Monday, July 02, 2007

Tax the Churches?

There's an interesting movement to "tax the churches" by removing religious institutions' 501(c)3 status. Here's a few sites if you're interested:

Daylight Atheism
Tax the Churches
Gainesville Humanists
Tax Churches

I've explained the basics of 501(c)3 in a previous post, but there are some details left out.

Yes, churches are "automatically" tax-exempt once they incorporate as a church on the federal level; however, state and local departments of taxation often require even religious organizations to file for 501(c)3 status to be exempt from their taxes. Incorporating as a "church" implies nonprofit status.

Yes, religious organizations are not required to submit for auditing, but this distinction is meant to avoid government intrusion in religious matters per the 1st amendment. The government does not decide what constitutes a religious organization other than that it must be incorporated as such. This exemption also applies to any nonprofit that has less than a $25,000 net profit annually, which means most nonprofits.

Yes, many church leaders are quite wealthy. So are many museum directors. Anyone remember the recent Smithsonian controversy over pay and perks? This is not church-specific nor does it exclude the organization itself from nonprofit status.

Yes, churches are excluded from certain laws, like anti-discrimination statutes, as are many nonprofit ideological organizations.

Yes, churches are forbidden from "political" activity of a sort in keeping with their nonprofit status although they are allowed to talk about "issues". Some people see this as a problem. (I'll assume because of the issue-based activism of the religious right.) However, remember that this applies to all ideologically-based nonprofits, many of which are "issue" organizations.

I'd go on, but I can see you nodding off. The problem is this: How do we maintain separation of church and state if we revoke nonprofit status for religious organizations but permit it for other ideological organizations that operate in the same way? We would then be making a determination based on religion, a violation of the 1st amendment. (According to the Supreme Court, atheist organizations would count as religious organizations for purposes of the law. Do we tax them as religions?)

Of course, it might work constitutionally if we also taxed these organizations and/or forbid them to talk about political issues:

Atheist Alliance International, American Atheists, PFLAG, The Human Rights Campaign, National Abortion and Reproductive Rights Action League, NAACP, Alliance for Justice, Free Speech Coalition, PETA, The Ayn Rand Institute, The Nature Conservancy, Workplace Fairness, etc.

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