Summarizing his dissent from the bench, Douglas wryly urged a "strict construction" of the First Amendment's ban on official establishment of religion. In his view, tax exemption subverts the ban because it favors religion at the expense of atheistic or agnostic groups. The result, said Douglas, violates the constitutional command of Government neutrality "between believers and nonbelievers."
Middle Course. Speaking for the court majority, Chief Justice Warren E. Burger relied largely on the clear fact that church exemption is a U.S. tradition. He admitted that exemption "necessarily operates to afford an indirect economic benefit" but he felt that the practice does not produce the kind of governmental "sponsorship, financial support and active involvement" that the First Amendment's drafters intended to guard against. It is no more an aid to religious organizations than other forms of assistance permitted by the court, including the use of state funds to pay for the busing of parochial school pupils and some of their textbooks. If the Government did tax churches, Burger argued, it would become even more involved in religion as tax collectors and clergymen haggled over such matters as "tax valuation of church property, tax liens, tax foreclosures, and the direct confrontations and conflicts that follow in the train of those legal processes."
Without specifically rebuffing the claims of atheists, Burger said that the present arrangement is a workable middle course between "either governmentally established religion or governmental interference with religion."
The decision will not deter the several Protestant denominations and Jewish groups that have recently begun urging their members to pay voluntary property taxes by reimbursing their communities for fire and police protection. However, the court's action did leave hanging two other emerging church-state issues.
A number of churches own television stations, rental properties and even girdle factories whose only religious purpose is to produce church income. Even religious groups which oppose blanket property taxes on churches have recently gone on record as favoring selective taxes on the income of these "unrelated" businesses, and several suits challenging such tax-sheltered enterprises are now making their way through lower courts.
More important, the high court has agreed to consider a case involving the effort of the Pennsylvania legislature to aid hard-pressed parochial and other private schools with grants for teachers' salaries and teaching aids (TIME, Dec. 19, 1969). Douglas particularly was troubled by this trend. As he sees it, "the extent to which [churches] are feeding from the public trough in a variety of forms is alarming." But the majority of the Justices, in upholding the "indirect" economic benefit of exemption, hinted that they too might have doubts about more direct payments. Said Burger: "Obviously a direct money subsidy would be a relationship pregnant with involvement."

The power to tax is the power to control and to destroy. Though a case can be made that the exemption from taxes constitutes a subsidy of religion, it ought to be recognized, as Justice Burger did in the decision cited above, that taxation of religion would result in an enormous involvement of government in religion that would inarguably constitute government interference and control. The devil, as they say, is in the details.

It’s also a fact that the property tax system, which is most often the focus of these debates (as it was in the case reported above), was never designed to take the nature of religious properties into account. The value, on paper, of the Cathedral of St. John the Divine in New York City, for example, would be enormous; but in reality, what else could this property be used for? It is not only a building used for worship, but a historical landmark; it’s not going to be razed and a McDonald’s and a Starbucks built on the site, and that wouldn’t be a good thing anyway, peace to the atheists who disagree. I’m a Jew, and I’d prefer that it stayed where it is. How could the actual real-world value of a structure like that even be assessed? Should a small country church, like the ones I pastored as a Methodist minister, have to turn over perhaps half of its annual budget to pay property tax on an aging building that happens to sit on a quarter-acre of land that’s never been used for anything else? Shouldn’t that property be taxed when it actually brings in income for the organization, e.g. when it is actually sold?

I’m not crazy about the idea of “property taxes� anyway; hundreds of thousands of small family farms have been absorbed into huge corporate megafarms, and an entire way of life is becoming extinct, because people are forced to pay for the theoretical value of a possible sale of land that has not changed hands for generations. The value of property should be taxed when the sale of that property actually realizes a profit for its owner, and not perpetually taxed, at continually rising rates, just because it exists; and I think that applies to ALL real property, not just property used for religious purposes.

I think the questions for debate are obvious enough, but pro forma:

Are tax exemptions for religious organizations legitimate?

Why or why not?

How do you respond to those who say (as I do) that the issue is not as simple, obvious and black-and-white as it is usually presented by either side?

If you acknowledge the complexity of the issue, how, exactly, should current law be amended to make it better or more fair?

[McCulloch]

2. Tax Exemptions Must Be Available to All
The only restriction on how the legislatures act when it comes to creating and giving out tax exemptions is that they are not permitted to do so based upon preferences for content or based upon a group’s failure to take certain oaths. In other words, once tax exemptions are created at all, the process for allowing certain groups to take advantage of them is restricted by constitutional rights.
In particular, they cannot give exemptions to a group merely because the group is religious, and they cannot take away exemptions for the same reason. If tax exemptions are created for magazines or books or whatever, the exemptions must be available to all parties, not just religious and not just secular applicants.

I fully agree with this principle. However, in my province, the tax exemptions granted to religious organizations is different from those given to secular not-for-profit or charitable organizations. One difference is in the reporting requirements. Secular organizations have a greater burden of proof to demonstrate that they are, in fact, doing what they are chartered to do, in order to keep their charitable status. Churches and other religious organizations are assumed by the government to be doing what they should and have much lighter reporting requirements.

3. Tax Exemptions Are Related to Public Policies
If a tax-exempt group — religious or secular — promotes ideas which contradict important public policies (like desegregation), then the group’s tax-exempt status may not be granted or extended. Tax exemptions are provided in exchange for groups’ providing services to the community; when the groups undermine important goals of the community, then the tax exemptions are no longer justified.

Here again, I am in complete agreement. However, there may be fierce opposition from certain large religious organizations. For example, the largest christian denomination prohibits one gender from being employed in leadership positions in their organization merely on the basis of their not having a Y chromosome. I can only imagine the fuss should someone suggest that their charitable status be revoked because they are an unabashedly institutionally sexist organization.

The power to tax is the power to control and to destroy. Though a case can be made that the exemption from taxes constitutes a subsidy of religion, it ought to be recognized, as Justice Burger did in the decision cited above, that taxation of religion would result in an enormous involvement of government in religion that would inarguably constitute government interference and control. The devil, as they say, is in the details.

I would like to see a level playing field. Whatever tax base is being used to charge, for example, the property owned by Community Living Toronto, a secular charitable organization should be used to charge the property owned by Metropolitan Community Church of Toronto. Is that so difficult to implement?

Now, many church properties have greater historical value than liturgical. However I don't feel that the property tax system is the right place to address this. How is granting a property tax exemption to the Prayer Palace going to save the architectural beauty of Notre Dame?

It’s also a fact that the property tax system, which is most often the focus of these debates (as it was in the case reported above), was never designed to take the nature of religious properties into account. The value, on paper, of the Cathedral of St. John the Divine in New York City, for example, would be enormous; but in reality, what else could this property be used for?

While in Glasgow recently, I visited an old church which is now doing quite well as a pub.

The building is not being neglected by a struggling congregation of blue haired Christians, not has it been razed for a Starbucks, the city's by-laws do protect their architectural heritage.

I’m not crazy about the idea of “property taxes� anyway;

That is another debate. There are numerous problems with regressive taxes including property taxes and sales taxes. But whatever is done with taxes, I believe that it should be equitably applied by a government that is strictly neutral (blind if you will) towards religion.

[cnorman18]

2. Tax Exemptions Must Be Available to All
The only restriction on how the legislatures act when it comes to creating and giving out tax exemptions is that they are not permitted to do so based upon preferences for content or based upon a group’s failure to take certain oaths. In other words, once tax exemptions are created at all, the process for allowing certain groups to take advantage of them is restricted by constitutional rights.
In particular, they cannot give exemptions to a group merely because the group is religious, and they cannot take away exemptions for the same reason. If tax exemptions are created for magazines or books or whatever, the exemptions must be available to all parties, not just religious and not just secular applicants.

I fully agree with this principle. However, in my province, the tax exemptions granted to religious organizations is different from those given to secular not-for-profit or charitable organizations. One difference is in the reporting requirements. Secular organizations have a greater burden of proof to demonstrate that they are, in fact, doing what they are chartered to do, in order to keep their charitable status. Churches and other religious organizations are assumed by the government to be doing what they should and have much lighter reporting requirements.

We should make it clear that you are a resident of Canada and not the United States, and that the material posted here is not necessarily applicable to the laws of other nations.

That said, I think that churches ought to have reporting requirements at least as rigorous as any other charitable organization, and perhaps more so. Outfits like the PTL Club, Benny Hinn Ministries, and [insert televangelist organization here] ought to have their books examined with fine-tooth combs and magnifying glasses, and any mansions or yachts owned by claimed “religious leaders� ought to be considered huge, flashing red lights with clanging alarm bells. If those guys aren’t engaged in “profit-making enterprises,� what the H are they doing? FUrther, any organization which promises or claims "miracles" or "healilng" ought to be required to present incontrovertible scientific evidence of the truth of those claims that would stand up in a court of law, or also surrender their tax-exempt status -- and possibly be prosecuted for fraud.

3. Tax Exemptions Are Related to Public Policies
If a tax-exempt group — religious or secular — promotes ideas which contradict important public policies (like desegregation), then the group’s tax-exempt status may not be granted or extended. Tax exemptions are provided in exchange for groups’ providing services to the community; when the groups undermine important goals of the community, then the tax exemptions are no longer justified.

Here again, I am in complete agreement. However, there may be fierce opposition from certain large religious organizations. For example, the largest christian denomination prohibits one gender from being employed in leadership positions in their organization merely on the basis of their not having a Y chromosome. I can only imagine the fuss should someone suggest that their charitable status be revoked because they are an unabashedly institutionally sexist organization.

Might be an interesting court case. Bob Jones University lost its tax-exempt status in 1976 because of its refusal to hire people who were engaged in or advocated interracial marriage, so there is a precedent.

That said, I wonder how slippery a slope it would be to allow government to determine the theological teachings of religious organizations. Outright racism is one thing; determining the proper qualifications of priests might -- I say might -- be a different matter. How long before synagogues are prevented from barring the admission to membership of Christians or even the hiring of Christian rabbis? It’s not a silly question. Some “Messianic Jews� complain about that restriction now.

The power to tax is the power to control and to destroy. Though a case can be made that the exemption from taxes constitutes a subsidy of religion, it ought to be recognized, as Justice Burger did in the decision cited above, that taxation of religion would result in an enormous involvement of government in religion that would inarguably constitute government interference and control. The devil, as they say, is in the details.

I would like to see a level playing field. Whatever tax base is being used to charge, for example, the property owned by Community Living Toronto, a secular charitable organization should be used to charge the property owned by Metropolitan Community Church of Toronto. Is that so difficult to implement?

It might be. Suppose a homophobic county clerk (in American jurisdictions) decided to assess an excessive and punitive tax on the MCC. That would force the MCC to spend their assets on appeals and appeals of appeals till the assessment was corrected, if it is ever corrected at all. You see the problem? Tax rates are not automatically determined without human intervention; they depend on human decisions, and those can be enormously biased and difficult to correct.

Now, many church properties have greater historical value than liturgical. However I don't feel that the property tax system is the right place to address this. How is granting a property tax exemption to the Prayer Palace going to save the architectural beauty of Notre Dame?

Again; who guards the guardians? Assuming that tax assessments are equitably imposed is, shall we say, naïve. To go in the other direction, a fundamentalist tax assessor could easily charge a church of a denomination he likes a pittance while punitively assessing a synagogue, or, God knows, a mosque.

One reason I’m skeptical of government involvement in religion to any degree whatever is the history of my own people, where exactly that sort of thing has happened over and over and over again -- till we got here, in the US, where we have been more left alone than anywhere in all our long history as a direct result of the strict separation of Church and State, which historically and legally has included the exemption of religion from regulation by tax. I don’t trust government at all in ANY matter of public interest and liberty, and least of all in those areas where a bureaucracy is involved. If there is a lesson that we Jews have learned over the centuries, it is that "government bureaucrats are not your friends."

It’s also a fact that the property tax system, which is most often the focus of these debates (as it was in the case reported above), was never designed to take the nature of religious properties into account. The value, on paper, of the Cathedral of St. John the Divine in New York City, for example, would be enormous; but in reality, what else could this property be used for?

While in Glasgow recently, I visited an old church which is now doing quite well as a pub.

The building is not being neglected by a struggling congregation of blue haired Christians, not has it been razed for a Starbucks, the city's by-laws do protect their architectural heritage.

I've been to a neighborhood bar in Lansing, Michigan called The Old Church, and it was just that. Lovely place. They didn't water the liquor, either.

But if the city is overwhelmingly hardshell Baptist, and the building involved is a historic synagogue? Can you depend on that goodwill of the community? Guess how many historic synagogues have been preserved in Poland, Russia and the Baltic nations. Guess how many were taxed to death before Hitler was a gleam in his daddy’s eye. YOU might assume that a system that allows the taxing of religion can be made fair and equitable and unbiased against any religion. I think that assumption is -- shall we say -- unjustified and historically unjustifiable.

I’m not crazy about the idea of “property taxes� anyway;

That is another debate. There are numerous problems with regressive taxes including property taxes and sales taxes. But whatever is done with taxes, I believe that it should be equitably applied by a government that is strictly neutral (blind if you will) towards religion.

The problem is that “blindness,� where human-staffed legislatures and bureaucracies are involved, has historically been a starry-eyed Utopian dream. If the bureaucracy involved were staffed with some of the members of this forum, for instance, we would see religious organizations gleefully hounded to death while those staffers piously proclaimed their neutrality and “blindness,� and I feel sure that that is as obvious to you as it is to me.

I trust the government vis-à-vis religion only insofar as it keeps its grubby hands entirely off; and the power to tax is, and remains, the power to control and to destroy, and I don’t see any legislative remedy to that being even theoretically possible. Best evidence for that is this: The only system that has EVER worked for my people is THIS one, just as it is.

As I said; churches should be required to document their nonprofit and nonpolitical status exhaustively and openly, and if they violate those rules, they ought to be taxed like any other business; but if they stay within the guidelines, they ought to be left alone. Any other structure invites abuse, and historically has ALWAYS resulted in exactly that -- either for or against particular religions or religion in general.

[McCulloch]

We should make it clear that you are a resident of Canada and not the United States, and that the material posted here is not necessarily applicable to the laws of other nations.

However, our countries are similar enough on these issues that we can discuss general principles.

That said, I think that churches ought to have reporting requirements at least as rigorous as any other charitable organization, and perhaps more so.

No, it should be the same. Not more. Not less.

Might be an interesting court case. Bob Jones University lost its tax-exempt status in 1976 because of its refusal to hire people who were engaged in or advocated interracial marriage, so there is a precedent.

But would it be different if a church refused to appoint ministers, pastors, elders on the basis of race? Bob Jones University is not a church or religious organization under law, is it? It is a church sponsored university.

That said, I wonder how slippery a slope it would be to allow government to determine the theological teachings of religious organizations. Outright racism is one thing; determining the proper qualifications of priests might -- I say might -- be a different matter.

Should there be a religious tax exemption for the Church of the Holy White Soldiers of Christ? Is it OK to say that the priest must have a Y chromosome but it is not OK to say that a priest must be lacking certain types of melanin? Would a similar double standard be applied to a non-religious charitable organization? Why should it be any different?

How long before synagogues are prevented from barring the admission to membership of Christians or even the hiring of Christian rabbis? It’s not a silly question. Some “Messianic Jews� complain about that restriction now.

And how is that going for them? Don't you think that affirmation of the central doctrines of the religious group is a reasonable requirement of the job of religious leader?

I would like to see a level playing field. Whatever tax base is being used to charge, for example, the property owned by Community Living Toronto, a secular charitable organization should be used to charge the property owned by Metropolitan Community Church of Toronto. Is that so difficult to implement?

It might be. Suppose a homophobic county clerk (in American jurisdictions) decided to assess an excessive and punitive tax on the MCC.

I don't know how things work where you live, but here county clerks (or city clerks) do not decide the tax rates. Tax rates are usually set out in legislation. In the case of property tax, it is set as a proportion of the assessed value of the property. Now, as you have pointed out, there is a bit of leeway around assessing the value of any particular property, particularly one which is unlikely to be sold. There is an appeal process.

That would force the MCC to spend their assets on appeals and appeals of appeals till the assessment was corrected, if it is ever corrected at all.

And this is any better than CLT having to spend their assets on appeals of a harsh assessment made by a clerk who hates people with Down's Syndrome? I'm just saying that the process, however flawed, should be the same for religious and secular charities.

You see the problem? Tax rates are not automatically determined without human intervention; they depend on human decisions, and those can be enormously biased and difficult to correct.

Yes.

Assuming that tax assessments are equitably imposed is, shall we say, naïve.

Then it is a good thing that my argument does not depend on tax assessments being equitably imposed.

To go in the other direction, a fundamentalist tax assessor could easily charge a church of a denomination he likes a pittance while punitively assessing a synagogue, or, God knows, a mosque.

And is there a good reason to believe that religions would be the only target of such discrimination? Are you arguing that religions should get a pass on property tax because they might be the target of discrimination. What protection would you provide for east metro youth services which provides mental health services to youth, including LGBT youth? Could not your hypothetical fundamentalist tax assessor be as punitive against this organization as the mosque?

One reason I’m skeptical of government involvement in religion to any degree whatever is the history of my own people, where exactly that sort of thing has happened over and over and over again -- till we got here, in the US, where we have been more left alone than anywhere in all our long history as a direct result of the strict separation of Church and State, which historically and legally has included the exemption of religion from regulation by tax.

I do not equate exemption of religion from tax as a part of the strict separation of Church and State. Are the churches exempt from sales tax or income tax? I'll bet your rabbi pays income tax on whatever salary he gets. I'll bet you did not object to paying tax on whatever salary you got when you were a Christian minister. Why should property tax work differently? I am saying that our governments should keep church and state strictly, very strictly, separate. Property is property, income is income, a non-profit or charity is a non-profit or charity, regardless of whatever religious implications that might be associated with it.

I don’t trust government at all in ANY matter of public interest and liberty, and least of all in those areas where a bureaucracy is involved. If there is a lesson that we Jews have learned over the centuries, it is that "government bureaucrats are not your friends."

I cannot help you there.

But if the city is overwhelmingly hardshell Baptist, and the building involved is a historic synagogue? Can you depend on that goodwill of the community? Guess how many historic synagogues have been preserved in Poland, Russia and the Baltic nations. Guess how many were taxed to death before Hitler was a gleam in his daddy’s eye. YOU might assume that a system that allows the taxing of religion can be made fair and equitable and unbiased against any religion. I think that assumption is -- shall we say -- unjustified and historically unjustifiable.

Yes, because the Eastern Europeans and the Nazis were unfair against religions, we should give them a break. Good reasoning.

As I said; churches should be required to document their nonprofit and nonpolitical status exhaustively and openly, and if they violate those rules, they ought to be taxed like any other business; but if they stay within the guidelines, they ought to be left alone.

And I'll bet you cannot even see the double standard. You complain that some clerk might unfairly assess a synagogue but that same clerk would not decide that the synagogue's affairs are gone over with a fine tooth comb and the Four-Square Gospel Church's records only get a cursory glance.

[nygreenguy]

Are the churches exempt from sales tax or income tax?

Yes, if the church buys something, it pays no tax. I also believe the churches income is exempt. Now, the people who work for it do not count. It only applies to the entity.

[cnorman18]

We should make it clear that you are a resident of Canada and not the United States, and that the material posted here is not necessarily applicable to the laws of other nations.

However, our countries are similar enough on these issues that we can discuss general principles.

Of course.

That said, I think that churches ought to have reporting requirements at least as rigorous as any other charitable organization, and perhaps more so.

No, it should be the same. Not more. Not less.

Okay; but those that are suspect on their face ought to be pretty closely inspected, even if according to the same standards. Mansions, etc., like I said.

Might be an interesting court case. Bob Jones University lost its tax-exempt status in 1976 because of its refusal to hire people who were engaged in or advocated interracial marriage, so there is a precedent.

But would it be different if a church refused to appoint ministers, pastors, elders on the basis of race? Bob Jones University is not a church or religious organization under law, is it? It is a church sponsored university.

I don’t think that would be legal, but since the Mormons knocked it off, I don’t know of a legit church that does that. (I understand that at one time the LDS wouldn’t ordain blacks at some administrative level or other, bishops maybe.)

That said, I wonder how slippery a slope it would be to allow government to determine the theological teachings of religious organizations. Outright racism is one thing; determining the proper qualifications of priests might -- I say might -- be a different matter.

Should there be a religious tax exemption for the Church of the Holy White Soldiers of Christ? Is it OK to say that the priest must have a Y chromosome but it is not OK to say that a priest must be lacking certain types of melanin? Would a similar double standard be applied to a non-religious charitable organization? Why should it be any different?

That’s why this issue is difficult. Is gender discrimination absolutely and always as clearly unfair and illegal as racial discrimination? I’m not a Catholic; I don’t know the theology behind that restriction. I’m just not sure if the government ought to have the right to overturn a practice that’s measured in centuries and would inevitably produce a massive outcry from Catholics. This isn‘t just a matter of accepting applications from women. This would constitute a major, but major, alteration in the structure and governance of the Church. I’m not saying it’s not right to outlaw that discrimination, but it’s hardly practical or (to be realistic) likely -- and in any case, it‘s surely not a simple question with one obviously right answer.

Also, just to be clear, I’m not proposing that the standards be any different for secular nonprofits than for religious organizations. Secular nonprofits should be tax-exempt too. It just seems to me that there are factors in religious groups that are different; few nonprofits maintain ancient and elaborate historical landmarks, for instance, or have key doctrines about the gender of their officials.

How long before synagogues are prevented from barring the admission to membership of Christians or even the hiring of Christian rabbis? It’s not a silly question. Some “Messianic Jews� complain about that restriction now.

And how is that going for them? Don't you think that affirmation of the central doctrines of the religious group is a reasonable requirement of the job of religious leader?

Sure, but that’s my point. Not everyone believes that IS a central doctrine, just as you don’t believe that a male priesthood is a central doctrine of Catholicism. “Messianics“ claim that belief in Jesus is perfectly proper and right for Jews, and in fact disbelief in their Messiah is the illegitimate belief -- and don’t forget that there are a helluva lot more Christians around than Jews.

The question might be, who gets to decide what’s reasonable and what isn’t, and when? The government -- or the followers of that religion? Clearly there are limits, blatant racism being one of them -- but who gets to place those limits, and on what grounds? It’s just not a simple question with one obviously right answer.

I would like to see a level playing field. Whatever tax base is being used to charge, for example, the property owned by Community Living Toronto, a secular charitable organization should be used to charge the property owned by Metropolitan Community Church of Toronto. Is that so difficult to implement?

It might be. Suppose a homophobic county clerk (in American jurisdictions) decided to assess an excessive and punitive tax on the MCC.

I don't know how things work where you live, but here county clerks (or city clerks) do not decide the tax rates. Tax rates are usually set out in legislation. In the case of property tax, it is set as a proportion of the assessed value of the property. Now, as you have pointed out, there is a bit of leeway around assessing the value of any particular property, particularly one which is unlikely to be sold. There is an appeal process.

In the US, or at least in my state, property taxes are set by the individual city, in the person of the City Council, and assessments are done by neighborhood. The taxes are used to support the schools; rich communities have wonderful schools, poor communities have lousy ones. There is a "Robin Hood" plan in place in Texas, where rich communities are forced to share their tax revenue with poor communities, and they sometimes retaliate by setting their tax rates at ridiculously low levels. Lawsuits and bickering and vociferous public debate are all thick on the ground, and no one -- repeat, NO ONE -- considers the system fair.

That would force the MCC to spend their assets on appeals and appeals of appeals till the assessment was corrected, if it is ever corrected at all.

And this is any better than CLT having to spend their assets on appeals of a harsh assessment made by a clerk who hates people with Down's Syndrome? I'm just saying that the process, however flawed, should be the same for religious and secular charities.

I quite agree with you on that point; are you saying that NO charity should be tax-exempt? I’m not saying that religious organizations should be singled out as special, any more than they are now, as we’ve seen. Secular nonprofits should be tax-exempt too. What’s wrong with that?

I DO think that there are considerations with religious groups that aren’t present in secular groups, specific religious beliefs among them. It would, and should, be illegal to bar Christians from working for a secular charity, for instance, but not for a synagogue (even though my own synagogue does have Gentile staffers that are not, of course, clergy).

You see the problem? Tax rates are not automatically determined without human intervention; they depend on human decisions, and those can be enormously biased and difficult to correct.

Yes.

Assuming that tax assessments are equitably imposed is, shall we say, naïve.

Then it is a good thing that my argument does not depend on tax assessments being equitably imposed.

If they aren’t going to be equitably imposed, what’s the point? Spreading the injustice around equally?

To go in the other direction, a fundamentalist tax assessor could easily charge a church of a denomination he likes a pittance while punitively assessing a synagogue, or, God knows, a mosque.

And is there a good reason to believe that religions would be the only target of such discrimination? Are you arguing that religions should get a pass on property tax because they might be the target of discrimination. What protection would you provide for east metro youth services which provides mental health services to youth, including LGBT youth? Could not your hypothetical fundamentalist tax assessor be as punitive against this organization as the mosque?

I’m not saying religious organizations should “get a pass� on any grounds; they should be exempt like any other nonprofit. I’m saying that there are aspects of those organizations that ARE different and make government involvement more complicated, like whether or not to force the Catholic Church to ordain female priests. I’m not sure that government has that right; on the present point, yes, bias would affect secular nonprofits too, but that’s not exactly a good reason to tax them, now is it?

One reason I’m skeptical of government involvement in religion to any degree whatever is the history of my own people, where exactly that sort of thing has happened over and over and over again -- till we got here, in the US, where we have been more left alone than anywhere in all our long history as a direct result of the strict separation of Church and State, which historically and legally has included the exemption of religion from regulation by tax.

I do not equate exemption of religion from tax as a part of the strict separation of Church and State.

How is the power to tax not the power to control and destroy? Your trust in government integrity and fairness isn’t, historically speaking, very well founded.

Are the churches exempt from sales tax or income tax? I'll bet your rabbi pays income tax on whatever salary he gets. I'll bet you did not object to paying tax on whatever salary you got when you were a Christian minister. Why should property tax work differently?

Because property is not income.

INCOME should be taxed, for any individual; and PROFIT should be taxed for any organization. That’s what we have now, and it seems fair and equitable to me.

As I said below, the problem with the unfairness of secular property being taxed and religious property exempt lies in the fact that the property tax itself is unfair. Treating churches unfairly too doesn’t solve that problem. Secular nonprofits should be exempt from property taxes too, if the churches are. Best alternative is to abolish the property tax entirely. If you knew about the squabbles and court cases about varying property tax rates (each CITY sets its own) and school financing here in Texas, you’d see where I’m coming from -- it’s not about religion.

I am saying that our governments should keep church and state strictly, very strictly, separate. Property is property, income is income, a non-profit or charity is a non-profit or charity, regardless of whatever religious implications that might be associated with it.

I quite agree with that; and to keep church and state separate, the government ought not have the power to regulate religion by taxing it.

I don’t trust government at all in ANY matter of public interest and liberty, and least of all in those areas where a bureaucracy is involved. If there is a lesson that we Jews have learned over the centuries, it is that "government bureaucrats are not your friends."

I cannot help you there.

Precisely. If you know another way to absolutely guarantee that the power to tax won’t be abused -- not only against Jews, but against ANY “out� group -- I’m willing to hear it. The system we have NOW has worked very well indeed for 250 years or so, and if it ain’t broke…

But if the city is overwhelmingly hardshell Baptist, and the building involved is a historic synagogue? Can you depend on that goodwill of the community? Guess how many historic synagogues have been preserved in Poland, Russia and the Baltic nations. Guess how many were taxed to death before Hitler was a gleam in his daddy’s eye. YOU might assume that a system that allows the taxing of religion can be made fair and equitable and unbiased against any religion. I think that assumption is -- shall we say -- unjustified and historically unjustifiable.

Yes, because the Eastern Europeans and the Nazis were unfair against religions, we should give them a break. Good reasoning.

That’s not my point, and I can’t help but suspect that you are being a bit disingenuous in missing it and distorting it.

It’s totally possible to abuse the tax system, it consistently HAS been so abused, and that opportunity for abuse ought to be eliminated. Like I said; the system we have now has worked very well, no other system has, and I see no reason to hand this very sharp ax to the bureaucrats now. Can you guarantee that this power won’t be used again in this way?

Yes, I am sensitive to these issues; most Jews are. There aren’t many of us, and we’ve been a tiny and hated minority everywhere we’ve ever lived but Israel. The separation of church and state has been a lifesaver for us in the US, and has made this country a refuge for us. Can you at least admit that my concern here is real, and not just sloppy reasoning?

Why should we -- or anyone -- be forced to trust the communities we live in to be fair, when all we have to do to eliminate that risk is to leave things as they are?

As I said; churches should be required to document their nonprofit and nonpolitical status exhaustively and openly, and if they violate those rules, they ought to be taxed like any other business; but if they stay within the guidelines, they ought to be left alone.

And I'll bet you cannot even see the double standard. You complain that some clerk might unfairly assess a synagogue but that same clerk would not decide that the synagogue's affairs are gone over with a fine tooth comb and the Four-Square Gospel Church's records only get a cursory glance.

I’ve already said that nonprofits ought to be exempt from property taxes too. In fact, once again, I think property taxes ought to be abolished. They are inherently unfair. Tax the profit on property that is SOLD, at the same rate for everyone -- corporations, nonprofits, churches, synagogues, everybody. When there is actual income, that income ought to be taxed. What’s the problem with that? Sounds fair to me.

[Maya]

One point I'd like to bring up is that it can be demonstrated that religious organizations are in fact greatly favored in tax exemptions by the fact that they are consistently allowed to flout the law regarding prohibition of political activity. From small town pastors telling their congregations how to vote on the ballots regarding abortion and gay marriage, to the Mormons donating huge amounts of money to the campaign against Proposition 8 in California a couple of years back, tax-exempt religious organizations involve themselves extensively in American politics without consequence. Until the rules are strictly enforced, the arguments over which specific taxes they should pay are largely pointless.

[McCulloch]

Are the churches exempt from sales tax or income tax?

Yes, if the church buys something, it pays no tax. I also believe the churches income is exempt. Now, the people who work for it do not count. It only applies to the entity.

That's odd. I don't think that churches here are exempt from sales tax. They are, however, exempt from income tax, because, they are by definition non-profit or charitable organizations, with no income.

[McCulloch]

Okay; but those that are suspect on their face ought to be pretty closely inspected, even if according to the same standards. Mansions, etc., like I said.

And your hypothetical prejudiced clerk gets to decide who is suspect. Right?

That’s why this issue is difficult. Is gender discrimination absolutely and always as clearly unfair and illegal as racial discrimination?

Why would it not be?

I’m not a Catholic; I don’t know the theology behind that restriction. I’m just not sure if the government ought to have the right to overturn a practice that’s measured in centuries and would inevitably produce a massive outcry from Catholics.

No one is telling them to over-turn their ancient sexist discrimination. Just that if they continue to work at cross-purposes to the established values of our constitution, they should not qualify for a preferential tax status.

Also, just to be clear, I’m not proposing that the standards be any different for secular nonprofits than for religious organizations. Secular nonprofits should be tax-exempt too.

We agree. However, in the case of property taxes, they are not.

It just seems to me that there are factors in religious groups that are different; few nonprofits maintain ancient and elaborate historical landmarks, for instance, or have key doctrines about the gender of their officials.

Groups which find themselves in possession of ancient and elaborate historical landmarks should be allowed to divest themselves of them if they wish. Ancient stupidity and discrimination is still stupidity and discrimination.

The question might be, who gets to decide what’s reasonable and what isn’t, and when? The government -- or the followers of that religion? Clearly there are limits, blatant racism being one of them -- but who gets to place those limits, and on what grounds? It’s just not a simple question with one obviously right answer.

So why is racism a clear limit but sexism is not? How about using the country's Bill of Rights (or in our case the Charter of Rights and Freedoms)?

In the US, or at least in my state, property taxes are set by the individual city, in the person of the City Council, and assessments are done by neighborhood. The taxes are used to support the schools; rich communities have wonderful schools, poor communities have lousy ones. There is a "Robin Hood" plan in place in Texas, where rich communities are forced to share their tax revenue with poor communities, and they sometimes retaliate by setting their tax rates at ridiculously low levels. Lawsuits and bickering and vociferous public debate are all thick on the ground, and no one -- repeat, NO ONE -- considers the system fair.

It is an unfair system, therefore religious organizations should be allowed to opt out. Right?

Are you saying that NO charity should be tax-exempt?

No, I am saying that a charity's involvement in religion should make no difference on its tax status. Let various levels of government exempt or not exempt various charities from whichever taxes are appropriate. But let them do it without regard for the charity's religion.

If they aren’t going to be equitably imposed, what’s the point? Spreading the injustice around equally?

A particular tax may not be equitably imposed, therefore we are justified in compounding and institutionalizing another injustice. ??

The problem with the unfairness of secular property being taxed and religious property exempt lies in the fact that the property tax itself is unfair. Treating churches unfairly too doesn’t solve that problem. Secular nonprofits should be exempt from property taxes too, if the churches are. Best alternative is to abolish the property tax entirely. If you knew about the squabbles and court cases about varying property tax rates (each CITY sets its own) and school financing here in Texas, you’d see where I’m coming from -- it’s not about religion.

You have hit on a great solution. Treat religious and non-religious non-profits, at least under tax laws, the same. Brilliant and may I say simple.

I’ve already said that nonprofits ought to be exempt from property taxes too. In fact, once again, I think property taxes ought to be abolished. They are inherently unfair. Tax the profit on property that is SOLD, at the same rate for everyone -- corporations, nonprofits, churches, synagogues, everybody. When there is actual income, that income ought to be taxed. What’s the problem with that? Sounds fair to me.

Where I live, municipalities are not allowed to impose income taxes. They rely on fees, fines, tolls and property taxes for their revenue.

[cnorman18]

One point I'd like to bring up is that it can be demonstrated that religious organizations are in fact greatly favored in tax exemptions by the fact that they are consistently allowed to flout the law regarding prohibition of political activity. From small town pastors telling their congregations how to vote on the ballots regarding abortion and gay marriage, to the Mormons donating huge amounts of money to the campaign against Proposition 8 in California a couple of years back, tax-exempt religious organizations involve themselves extensively in American politics without consequence. Until the rules are strictly enforced, the arguments over which specific taxes they should pay are largely pointless.

I would go along with that, with a caveat: While no religious organization or institution (or ANY nonprofit, for that matter) ought to support any particular candidate or party as a matter of policy or adherence to doctrine, ANY person, including any clergyman, has the right to give his personal opinion on ANY subject, including from the pulpit of a church, and including his opinion on what constitutes "good" and "evil." It's a First Amendment right.

Let's also not forget this fact: it's not only conservative Christians and fundamentalists that violate those prohibitions. In particular, black churches have been getting out the vote for the Democratic party and for liberal candidates for decades, as have many white urban and suburban churches; so have some Jewish congregations, I will freely admit. Those are all violations of written law too.