posted
I won't be participating in this discussion, but wanted to see what people thought.
Is it unconstitutional for the government to give Tax Exemption status to religious organizations?
Is it unconstitutional for the government to label monies given to religious organizations as charity donations and give a tax break for them?
Just curious as to people's opinions.
EDIT: I really don't know. That is why I asked. With other "church and state" issues on the table, I wondered how this wouldn't be a violation of such.
posted
I think it's an either/or thing. I think the current situation isn't very consistent, and that preferably churches ought to be regulated, tax-wise, the same as any non-profit, rather than the church itself being tax-exempt.
I don't have a very strong feeling, however, and wouldn't start up some movement to change the status quo.
posted
I met a guy who was a "priest" in a church, that wasn't really a church, they believed in nothing and were only a church on the groundas that they would recieve a tax break.
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posted
People are taxed when they make money. Corperations are actually semi-considered "people" under the law. That's the underlying theory anyways, that something like Coke is actually a single entity as a corporation. This is way over-simplified but it's still accurate as far as it goes. So when corporations make money they're taxed similar to people, the idea being that the end goal of the corporation is to make money, at least when it comes to dealings with money we can assume their desire is to have some as a result of their work. Charity and religions don't try to make money (or they aren't really supposed to), and that's what makes them different, is that the end goal is to give money and services to others, instead of keeping themselves well established and prosperous. There's no real reason why we should tax "selfish" money and not tax "unselfish" money, but on the other hand, I can't think of a good reason not to do it that way either. Of course I'm totally ignorant of the way the tax law is worded, so maybe it's explaind that way, but my feeling is, why should we tax non-profits? It just makes it harder for service to go on in the world.
posted
The thing is, Hobbes, right now churches are not regulated in the same way that other non-profits are. Personally, I think they should be.
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posted
They're not? I didn't know that. What sort of regulations are non-religious non-profits subject to that religious non-profits are not?
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posted
Tom, I don't think you're statement is very accurate. Churches are regulated under 501(c)(3) in the same way as most other charitable organizations.
Although there are certain exemptions from some of the rules for churches, these exemptions are usually applied to other types of exempt organizations as well. For example, the exemption from an annual information return applies to religious organizations as well as at least 8 other types of organizations, including black lung benefit trusts.
It's true that the exact mix of regulations applied to religious organizations does not likely apply to any other type of organization, but it's also true that the regulations, statutes, and caselaw probably mean no two types of exempt organizations are treated the same.
So while "right now churches are not regulated in the same way that other non-profits are" may be literally true, the same can be said for black lung trusts and likely every non-trivial identifiable type of non-profit group.
Is there some particular regulation that applies to most non-profits that doesn't apply to religious organizations that you'd like to see applied to them?
posted
I heard they should not be taxed unless they break some type of constitutionally protected right or get involved in politics.
Is it the catholic church that was forced to give contraceptive benefits to their welfare program employees? I don't know if I completely agree. By that logic, the LDS church may need to be taxed because they use tithed money to influence the political environment.
Maybe Mormons just use money to fight issues like gay marriage instead of endorsing a particular person. Bah, I am tired. I am trying to set up a home-network and have been up all night. Please excuse my spelling and rambling.
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posted
Let's consider things from a purely financial point of view.
Corporations are taxed on profit, that is, revenue minus expenses. Individuals are taxed on income earned and, when they're self-employed, can subtract their business expenses from their business revenue. If a corporation has a loss, that is, their expenses exceed their income, then they pay no taxes on the income. (That loss is generally carried over into subsequent years to offset against future profit.)
Churches and other non-profit organizations generally don't try to make money. If they don't make any money, ie there is no profit, then what is there to tax them on?
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quote:Is it the catholic church that was forced to give contraceptive benefits to their welfare program employees?
It was Catholic Charities in California. The law requiring the contraceptives exempts churches, but not religious organizations other than churches.
quote:Churches and other non-profit organizations generally don't try to make money. If they don't make any money, ie there is no profit, then what is there to tax them on?
It's not so much the taxes the churches would owe so much as the taxes the donors don't have to pay on their contributions. Suppose you have a 20% marginal tax rate and donate $2,000 to church each year. You pay none of the taxes that would amount to $400 on that $2,000. This means if you didn't make the contributions, you'd have paid $400 in tax and only have $1,600 of that money. From your perspective, you only "lose" $1,600, but the church gains $2,000.
posted
The LDS Church tries to make sure that they use non-tithing money for things that could be considered political.
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posted
A former premier of Quebec once said that if a corporation is paying taxes, they have a bad accountant.
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quote: Congress shall make no law respecting an establishment of religion
That's the whole of the constitution's statement on seperation of church and state. The way it has been interpreted has resulted in this discussion. To put it bluntly, the churches are not allowed to affect politics, and the government is not allowed to affect churches. Simple as that. As a result, taxation of churches would actually be the unconstitutional thing. What needs to happen is there needs to be examination into the establishment of religions to determine if they are real or not. That only to prevent the one man church tax break.
[ October 16, 2004, 01:16 PM: Message edited by: Boris ]
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posted
Um, no. You left out a very significant part: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof"
quote:To put it bluntly, the churches are not allowed to affect politics
This is also not mandated by the Constitution in any way, shape, or form. Many leading movements in American politics have had deep religious underpinnings. On the positive side, abolition of slavery and the civil rights movement were both advocated by religious groups. On the negative side, the white supremecist movement has a large religious base.
The threat to revoke tax exempt status is the only check on churchs' participation in politics.
I think I may have missed some of the backstory on this, but I think a church, like any "good corporation", should expend most of its intake before the end of the fiscal year so it shouldn't matter if they pay taxes or not.
Maybe some limited amount could be held in a tax deferred reserve. The LDS church does expect that growth will slow with the graying population (at least in the industrialized nations that contribute the bulk of donations).
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posted
Churches are also (generally) exempt from property taxes.
It seems to me that the money given churches by their congregations could be taxed on the front end (by not counting it as income on the part of the contributor) or at the back end, by taxing the church as if it was a business.
There's no doubt in my mind that some "churches" (especially televagelical ones) are merely moneymaking schemes, and should definitely be treated as a for-profit business. That said, the church of the subgenius (proudly) pays its taxes as a fully for-profit church.
Does anybody know anything about the history of how churches came to be tax-exempt in the first place? Was there such a thing as a "Non-profit corporation" when this issue first came up? Or did not-for-profits come into being as a result of a first amendment argument?
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I can't answer your question directly, but the justifications in the summary don't seem to require tax exemption for other non-profits.
I'll look into it more later if time allows; it's an interesting topic. Here's a summary from one source:
quote:In the U.S., property tax exemption for churches began in colonial days and continued with the birth of the new nation. In 1802, for instance, the Seventh Congress specifically exempted religious bodies from real estate taxes. On the state level, specific exemptions from property taxes for churches were established in Virginia in 1777, New York in 1799, and the city of Washington in 1802. "The exemptions [for churches have continued uninterrupted to the present day," Justice William 3. Brennan has said. ‘They are in force in all 50 states" (quoted by Leo Pfeffer in "The Special Constitutional Status of Religion," Taxation and the Free Exercise of Religion, edited by John Baker [Baptist Joint Committee on Public Affairs, 1978], p. 711).
posted
I've been thinking about this issue a little today, and it seems to me that one good reason to NOT worry about it is the effect that taxation of even donated funds to churches would have, most especially to poor communities. Taxation would do more to wipe out small, unestablished religions than anything. It seems to me that if the government were to not allow tax write-offs for donations, most religions that do not require donations would be hurt incredibly, if not destroyed. I would imagine that some people would tend to choose not to donate their money if they weren't certain that they would get some of it back. Greedy, yes, but that's human nature. I may be completely wrong here, and since I'm just using plain old logic, I think that taxing religious donations would result in only the big, established, organized religions staying around much longer. In my case, that doesn't bother me, since the LDS church would survive without much problem even with taxes. What worries me is those small, poor communities that don't have much for religion other than a small church with no large affiliations with any religion. Those would be the only churches really hurt by taxation. To me, I think it's better to just live and let live than to get all mad and fussy about how people without a religion are "subsidizing" the churches while people who donate to those churches get tax breaks. Sorry if that seems rude or mean or something, but that's the truth. Just because life isn't always fair doesn't mean we always have to complain about what keeps it from being fair. If I offend anyone by saying that, sorry, but that's how I feel about this.
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