Churches get tax exemptions yet some want to get more involved in politics without losing those exemptions. Tax exemptions were a way of promoting the separation of church and state by limiting the influence of government on religion – a government might try to influence what a church supports or teaches by using the tax rates for example. The cost of this protection also limits how involved a church can get in politics. Some on the religious right want to remove those limits of involvement and I think if they do get those restricts removed they should then pay taxes. It is only fair, right?
When people donate to religious groups, it’s tax-deductible. Churches don’t pay property taxes on their land or buildings. When they buy stuff, they don’t pay sales taxes. When they sell stuff at a profit, they don’t pay capital gains tax. If they spend less than they take in, they don’t pay corporate income taxes. Priests, ministers, rabbis and the like get “parsonage exemptions” that let them deduct mortgage payments, rent and other living expenses when they’re doing their income taxes. They also are the only group allowed to opt out of Social Security taxes (and benefits).”
Cragun et al estimate the total subsidy at $71 billion. That’s almost certainly a lowball, as they didn’t estimate the cost of a number of subsidies, like local income and property tax exemptions, the sales tax exemption, and — most importantly — the charitable deduction for religious given. Their estimate that religious groups own $600 billion in property is also probably low, since it leaves out property besides actual churches, mosques, etc.
The charitable deduction for all groups cost about $39 billion this year, according to the CBO, and given that 32 percent of those donations are to religious groups, getting rid of it just for them would raise about $12.5 billion. Add that in and you get a religious subsidy of about $83.5 billion.
For that $82.5 billion a year, religious groups have limits on how much they can be involved in politics:
In order to remain tax-exempt under 501(c)(3), churches must abide by strict guidelines that prohibit election activity. The Code states in relevant part that 501(c)(3) organizations cannot “participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.” I.R.C. Sec. 501(c)(3). Thus, as a 501(c)(3) organization, churches are strictly forbidden from supporting or opposing a candidate for public office. To do so jeopardizes their tax-exempt status. Churches cannot engage in any of the following activities under the federal tax law:
Cannot endorse or oppose candidates for public office
Cannot make any communication—either from the pulpit, in a newsletter, or church bulletin—which expressly advocates for the election or defeat of a candidate for public office
Cannot make expenditures on behalf of a candidate for public office or allow any of their resources to be used indirectly for political purposes (e.g., use their phones for a phone bank)
Cannot ask a candidate for public office to sign a pledge or other promise to support a particular issue
Cannot distribute partisan campaign literature
Cannot display political campaign signs on church property
Under current law, churches, as well as other 501(c)(3) organizations, may engage in nonpartisan campaign activities, primarily consisting of voter education. Thus, they may organize and coordinate nonpartisan get-out-the-vote and voter registration drives; sponsor nonpartisan candidate debates or forums, so long as all legally qualified candidates are invited to appear and wide spectrum of issues are covered; educate all candidates on issues of public interest; and create legislative scorecards or voter guides. All of these permissible activities must be done on a nonpartisan basis. A 501(c)(3) entity should not even tacitly express favor or disfavor of a particular candidate.
But some religious conservatives want to see those limits removed:
The report by officials of major denominations (including the Southern Baptist Convention and Assemblies of God) and large nonprofit organizations (including the Crusade for Christ and Esperanza, one of the country’s biggest Latino evangelical groups) argues that the ban chills free speech and violates the culture of people who see the weaving of faith and political expression as essential to their religious practice.
Forty-two percent of black Protestants and 37 percent of white evangelical Protestants say houses of worship should endorse candidates, according to the Pew Research Center. Among Americans overall, that figure has been in the 20s for a decade.
The report focuses on faith groups but would apply to secular 501c3 nonprofit organizations as well.
Although there is a ban on electioneering by religious groups, the IRS has not been enforcing the law. The Freedom from Religion group has sued the IRS for not doing their job:
The IRS had earlier filed a motion to dismiss the case, which the national foundation for atheists and agnostics had filed after the November elections last year. U.S. District Judge Lynn Adelman denied the motion on Monday, writing that the FFRF “has standing to seek an order requiring the IRS to treat religious organizations no more favorably than it treats the Foundation.”
Tax-exempt religious organizations, as well as other educational and charitable groups registered under 501(c)(3) of the federal tax code, are prohibited from partisan electioneering. The FFRF suit contends that the IRS is failing to enforce that restriction particularly when it comes to churches, which the group argues constitutes a violation of the establishment clause of the First Amendment. The suit also claims that the alleged IRS inaction undermines equal protection rights by giving preferential treatment to tax-exempt religious organizations over other 501(c)(3) groups, including the FFRF.
I think that if churches want to be free to be political – officially free – then they should give up their tax exemptions.
Fair is fair right? Why should they get to be involved in politics and get a free ride? Either they get the tax exemption and stay out of politics or they pay their taxes and have a say like the rest of us.