Barbara Katz Why Do We Give Churches Tax Exemptions, Barbara Katz, The Gainesville Sun, July 10, 2009

Barbara Katz: Why Do We Give Churches Tax Exemptions?

By Barbara Katz
The Gainesville Sun
July 10, 2009

http://www.gainesville.com/article/20090709/NEWS/907099888/-1/NEWS10?Title=Barbara-Katz-Why-do-we-give-churches-tax-exemptions-

The hateful anti-Islam sign on the lawn of the Dove World Outreach Church highlights the larger issue that we as taxpayers subsidize these unaccountable “businesses” that do not have to pay taxes. How is a church that offers counseling to a parishioner who pays church dues different than a psychologist who charges fees for services or a church that offers music, dance and wine to those who pay dues different from a bar or disco that pay taxes?

When the City of Gainesville recently tried to require that houses of worship merely pay a small fee for fire services, the city commission was flooded with ministers and church members and the city commissioners all caved in and abandoned the modest and fair proposal. Given that they do not pay for fire services, I do not think the fire department should respond to calls from churches. The argument that the ministers gave is that some churches engage in altruistic endeavors which help the greater community such as hosting homeless families through the Interfaith Hospitality Network. Only a very small minority of churches participate in IHN. Most churches in Gainesville are insular and some boast lavish salaries for their minister. Some ministers have their own airplanes.

I agree that if churches and other religious bodies engage in charitable work which benefits the community, we do have an interest in supporting such endeavors with various tax exemptions. This is the sound basis for tax exemptions for non-profit organizations, whose activities and finances are subject to IRS audit and public scrutiny. In the case of religious organizations, however, the books are closed. Non-church groups receiving tax exemptions must annually file a detailed 990 statement itemizing where the money has gone. The IRS automatically waives the 990 requirement for churches.

Religious organizations can and do take great advantage of their tax-free status. Many amass great wealth and vast media empires, all of it off the tax rolls. Worse, many religious organizations can and do espouse doctrines of intolerance and hatred, filter funds to foreign enemies, and cause far more harm than good in their communities. The anti-Islam sign displayed at the Dove Outreach church is a good example of espousing hatred.

In Hardenburgh, New York several years ago, 235 of the 239 property owners in that town were granted religious tax exemption because the properties of the owners were made branches of the mail-order "Universal Life Church." In Wisconsin, hotels, pay parking lots, farms, and communion wafer bakeries are among the church holdings that are tax exempt. And the monumental moral corruption of the Catholic Church as evidenced by the many sexual abuse scandals is particularly galling when one contemplates the vast (and covert) wealth of that particular enterprise.

It's a racket, and it costs taxpayers even more money to monitor, uncover and fight the abuse it invites, none of which would be necessary if such unenforceable loopholes in our tax code never existed. Ultra-conservative Justice Rehnquist wrote in the 8-3 1983 Supreme Court ruling (Regan v. Taxation with Representation): "Both tax exemptions and tax deductibility are a form of subsidy that is administered through the tax system. A tax exemption has much the same effect as a cash grant to the organization of the amount of tax it would have to pay on its income."

James Madison, Benjamin Franklin, James Garfield and Ulysses Grant all opposed the exemption. Grant said to Congress, ""I would also call your attention to the importance of correcting an evil that, if permitted to continue, will probably lead to great trouble in our land... it is the accumulation of vast amounts of untaxed church property."

The estimated value of untaxed church properties in the U.S. is $500 billion. Undeniably, residents pay higher taxes than they would if religious institutions paid their share on this vast sum. Churches use city services, rely on good streets, are protected by the police, and would expect the fire department to respond to a blaze on church property. Yet churches do not contribute to the city accounts from which funds are drawn to pay for those services. Everyone else has to pay more to make up the difference. Across the nation tax authorities report that exemptions for property and buildings used for religious purposes contribute significantly to and are often the biggest cause of lost revenue.

Churches are big businesses, but also big political machines. The pulpit has become a central point for political rallies. Churches have thrown off the pretense of being non-political. States and localities can no longer subsidize churches and other religious organizations on the backs of ordinary taxpayers. The next time Congress is looking for an extra couple billion to finance a war, tell them to look no further than an income tax on religious payroll. Better yet, tell them today, and let them know you intend to vote accordingly.