The press to tax the church has begun

What would your government do for 83 billion dollars?

Ryan T. Cragan is a professor of sociology of religion at the University of Tampa.  Working with two-research assistants he set out to discover how much money governments are leaving on the table by not taxing churches.  Cragan is no disinterested academic; his findings were reported in Free Inquiry, a publication of the Council for Secular Humanism.   I believe that his methodology is flawed and his predictions are askew, that being said, he concluded that if churches were taxed it would produce $83,000,000,000 for governmental use.  Which brings to mind our question of the day, “What would your government do for 83 billion dollars?”

Would the government tax churches for that kind of money?  I will leave that answer up to you.

The call to tax churches has already begun.  Matt Yglesias is a Harvard graduate and a prolific writer on things philosophical and political.  He is one of a growing number of people who believe that it is time to end tax exemptions for churches.  Yglesias argues for the ending of tax exemptions because if churches were not tax exempt they would be free to express their opinions regarding the personalities in elections.  He also argues that a church’s larger and enhanced facilities will not make it more effective in soul winning.  We may disagree with Yglesias’s conclusions, but we need to be aware that he represents a growing movement to end the tax-exempt status for religious organizations in America.

I will not attempt to debunk the validity of the arguments for ending tax-exempt status.  I believe the debate over religious tax exemptions is coming fast.  This is not alarmism. Alarmism predicts a dire future and proposes a course of action, which will be effective only if that dire future comes about, but otherwise might be harmful.  Prudence is to see a possible dire future and then follow a course of action, which will be helpful whether the dire future occurs or not.   

Examples: Alarmism: The US economy will collapse so buy (from me) hard assets of gold and silver, stock pile food and ammo and hide in the mountains of Utah.
Prudence:  The US economy may collapse so payoff your debts, diversify your holdings, and build strong network of friends that can mutually help each other in difficult times.   

I will not ask you to contribute to my blog to get the ‘message out’ nor send you pleas desperate for help for a political candidate that will fight to maintain tax exemptions for churches.  What I will attempt to do is:

a.     Share the possible places where a church’s tax exempt status could be effected.

b.     Discuss why this move is even thinkable.

c.      Look at the places from which this action might be possible.

d.     Discuss how actions can be taken that will be beneficial whether tax-exempt status is lost or not.

I believe the move for the revocation of tax exempt status has already begun in small ways.  Some years ago I had a conversation with a lawyer that was representing a church in a suit against the county government.  The church had purchased an empty shopping center to use for its operations.  Just before closing, the county tried to stop the sale using eminent domain laws.  The county argued that even though they had no use for the property and were not going to buy the property, they could prevent the church from ownership because of the taxes that would be paid if a retailer purchased the property.  The county believed that gave them a compelling reason to prevent the church’s ownership of the shopping center.  Thankfully, the church won its case.

But the slow creep to tax churches occurs in other ways.  I served a church that considered a small building addition, about 2,500 square feet.  The city government was going to extract close to $100K dollars before we ever turned the first spade of dirt.  These were not building permits, but things such as purchasing trees for the city arborist, donating land for a mass transit/bus stop and building the bus stop shelter.  By the way, there was no bus service on Sundays.  Building sidewalks that went from no where to no where.  On another occasion the city levied a Fire Service Fee on all churches, assessed whether there was ever a fire or not.  Taxation has begun, but only in minor ways.

I believe there are three places where the tax burden could fall on the church.

·      First of all, churches could lose and end up paying property taxes.  According to Cragan, the removal of property tax exemption would result in an additional 26.6 billion dollars in revenue.  The last church I served as pastor had a building worth about $750,000 in a county with a tax rate of 28.5 mil.  The property tax would be annual $21,375.

·      Second, we might see a straight tax on church’s offerings.  Suppose the IRS imposed an adjusted tax rate based on your annual donations, somewhere between 10% and 39.6%, as they do for households.   The result would likely negatively effect giving as will as drain resources.

·      Third, there might be the loss of tax deductions for those giving to churches.  According to the Congressional Business Office charitable giving to all groups costs about $39 billion each year.  The CBO also states that 32% of charitable giving goes to religious organizations.  So, in theory, at least taking the tax deduction for religious giving would amount to about $12.5 billion for use by the government.

 Simply put, the status quo for churches would not survive the church loosing its tax-exempt status.  However, I believe there is a tremendous opportunity for the church in these chaotic possibilities.

Next week we will look at how we got to the place in America where the thought of taxing churches is even being considered.