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Forget the VAT - Let's Tax Churches or Something
What a novel idea
When Obama admitted that, yes, a value-added tax might be in our future, the blogosphere erupted with rage. If you're like most of us, you are tired of the tax and spend, tax and spend mentality out of Washington. Americans of every political stripe are furious that the goons in Washington can't seem to stop racking up the bills on our national credit card. To the politicos, a national VAT makes perfect sense. To us, it sounds like so much more insanity. We're already being taxed to death. Adding yet another tax - and one that will impact every single consumer - seems like the last thing our economy needs. In the middle of all this rage going around, I've been noticing a new meme: Forget the VAT. Let's tax churches!
From the Yahoo! message boards, to the people commenting over at HotAir, to postings on Big Government and Huffington Post, people seem to think that the churches, synagogues, and mosques in America aren't shouldering their fair share of the tax burden. They're calling them "parasites," "greedy," "selfish," and "a cancer in our budget."
Yeah. It's come to this.
Does this sound greedy to you?
Thank God, I haven't found any evidence that the powers that be are floating a plan to start taxing churches. But to bring some realism to this emotional debate, let me set forth some facts. Let me tell you why I think that taxing churches would not only be unconstitutional, it would be a tragedy for America.
1.) Churches do not exist to turn a profit. Churches exist on the good will and free donations of people who are already paying taxes. To impose a tax on churches would be to tax the donors' money twice. How could this be fair? Should we also tax the Boy Scouts, the Lions Club, the Make a Wish Foundation? People take money that they could choose to spend on themselves and give it to a cause that is greater than them.
2.) According to statistics, most churches have only one fulltime staff member. That would be the pastor. And the pastors' median salaries are an absolutely enormous . . . $56,000. Now, that's the median income reported by PayScale. So it follows, then, that an awful lot of pastors make less. Like the pastor at my church, who makes about $14,000 per year. Gulp.
3.) Most churches have tiny, tiny budgets. According to Christianity Today, most churches' greatest expense is staff costs. If most churches spend an average of 38% of the budget on supporting their pastor (and most churches count the parsonage as part of their compensation), then where does that leave the average church budget? Again, my church, which is a typical small mainline congregation, reported a budget for the fiscal year 2009 of less than $40,000. Our pastor took a pay cut three years in a row.
4.) Churches give tremendous amounts of money away. According to this in-depth study of church trends by State of the Plate, a nonreligious study group, 31% of churches actually budgeted MORE for Benevolence in 2009 than in 2008. So while the market took a tumble, churches were spending more on helping people, giving to missionaries, building hospitals, supplying food banks, and other benevolent projects. How can we tax that?
5.) Churches are more efficient at bringing aid to where it belongs than governments are. That's why President Bush started the Faith-Based Initiative program (which President Obama has continued, by the way). According to statistics, money goes further when it's administered by churches over government agencies. I stand against the idea of Faith Based Initiatives on Constitutional and personal grounds. I think they're a bad idea. But still, they make you stop and think. If even the government recognizes that churches do a better job with money than they do, why should we tax them? Wouldn't that mean that for every dollar of tax money the government got from churches, they would have to spend more and then some to get the same results?
6.) Taxing churches would be unconstitutional because of the First Amendment protections in the U.S. Constitution. Liberals are fond of citing this principle when it suits them. But what about the other way? If the government were to start taxing churches, that would necessarily begin the long, slippery slope of government control and definition. For example, many churches have a 501 (c) (3) status because it lets their members claim donations as a tax deduction. Notice I said "many." Many, for whatever reason, do not. There is a large body of churches that refuse to incorporate because they feel it is giving Caesar more than his due. "No King but King Jesus!" is their cry. At the other end of the spectrum, many churches are little more than social clubs. So who is going to define what a church is? What a religion is? Would we then tax Christian Scientist reading rooms, Masonic lodges, and other semi-religious and religious bodies? That would be madness. The beauty of American freedom of religion is that the government has no power to define or control it. None. At. All. Whatever you tax, you define. Whatever you define, you control. Whatever does not fit that definition becomes illegal. What comes next? They've already had to deal with overzealous city planners trying to shut down private Bible studies in homes!
7.) Churches would have to close because they would not be able to afford taxes on their facilities. Why? Think about it. Even churches with huge buildings and great facilities were put together little bit by little bit, usually in fits and starts. The value of the church's facilities usually has little or nothing to do with the revenue stream of the church. Unlike a business, where if the income goes down, the business moves, churches make decisions using a different metric. Most church facilities are put together on years of sacrifice, scraping, volunteer work, the occasional company giving them a break, and trickles of small donations. There is no money value on that.
8.) What about tax deductions? Pastors pay income tax like everyone else. That means at least 38% of the budget of any church is already taxed, on average. Many people either neglect to claim their tax deductions or go to a non-tax-exempt church. Some, like the Amish, would rather be killed than pay any tax. So what are you going to do to make this system of taxation fair? I personally give 10% + of my PRETAX income to my church and other nonprofits. I do not claim any tax deduction for this, because Jesus says clearly not to let your right hand know what your left hand gives. So I can't in good conscience claim my tithes and offerings, even though my church is 501 (c) (3). I know that I am not alone in this. It's just a bad idea to get the IRS between people and their conscience.
9.) Churches are not a cash cow. People have a habit of looking at mega churches and lumping everyone in with that. This is just not realistic. Again, statistics show that most churches in America have an average attendance of less than 100. (Check that source for lots of thought-provoking material.) For every obnoxious Crystal Cathedral peddling God's Secrets to riches, there are 10,000 little churches that struggle just to pay the light bill.
Related thought: I personally know three pastors in my city who volunteer their fulltime service. All three of them hold down a job in the private sector to make a living while they serve as the fulltime pastor at their church. Two have children.
Should churches be taxed?
Should we tax churches?
The final assessment
To put it all together, taxing churches is a terrible idea. It would bring in scant revenue. It would force the government to begin defining churches. And it would take money away from communities right when it's needed the most. Please, let's not have the VAT or any extra taxation, especially on churches.