S/O church tax status

[fraidycat]

Why should churches have carte blanche tax exempt status? Surely not all or even the majority of their income is used for charitable purposes?

 

IF they were to lose that status, I count it as a win for taxpayers everywhere. I don't see it happening because they are protected, but it wouldn't be terrible if it did.

[TranquilMind]

Why should churches have carte blanche tax exempt status? Surely not all or even the majority of their income is used for charitable purposes?

 

IF they were to lose that status, I count it as a win for taxpayers everywhere. I don't see it happening because they are protected, but it wouldn't be terrible if it did.

Disagree.  Churches perform many community services so that taxpayers don't have to do it themselves.  This should be encouraged as a matter of public policy. 

[regentrude]

Disagree.  Churches perform many community services so that taxpayers don't have to do it themselves.  This should be encouraged as a matter of public policy. 

 

But then maybe the better way to go about this is to grant tax deductions for amount that is specifically used for these activities?

 

I agree that there are activities that are in the general society's interest and that should be supported. I don't see why that means granting the entire church a general tax exempt status.

 

I fundamentally disagree that the taxpayer should fund the lavish lifestyle of people like Joyce Meyer who operate lucrative businesses under a religious disguise.

[Carol in Cal.]

I agree that there are activities that are in the general society's interest and that should be supported. I don't see why that means granting the entire church a general tax exempt status.

Because of the priority of the freedom of religious expression clause, American government generally (but not always) avoids picking its way through or legislating various activities of religious nonprofits.

 

The sentiment supporting that is definitely shifting, though.

 

[regentrude]

Because of the priority of the freedom of religious expression clause, American government generally (but not always) avoids picking its way through or legislating various activities of religious nonprofits.

 

The sentiment supporting that is definitely shifting, though.

 

But freedom of religious expression does not mean that this religious expression must occur on the taxpayer's dime. The churches are free to express themselves however they choose, their activities do not need to be legislated - the government simply could subsidy only the activities that are beneficial to society as a whole. Want to run an orphanage? Fine, deduct your expenses. Want to pay your star televangelist a yearly salary of $900,000? No tax money for that.

 

[ChocolateReignRemix]

Because of the priority of the freedom of religious expression clause, American government generally (but not always) avoids picking its way through or legislating various activities of religious nonprofits.

 

The sentiment supporting that is definitely shifting, though.

 

To be fair, tax exempt status is a privilege that has been granted to churches. Taxing churches the same as everyone else would not be a violation of the 1st amendment.  Taxing churches more than the rest of society, or certain religions more than others, would be a violation.  The same would apply for stripping a church of its exempt status for its beliefs.

 

Based on previous SCOTUS decisions (Walz v Tax Commission of New York City, 1970 being one of the more recent), the courts have frowned up allowing taxation of churches as it opens the door to the possibility of certain faiths being favored over others.

 

 

[Carol in Cal.]

 Want to pay your star televangelist a yearly salary of $900,000? No tax money for that.

I think that those high salaries for teleevangelists are appalling, no argument there.

But salary is not really the issue.  If the church pays that kind of salary, it is taxed on the other end as income tax.  So either way the government gets its money.

[Daria]

I don't think it's fair to call out churches specifically on this.  For example, there is a ton of money flowing through non profit "trade associations" to highly paid lobbyists.  Would it make sense to somehow cap salaries paid by nonprofits?  Not sure about that.

[Pawz4me]

But freedom of religious expression does not mean that this religious expression must occur on the taxpayer's dime. The churches are free to express themselves however they choose, their activities do not need to be legislated - the government simply could subsidy only the activities that are beneficial to society as a whole. Want to run an orphanage? Fine, deduct your expenses. Want to pay your star televangelist a yearly salary of $900,000? No tax money for that.

 

I also firmly believe churches should not be able to gobble up surrounding houses and land that they have no immediate use for.  Their exemption from property tax is often what makes it feasible for them to do that, and yet it frequently drives up housing/rental prices in the surrounding area.  Now that's really beneficial for the community . . . :glare:

[ChocolateReignRemix]

I don't think it's fair to call out churches specifically on this.  For example, there is a ton of money flowing through non profit "trade associations" to highly paid lobbyists.  Would it make sense to somehow cap salaries paid by nonprofits?  Not sure about that.

 

Correct, and that is one of the arguments that would be used if religious tax exemptions as a whole were dropped.

 

[albeto.]

I think churches absolutely should lose tax exempt status. They don't work for the state, they don't represent the state, and so shouldn't be funded by the state. They work for the community according to subjective beliefs, including who should get help and what that help should be. Society should be pooling resources together (taxes) to help society based on reasons supported by evidence, not faith based claims, no strings attached, no sales pitch. The religious community wouldn't be prevented from helping society as they think best, they just wouldn't have public funds to do so.

[MotherGoose]

I believe in the fair tax which would do away with the idea of tax exemptions entirely for anything.

[Daria]

I think I could see taking away the tax benefits for those of us that contribute to a church.  I would actually be fine with that.  However, since we give money that has already been taxed to the church.  ( We give about 20 percent of our current income to our church.), then why should the church be taxed again for that?????  The money that pays our pastor's salary is from us: other taxpayers!!!!!  He already pays taxes on his salary, so in a way, the government is already getting paid twice.  So they get to take the money we have given and tax it yet again for buying sunday school materials and such...

 

You don't take an income tax deduction for the money you tithe?  Why not?

 

And why doesn't your church use your tax exempt status when they're purchasing Sunday school materials?

[Carol in Cal.]

I think churches absolutely should lose tax exempt status. They don't work for the state, they don't represent the state, and so shouldn't be funded by the state. They work for the community according to subjective beliefs, including who should get help and what that help should be. Society should be pooling resources together (taxes) to help society based on reasons supported by evidence, not faith based claims, no strings attached, no sales pitch. The religious community wouldn't be prevented from helping society as they think best, they just wouldn't have public funds to do so.

 

Your plan inevitably leads to totalitarianism, with its inevitably horrifying results.

[Carol in Cal.]

You don't take an income tax deduction for the money you tithe?  Why not?

 

 

Not to speak for her, but I know that a lot of people don't or can't itemize deductions and are still generous donors.  They can't take a tax deduction.

[marbel]

Churches are able to help people without having to go through a lot of red tape.  When I donate money to our diaconal fund, that money goes directly to helping people - from within the congregation and without - to buy food, pay their electric bill, fix a car so they can get to work...   things like that.  People don't have to wait for the slow grind of government to get help.  The church may just be a stop-gap while the individual waits for approval for government aid. 

 

I don't know where some people think churches get their money.  When someone says "the church" they mean "the people who donate to the church."   I'd bet that the number of megachurch pastors raking in the big bucks is small compared to the number of pastors living on a low salary - and donating some of that back to the church as their own tithing.  

 

But, as fewer people see the value of the church, this will probably change.  It may not be till after the churches are unable to help that people will realize how much they do. 

 

ETA: my church and all churches with which I am familiar do not give money with strings attached.  We don't operate like a time share, get your free weekend after listening to our spiel.

[regentrude]

 However, since we give money that has already been taxed to the church.  ( We give about 20 percent of our current income to our church.), then why should the church be taxed again for that?????  The money that pays our pastor's salary is from us: other taxpayers!!!!!  He already pays taxes on his salary, so in a way, the government is already getting paid twice.  So they get to take the money we have given and tax it yet again for buying sunday school materials and such...

 

If I hire a contractor or a piano teacher, I pay them from money I have left after my income has been taxed.

That does not mean the contractor or piano teacher do not have to pay income tax themselves.

One has nothing to do with the other.

 

 

[albeto.]

Your plan inevitably leads to totalitarianism, with its inevitably horrifying results.

 

How do you figure?

[regentrude]

Your plan inevitably leads to totalitarianism, with its inevitably horrifying results.

 

How do you make this leap???

 

[ChocolateReignRemix]

Your plan inevitably leads to totalitarianism, with its inevitably horrifying results.

 

I disagree with albeto, but I can't let this comment stand.

 

Name one totalitarian state in western Europe.

[albeto.]

Churches are able to help people without having to go through a lot of red tape.  When I donate money to our diaconal fund, that money goes directly to helping people - from within the congregation and without - to buy food, pay their electric bill, fix a car so they can get to work...   things like that.  People don't have to wait for the slow grind of government to get help.  The church may just be a stop-gap while the individual waits for approval for government aid. 

 

I don't know where some people think churches get their money.  When someone says "the church" they mean "the people who donate to the church."   I'd bet that the number of megachurch pastors raking in the big bucks is small compared to the number of pastors living on a low salary - and donating some of that back to the church as their own tithing.  

 

But, as fewer people see the value of the church, this will probably change.  It may not be till after the churches are unable to help that people will realize how much they do. 

 

ETA: my church and all churches with which I am familiar do not give money with strings attached.  We don't operate like a time share, get your free weekend after listening to our spiel.

 

When you donate to you diaconal fund, you contribute to services that exclude LGBT citizens in your community because faith based claims are acceptable. The state should not operate on claims accepted as true because of personal faith, and are held accountable to the public in a way a church does not have to be (indeed, cannot be). My taxes shouldn't be helping to support your diocese so the money your church collects from parishioners can be set aside for legal services (ie, priests and lobbyists for protecting religious discrimination). Your church should be collecting the money it needs to operate, and if wants to serve the public (and be aided through tax exemption), it should serve the entire public, not apply some kind of "tough love" philosophy in order to manipulate non parishioners' behaviors. 

[marbel]

When you donate to you diaconal fund, you contribute to services that exclude LGBT citizens in your community because faith based claims are acceptable. The state should not operate on claims accepted as true because of personal faith, and are held accountable to the public in a way a church does not have to be (indeed, cannot be). My taxes shouldn't be helping to support your diocese so the money your church collects from parishioners can be set aside for legal services (ie, priests and lobbyists for protecting religious discrimination). Your church should be collecting the money it needs to operate, and if wants to serve the public (and be aided through tax exemption), it should serve the entire public, not apply some kind of "tough love" philosophy in order to manipulate non parishioners' behaviors. 

 

Uh, no.  You simply don't know anything about my church.  You don't know what you are talking about. 

 

ETA: for one thing, we don't have priests or a diocese.  Not that that matters, really, to the larger point.  We don't have parishioners and we don't apply any sort of "tough love" philosophy to manipulate people - I don't even know what you are talking about here. 

[shinyhappypeople]

When you donate to you diaconal fund, you contribute to services that exclude LGBT citizens in your community because faith based claims are acceptable. The state should not operate on claims accepted as true because of personal faith, and are held accountable to the public in a way a church does not have to be (indeed, cannot be). My taxes shouldn't be helping to support your diocese so the money your church collects from parishioners can be set aside for legal services (ie, priests and lobbyists for protecting religious discrimination). Your church should be collecting the money it needs to operate, and if wants to serve the public (and be aided through tax exemption), it should serve the entire public, not apply some kind of "tough love" philosophy in order to manipulate non parishioners' behaviors. 

 

 

Your taxes aren't helping her diocese or any other church.  Churches aren't publicly funded.  They're funded by private donations. 

[ChocolateReignRemix]

Your taxes aren't helping her diocese or any other church.  Churches aren't publicly funded.  They're funded by private donations. 

 

Tax exempt status acts as a government subsidy.

[albeto.]

Uh, no.  You simply don't know anything about my church.  You don't know what you are talking about. 

 

ETA: for one thing, we don't have priests or a diocese.  Not that that matters, really, to the larger point.  We don't have parishioners and we don't apply any sort of "tough love" philosophy to manipulate people - I don't even know what you are talking about here. 

 

You said diocine, I assumed catholic church.

 

Mea culpa.

 

Nevertheless, my point remains. 

[Guest]

No, last I checked it just prevented then money being doubly taxed. That income is taxed when it is mine, from pay checks, before it ever hits the church. There are also upper limits on charitable deductions which we regularly exceed. It goes into the church budget, we divvy it up to run the church building, the programs and pay the the pastor. The bulk of it (pastor pay) is then spent out in the marketplace by their families.

 

That income is taxed at the outset, because it comes from a taxed individual. This just cuts down on the paperwork headache and a fair bit of red tape, but no significant revenue. Or maybe youren use thinking of churches bigger than mine, that aren't on shoestring budgets. That would be about 1.5% of them.

 

I'm not actually opposed to modifying or doing away with the tax exempt status, because it subjects us to Caesar's laws in a way that operating with no exempt status doesn't, but it has nothing to do with the pithy sums of money.

 

Let's raid governmental waste and tidy that up in, oh, the EPA or HUD, first, and when every penny is accounted for and fair value for the services rendered, with no inflation, private contract jockeying, or ridiculous salary increases for no accountable performance improvements, I will happily let you tax our little falling down church building and staff. Mmmkay?

[EmseB]

The idea that not taxing an entity somehow means the government is funding said entity is completely backwards.

[regentrude]

Churches aren't publicly funded.  They're funded by private donations. 

 

But private donations are not the only source of church funding. Churches own property and investments. Since they are tax exempt, they do not have to pay tax on investment income, which can be very large.

[mamajag]

When you donate to you diaconal fund, you contribute to services that exclude LGBT citizens in your community because faith based claims are acceptable. The state should not operate on claims accepted as true because of personal faith, and are held accountable to the public in a way a church does not have to be (indeed, cannot be). My taxes shouldn't be helping to support your diocese so the money your church collects from parishioners can be set aside for legal services (ie, priests and lobbyists for protecting religious discrimination). Your church should be collecting the money it needs to operate, and if wants to serve the public (and be aided through tax exemption), it should serve the entire public, not apply some kind of "tough love" philosophy in order to manipulate non parishioners' behaviors.

You have no idea what you are talking about. My church has never asked about sexual orientation before dispensing charity. No, we won't perform same sex marriages or hand out contraceptives or fund abortions, but when it comes to helping those in need there isn't a sin questionnaire. Food and basic medical care don't have a sexual orientation.

[regentrude]

The idea that not taxing an entity somehow means the government is funding said entity is completely backwards.

 

Society has agreed that all entities (people, businesses, organizations) that make money - by earned or unearned income - contribute to the common expense of running certain agreed upon functions of society, like law enforcement, schools, care for the needy.....

Exempting certain entities from this obligation means that fewer entities pay, and thus either every payer must shoulder a greater burden or that there are fewer funds available for these purposes.

 

"The government" is not funding anything. The taxpayers are.

 

[Guest]

But private donations are not the only source of church funding. Churches own property and investments. Since they are tax exempt, they do not have to pay tax on investment income, which can be very large.

What churches are you thinking of? I could see there being a cap on the deductions of all charities, religious or otherwise, if their holdings exceed a certain amount. But that wouldn't just his parishes, it would hit everyone. That's about the only way to modify that in a constitutionally justifiable way, given the legal precedent on this particular set of exemptions.

[Audrey]

Why should churches have carte blanche tax exempt status? Surely not all or even the majority of their income is used for charitable purposes?

 

IF they were to lose that status, I count it as a win for taxpayers everywhere. I don't see it happening because they are protected, but it wouldn't be terrible if it did.

 

There is frequent discussion of that issue in Canada as well.  The argument stems mostly from loss of revenue -- that it unfairly reduces the distribution of tax resources.  The same argument is used for tax exemptions for other organizations and certain businesses, though, so the issue, as a point of discussion, isn't that churches, specifically,  shouldn't be tax exempt, but that no business should be tax exempt. 

 

I tend to agree that everyone should be paying their fair share, and I don't agree with tax exemptions on the grounds that it goes against the idea of fair distribution. 

[marbel]

You said diocine, I assumed catholic church.

 

Mea culpa.

 

Nevertheless, my point remains. 

 

I said "diaconal" which is related to deacons.  Nothing to do with diocese.

 

But your point doesn't remain. Your point was that my church tries to manipulate people by withholding help to certain groups of people.   They don't.   People walk into the church asking for help.  They are given help - to the extent we have funds, to help them. We are a small church and don't have buckets of money; we don't have the space to have a food bank, etc.  But we don't quiz people to see if they are suitable for our help. We just try to help them.  

 

I doubt my little church is unique in that regard. 

[mommaduck]

Disagree.  Churches perform many community services so that taxpayers don't have to do it themselves.  This should be encouraged as a matter of public policy. 

 

This depends upon where you live and what you consider community services. I've seen churches that actually did do services within the broader community. I currently live where churches will not even look at you if you aren't a member. The local United Way just had to close up because of this attitude.

[Audrey]

Ok, but I buy a car part and that goes into the business so that ABC Auto parts makes money off of that.

 

A church is GIVEN money to be used as the membership sees fit. We use the money not to make a profit but to serve others and disciple others.   Is it really a business??  

 

A non-profit business is still a business.  They are subject to different tax laws, but not tax exempt (here, at least). 

[Guest]

I said "diaconal" which is related to deacons. Nothing to do with diocese.

 

But your point doesn't remain. Your point was that my church tries to manipulate people by withholding help to certain groups of people. They don't. People walk into the church asking for help. They are given help - to the extent we have funds, to help them. We are a small church and don't have buckets of money; we don't have the space to have a food bank, etc. But we don't quiz people to see if they are suitable for our help. We just try to help them.

 

I doubt my little church is unique in that regard.

Hey! I learned a new word!

[regentrude]

What churches are you thinking of? I could see there being a cap on the deductions of all charities, religious or otherwise, if their holdings exceed a certain amount. But that wouldn't just his parishes, it would hit everyone. That's about the only way to modify that in a constitutionally justifiable way, given the legal precedent on this particular set of exemptions.

 

 

You would be talking about a megachurch.  I would say that 90 percent of the churches just have bank accounts that right now are not earning squat.

 

We are not talking tiny amounts of money. I spent just a few minutes online looking at religious foundations. Just to give a single example (without meaning to single out a specific church or area - it's simply one of the first I came across and serves well to illustrate my point):

The Baptist Foundation of Texas is a tax exempt 501©(3) with assets exceeding $1.5 billion and a 2013 net income of over $90 million.(http://www.bftx.org/wp-content/uploads/2014/12/AnnualReport2013.pdf)

There are plenty of similar organizations which are religiously affiliated and enjoy tax exempt status. Those organizations manage funds for member churches.

[Guest]

Oh believe me, compared to the waste inside the government, itself, and among its contracts, that is positively pithy.

 

I work in and with a state government, even inside our budgets it is amazing the financial issues and lack of accountability. They raise license fees and try to demand income tax increases while millions swirl down a black hole into the pockets of a few individuals and their groups, because of bad accounting and legal loopholes.

 

It is frustrating and difficult to deal with, and the revenue there far exceeds the total sum available from taxing churches in this state. In fact, knowing the governmental number from the last Department of Administration report I was given, I'd conservatively say it is an order of magnitude higher than what would be gained from taxing religious exempt organizations.

 

My state isn't unique, and the Feds are worse.

[regentrude]

Oh believe me, compared to the waste inside the government, itself, and among its contracts, that is positively pithy.

 

I agree that there is plenty of waste in government contracts, particularly defense. 

I was commenting on statements that churches subsist on donations and don't earn any money.

[Guest]

I agree that there is plenty of waste in government contracts, particularly defense.

I was commenting on statements that churches subsist on donations and don't earn any money.

When every single exempt organization is taxed on all salaries, investments, and holdings, I'll support religious institutions having the same done. Not a day sooner.

[mamajag]

This depends upon where you live and what you consider community services. I've seen churches that actually did do services within the broader community. I currently live where churches will not even look at you if you aren't a member. The local United Way just had to close up because of this attitude.

Here it is the opposite. People became so used to the Catholic Church here being behind many of the charitable organizations that even nonmembers would donate as things were so well managed. The United Way left because there was no need for them as the interfaith community had things locked down. We don't care what your life situation is. We will help however we can without violating our conscience. We have a very high population of LGBT individuals in this area. We provide food, housing, utility, medical care, and even repair cars. We don't make people sit through a spiel, though people may hear "God bless you" and "We will pray for you" because we do genuinely want the best for the people we help.

 

And yes, I've met Christian LGBT people new to the area who were looking for a friendly congregation. We are able to point them in the right direction with that as well.

[Tanaqui]

Putting aside the matter of whether or not churches should be tax-exempt, there are rules they're supposed to follow in order to maintain their tax-exempt status. In particular, they're not supposed to get involved in partisan politics. (All this means is that they can't endorse this candidate or that candidate. They can still do things like tell their congregants that abortion or gay marriage or whatever is wrong.)

 

Churches routinely get away with violating that rule, and in a big way, but even when it's brought to the attention of the IRS, they completely ignore it.

 

Can you imagine the IRS ignoring you if you broke the rules? Yeah, me either.

[bolt.]

In my opinion Churches have non-profit tax status because they are a collective/co-operative group that pools money but does not generate a profit.

 

It doesn't matter that they are religious, or charitable, or helpful, or anything. There can be a non-profit group that studies ants together and pays a full time ant-watcher for her time and rented video equipment. Nobody cares if it's a "good cause" that benefits anyone outside of the willing associates of the group... All that matters is that profit is not occurring, therefore the people can pool their money for free before paying their employees (and providing for associated income taxes). It's pretty simple to be that kind of tax-exempt organization.

 

To be exempt from property taxes, or to be able to issue charitable receipts requires some type of defensible do-gooding, but, really... Simply being a group that listens to each other's woes, brings soup to one another when sick, and encourages one another to be law abiding, stable, tax-paying individuals... That saves the provincial social services more than enough money to justify some kind of status.

[KrissiK]

But private donations are not the only source of church funding. Churches own property and investments. Since they are tax exempt, they do not have to pay tax on investment income, which can be very large.

Our church owns investment property in the form of rental houses on the property we own and we do pay taxes on the investment income.

[Starr]

Should any non profits be tax exempt? Are we just picking on Christian churches? 

[Guest]

Should any non profits be tax exempt? Are we just picking on Christian churches?

Duh.

 

;)

[Tanaqui]

But what public money are they receiving from the government?????

 

They benefit from government money in many ways. For example, if they have a church bus for transport, they benefit from government-funded roads.

 

[Guest]

Did some more research on Texas Baptist Foundation. Churches can be a part of it. ( may be a case where 1,000 from 100 churches can be merged together..) But it also funds:

CLIENT TYPES

• Christian education

• Child and family services

• Healthcare facilities

• Retirement facilities

• Missions

• Student ministries

• Churches

• Associations

• Encampments

• Other state foundations

• Communication agencies

• International ministries

Those jerks! How dare they?!

 

:lol:

[Guest]

They benefit from government money in many ways. For example, if they have a church bus for transport, they benefit from government-funded roads.

 

You do realize maintenance funds are almost exclusively from the gas taxes, and those buses buy gas at Chevron just like everyone else, right?

[goldberry]

I would agree that most if not all tax exempt businesses should not be tax exempt, but should still be allowed to claim identifiable charitable activities they engage in as exempt.

 

The charitable acts should be supported and encouraged, but it should not apply to an entire business.  Others can argue that those charitable acts might be excluding certain individuals, but a tax break still seems less than what the government would have to pay to fund the charities themselves.  So it is more of a passive funding at a lesser amount, than an active funding at a higher amount.  Still seems like the state and society come out ahead, even if religious exclusions are allowed.

 

I would have no problem at all with religious organizations being taxed under those circumstances.