On Friday, November 22nd, a Federal judge in Wisconsin ruled that the ‘parsonage exemption’ which allowed churches to provide housing allowances to ministers tax free was a violation of the 1st amendment of the US Constitution. In the ruling the judge said since the tax exemption had no secular purpose and excluded the non-religious, it was unconstitutional. If the ruling holds up on appeal it would bring some fairness to the tax code for nonprofits and might make some of the televangelists, who own many homes, more accountable for their lavish spending.
With respect to the merits, I conclude that § 107(2) violates the establishment clause under the holding in Texas Monthly, Inc. v. Bullock, 489 U.S. 1 (1989), because the exemption provides a benefit to religious persons and no one else, even though doing so is not necessary to alleviate a special burden on religious exercise. This conclusion makes it unnecessary to consider plaintiffs’ equal protection argument.
In concluding that § 107(2) violates the Constitution, I acknowledge the benefit that the exemption provides to many ministers (and the churches that employ them) and the loss that may be felt if the exemption is withdrawn.
However, the significance of the benefit simply underscores the problem with the law, which is that it violates the well-established principle under the First Amendment that “[a]bsent the most unusual circumstances, one’s religion ought not affect one’s legal rights or duties or benefits.” Board of Education of Kiryas Joel Village School District v. Grumet, 512 U.S. 687, 715 (1994) (O’Connor, J., concurring in part and concurring in the judgment). Some might view a rule against preferential treatment as exhibiting hostility toward religion, but equality should never be mistaken for hostility.
If a statute imposed a tax solely against ministers (or granted an exemption to everyone except ministers) without a secular reason for doing so, that law would violate the Constitution just as § 107(2) does. Stated another way, if the government were free to grant discriminatory tax exemptions in favor of religion, then it would be free to impose discriminatory taxes against religion as well.
As the Friendly Atheist points out, the tax exemption had no secular purpose:
That section was written by Congressman Peter Mack (D-IL) in 1953. As was the case with several pieces of legislation from that era, Mack introduced it to stand against those “godless Communists”:
Certainly, in these times when we are being threatened by a godless and anti-religious world movement we should correct this discrimination against certain ministers of the gospel who are carrying on such a courageous fight against this. Certainly this is not too much to do for these people who are caring for our spiritual welfare.
It has always been about advancing religion and keep down atheism.
And now, Judge Crabb has righted the wrong.
One group of ministers who will be hurt by the ruling are those wealthy ministers, mostly televangelists who use donations to create and maintain a lavish lifestyle like Paul and Jan Crouch who run the Trinity Broadcasting Network. They don’t pay taxes on the funds used to buy and maintain their many homes.
The Los Angeles Times provided an overview of the case on Friday and focused on alleged self-dealing by the Crouches:
The lawsuit alleges that Paul Crouch Sr. obtained a $50-million Global Express luxury jet for his personal use through a “sham loan,” and that TBN funds paid for a $100,000 motor home for dogs owned by his wife, Janice Crouch, a network director.
The suit also alleges that TBN bought residences across the country for its directors under the pretext that they were “guest homes” or “church parsonages.” The properties include mansions used by the Crouch family in Newport Beach; side-by-side mansions in Windermere, Fla.; and homes in Nashville; Miami; and Irving, Texas, according to the suit.
The parsonage exemption is one of those religious privilege things that needs to be done away with. Hopefully the ruling made on Friday will stick.