Why Tax Exemptions for Religious Institutions Should Continue

Since Time is saying “Now’s the Time to End Tax Exemptions for Religious Institutions,” it’s important we understand why our government has not taxed religious institutions in the past. I recently explained that one reason for non-profit tax exemptions is that “the power to tax implies the power to destroy” (McCullough v. Maryland, 1816), and our government has not been given the power to govern religion. But there’s more to it than that.

Al Mohler discussed this issue on Monday’s episode of his podcast, beginning with the charge that the government is wrongly “subsidizing” religion through tax exemptions. Not only are tax exemptions not logically a subsidy (after all, it’s not the government’s money the churches are keeping), they’re also not legally a subsidy, as Dr. Mohler explained. From the podcast:

The key statement on these issues was made by the Supreme Court of the United States in 1970, in the case Walz versus Tax Commission of the City of New York; it was a stunning 8-1 decision. Writing for the majority, Chief Justice Warren Burger made very clear that a tax exemption is not a subsidy; that was affirmed by other justices in concurring opinions. A subsidy would be the transfer of tax money to institutions. That’s not what’s going on here…. Rather, the tax exemption is granted with respect to institutions the government does not feel that it has the right to tax on the one hand and on the other hand, institutions that it believes are essential to the Commonwealth and to the commonweal, to the well-functioning of society.

It’s in our best interest to prevent our limited government from taking money away from organizations that are using that money to build up our communities. Local organizations know the people they’re helping, they can give more personalized care with less bureaucratic waste, and those who receive the help do so in the context of relationship, which means gratitude and accountability. Whenever care can be given by the people closest to those who need help, that should be the preferred method of helping, not government: 

One [of] the most basic principles that is deeply embedded in American jurisprudence is the fact that the government cannot do everything. This gets to the fact that mediating institutions including churches, synagogues, temples and other religious institutions fulfill a function the government actually cannot fulfill so well. 

And the value added to communities by churches isn’t merely material help (such as feeding the poor); it’s also intangible goods, such as spiritual support and the strengthening of interpersonal relationships within the community, which works to reinforce good character, support marriages, raise good citizens, increase general happiness, and more. If you doubt the value churches bring to communities, you need only look at the aftermath of recent tragic events in Baltimore and Charleston. What made the difference between rioting and mass hymn singing? The churches. The difference they made and will continue to make in Charleston is the kind of invaluable good the government cannot provide. As Joe Carter said, “The government doesn’t “subsidize” charitable non-profits; charitable non-profits subsidize society.”

There’s yet another reason why the government does not take money from churches:

Again, in his majority opinion Chief Justice Burger wrote,

“The grant of a tax exemption is not sponsorship since the government does not transfer part of its revenue to churches but simply abstains from demanding that the church support the state.”

That is extremely important language. Here Chief Justice Burger was affirming that the most basic fundamental and important reason that the government does not tax churches is that by taxation the church would be required to support the state. Members of synagogues, temples and churches are already taxpaying citizens. It would be a different thing altogether to require the synagogue, the temple or the church actually to fund and support the state. Those who supposedly believe in a separation of church and state have to recognize the dangers inherent in the proposal that the government tax the church….

Chief Justice Burger and Justice Brennan in writing their opinions in this case understood that taxing churches and religious institutions would inevitably put those churches and institutions in the position of funding the government and would put the state in the position of entangling itself in religious organizations and churches. [Emphasis added.]

Read the rest of what Dr. Mohler had to say here.

The government is prevented from controlling churches by the Constitution. This means it does not do so through taxation. Further, it would not be in our interest as a society for the government to take money away from the work churches do in their communities. The government simply cannot replace it.

Some Christians say they wish churches would lose their tax-exempt status so they could have full free speech rights (i.e., the right to comment on political candidates). But giving up all of the above in exchange for the ability to endorse a candidate seems like a poor trade to me. 

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Amy K. Hall

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