Occasionally I hear people condemning the tax-exempt status of churches, on the grounds that the tax exemptions — both the exemptions from property and income taxes, and the tax deductions given to people who contribute to the church — are subsidies to the churches. This is especially common when a church says or does something bad; people ask, “Why are we subsidizing them?”
The answer is, generally speaking, that we “subsidize” a wide range of nonprofit entities this way, including churches. Private universities, private schools, public radio stations, advocacy groups (except those branches of advocacy groups that participate in electoral campaigns or do a substantial amount of lobbying), hospitals, soup kitchens, and so on all get tax-exempt status. Churches get slightly preferential treatment in certain circumstances (and I generally oppose such preferential treatment). But the bulk of the tax treatment that they get is the same treatment that is given to other nonprofit organizations, including speaking organizations such as universities, schools, and advocacy groups. And of course that tax treatment is likewise available to advocacy groups that advocate for bad ideas, just as it’s available to churches that teach bad doctrines.
Moreover, excluding churches from such generally available tax-exempt treatment would itself likely be unconstitutional, so long as similar secular groups keep getting such treatment. (It’s conceivable, under a very broad reading of Locke v. Davey, that such discrimination against religious institutions would be constitutionally permissible, though certainly not constitutionally mandated. But I doubt that Locke v. Davey would or should be read that way, especially given that case’s reliance on tradition, and the fact that here tradition cuts in favor of allowing tax exemptions.)
So if you oppose all tax exemptions for nonprofits (and for contributions to nonprofits), or for all nonprofits that specialize in speaking — such as advocacy groups, schools, universities, public radio stations, and churches — then churches would naturally be included in your opposition. But so long as charitable nonprofits, under a very generous standard of what constitutes a suitable charitable purpose, are tax-exempt, the same would cover churches.
I should note that there’s a separate debate about whether tax exemptions should be treated as tantamount to subsidies. But for purposes of this post, I assume that exemptions from generally imposed taxes are indeed subsidies — and there is indeed good economic reason to treat them this way — since I am arguing that even if the exemptions are a form of subsidy, churches should be as entitled to them as are other nonprofits.
BZ says:
Well, I agree with most of your analysis but, as one who represents churches in tax and litigation matters, a couple of points:
1) There is a distinction between religious institutions (which can include lots of organizations) and actual churches. Religious institutions are treated like all other exempt organizations; churches are treated differently, from organization, recognition, to examinations (exempt-org-speak for audits) and advocacy. The difference is constitutional.
2) The concept of “tax expenditures” is at the heart of the “subsidy” debate. “Tax expenditures” are the forbearance of government from taking what they might otherwise as taxes or fees. As might be surmised, the idea springs from those who believe that what the government could tax is the government’s money, whether or not it is, in fact, taxed. Thus, a choice not to tax it is the equivalent of the government choosing to spend it. The idea is hardly mainstream and is of relatively recent origin, but it is deeply engrained in Washington officials’ collective psyches, less so in the States and on the local levels, where churches tend to be more active. I see a distinction between “subsidies” as you describe them above, and these “expenditures.”
Thus, the simple answer to your point is not just fairness amongst equivalent organizations, as they are not necessarily equivalent. Churches have extensive constitutional baggage which similarly-situated exempt organizations do not, and which governments generally respect. The other answer to your question is that they are not subsidies at all; they are simply governmental decisions that taking the money would be more trouble than it’s worth.
October 28, 2009, 5:39 pmNew Pseudonym says:
I find it odd that those who insist there is a wall of separation between church and state that prohibits the church from doing anything the state claims at its own are those most supporting the practice of the state taking things from the church.
October 28, 2009, 5:50 pmSteve says:
I thought we exempted churches, at least in part, to avoid excessive entanglement.
October 28, 2009, 5:56 pmVader says:
New Pseudonym is on the right track. The power to tax is the power to control. The churches have a special constitutional status as sources of societal authority outside the government. The temptation for government to try to control the churches is as great as the temptation for churches to try to control the government, and should be equally resisted. Making churches tax exempt is an important safeguard in this direction.
October 28, 2009, 5:59 pmDilan Esper says:
As might be surmised, the idea springs from those who believe that what the government could tax is the government’s money, whether or not it is, in fact, taxed. Thus, a choice not to tax it is the equivalent of the government choosing to spend it.
That really isn’t it, at all, though it is what conservatives and libertarians tell themselves.
Rather, it’s that a tax cut and a government spending program are economically identical except for transaction costs. In other words, if the government instead collected taxes from every enterprise and then sent a check to qualifying nonprofits, how would that “spending” be any different from a tax exemption?
October 28, 2009, 6:11 pmRandy says:
Much as I dislike many churches (and yet admire others), I agree that they should remain exempt. We can always find examples of sham churches or abuses of one kind or another. But the answer isn’t to shut them down, or even to tax them. The answer is more speech, and hopefully, in the marketplace of ideas, the best ones win.
Now, if a church puts itself into a political debate, such as the archdiocease of Guam seems to be doing by opposing hate crimes laws for gays, then there might be an issue. Again, I think that they should give given some latitude to speak their minds, but to advocate how a person should vote is crossing the line.
October 28, 2009, 6:12 pmTheBadness says:
Essentially, my only objection to taxing churches is figuring out how to go about doing so in the first place. I don’t think that the comparison to nonprofits is so obvious; churches often do engage in activities like those we encourage by granting tax-exempt nonprofit status, but they are not required to do so.
Rather, church income just doesn’t look like what the Code is aimed at taxing. Just accounting for and characterizing tithes, small donations, what have you, would be a nightmare for church and IRS auditor alike.
October 28, 2009, 6:13 pmJiffy says:
No it doesn’t. It stems from the observation that if the government is taxing, for example, income at a particular rate, exemption from that tax if the income is used for a particular purpose is the functional equivalent of a government subsidy of that expenditure. That’s why the observation is sometimes made that allowing deduction for mortgage interest constitutes a “subsidy” but not that lowering the marginal tax rate is a subsidy.
October 28, 2009, 6:16 pmSbard says:
In a related matter, how can the many laws that prohibit certain activities within a given distance of a church be Constitutionally valid? Why can a church be more entitled to not have an adult book store next to it than any other particular organization or individual?
October 28, 2009, 6:23 pmGuest12345 says:
Wait, I thought gays were against the hate crime law that went to Obama today. Weren’t they just marching on the mall for equality?
Additionally, I think it’s interesting that a non-church, non-profit, tax exempt organization is allowed to be active politically, but a church isn’t allowed to be active politically. Seems a bit unequal.
October 28, 2009, 6:41 pmGuest14 says:
It’s not unequal at all. If the church members wanted to form a normal non-profit advocacy group subject to all the normal rules, they could. They don’t want to, though, because the rules governing churches are altogether spiffier.
October 28, 2009, 6:49 pmFrater Plotter says:
One question is whether churches should really be considered charitable organizations, or whether they should be considered a sort of social club. Social clubs can also be tax-exempt — under
501(c)(7)rather than501(c)(3).501(c)(7)organizations are permitted to engage in political lobbying and campaigning, unlike501(c)(3)organizations … but whatever money they spend on political advocacy is taxable and not tax-deductible for members.It’s true that many churches do spend money on charitable activities, such as alms for the poor. But the basic function of a church is to hold worship services, which is not itself a charitable function; it’s a special form of social activity for the worshipers.
October 28, 2009, 6:49 pmGuest12345 says:
There is probably a word to describe someone who cannot recognize the difference between the government taking value I have created, and the government giving value taken from someone else. Not sure what it is though.
October 28, 2009, 6:50 pmDilan Esper says:
By the way, on the merits, I agree with Professor Volokh that there is good reason for the tax exemption. I also agree with Guest12345 that churches that wish to be active politically should have every right to do so. That said, however, I would say to believers that this is a two way street– you don’t get to have your church pushing for laws that implement what you think to be God’s mandate while on the other hand getting to claim that anyone who criticizes your beliefs or contends that they are without intellectual or moral foundation is a bigot.
October 28, 2009, 6:57 pmShelbyC says:
Well, they could also impose a surtax on everybody named Dilan Esper, and then send you a check for the same amount. The difference lies in whether you call the fact that churches are not taxed an “exemption” or whether they’re just not taxed.
October 28, 2009, 7:07 pmArmyDad says:
It’s not just the congregation that gets a tax break – it’s also the clergy.
I love it when our rabbi, a highly partisan and highly-paid Democrat, complains about having to pay SECA tax rather than FICA tax. At the same time, he doesn’t complain about how a third of his compensation is effectively excluded from income taxation through the parsonage exclusion. Taxes are great except when he has to pay it.
October 28, 2009, 7:08 pmGuest14 says:
“Practical”
October 28, 2009, 7:08 pmloki13 says:
A rational human being who understands economics?
This isn’t a hard concept for even libertarians to understand.
Let us assume that you have a government, even a limited government that only provides the bare necessities (like a small defensive army, police services, and whatever you have you believe is necessary).
You have to fund that in some way. People might call this a “tax”.
Now if there is some “tax” of general applicability that a subset does not pay, then that group is being subsidized.
As Dilan pointed out, you can look at it in one of two ways:
Government (or, as you prefer, gummint) taxes everyone $5 (flat tax!).
But group A is sent a check for $3. B-Z get nothing. A is “subsidzed”.
Gummint taxes everyone $5, but while B-Z pay the full rate, A does not have to pay $3, and only pays $2. A is “subsidized”.
If you don’t understand that, I’m not sure what would help you.
October 28, 2009, 7:11 pmB.D. says:
Of course churches enjoy market-distorting tax subsidies. It is the exemption from property taxes, in particular, that promotes the most indefensible economic inefficiencies by entrenching many church properties to their less-than-most-productive uses.
In a sense, religion is a free market in this country. People are free to choose their church or religious denomination based on its “product”—its pastor, its liturgy, its theology, the physical beauty of its churches. The government has generally refrained from intruding into this market, thanks to the First Amendment. (Though examples to the contrary abound.) So why intrude with this kind of tax exemption and make churches less sensitive to market forces? By doing so, governments are expressing their clear preference that religion be an institution in our communities (and redistributing income accordingly since nothing in life is free). Though this obviously does not violate the establishment clause, it seems to run contrary to the spirit of church-state separation.
This reminds me of how state capital cities routinely fight with their state governments over the issue of tax exemptions for state property. The crux of their complaint is that state government property is often located in desirable areas, near downtown, where the cities could otherwise collect substantial tax revenue. Another issue is whether the state government benefits from any city services. What a headache.
October 28, 2009, 7:12 pmtraveler496 says:
1) Taxability of churches should be determined without reference to the fact that churches are religious organizations, and independently of any judgement as to churches’ societal value. Since I don’t know the principles distinguishing taxable from non-taxable nonprofits, I can’t tell whether this has in fact occurred.
2) Vader said “The power to tax is the power to control.” But it is really the power to threaten to tax that is more controlling* (apologies to Nimzovitch:-). For this reason, I don’t find the “governmental control” objection to church taxation compelling (almost the contrary).
*as apparently illustrated in spirit by Randy two comments further down: “Now, if a [currently tax exempt --trav] church puts itself into a political debate, such as the archdiocease of Guam seems to be doing by opposing hate crimes laws for gays, then there might be an issue.”
October 28, 2009, 7:14 pmShelbyC says:
Wait, I don’t! By your argument, everybody except the guy that pays the most taxes is being “subsidized”. So being “subsidized” doesn’t mean much. And when you get into taxation of ficticious entities like churches… watch out
October 28, 2009, 7:16 pmGuest12345 says:
I understand the math, but it’s not just a matter of math. The difference between the government not taking $5 from me and the government giving me $5 is that in the first case I have to have originally acquired the $5 somehow. In the second case I’ll have $5 regardless. That’s a pretty big damned difference.
October 28, 2009, 7:20 pmDilan Esper says:
I understand the math, but it’s not just a matter of math. The difference between the government not taking $5 from me and the government giving me $5 is that in the first case I have to have originally acquired the $5 somehow. In the second case I’ll have $5 regardless. That’s a pretty big damned difference.
Everyone pays taxes, even churches. Churches pay sales taxes, use taxes, excise taxes, and payroll taxes. They may pay others that don’t come to mind.
The government spends a certain amount of money. It needs a tax base that covers the expenditures, so it periodically adjusts both tax rates and what is taxed and untaxed.
A choice is made that in setting the tax rates and deciding what is taxed and untaxed, the income and real property of churches will not be taxed. As a result, taxes on other taxpayers need to be higher than they would be if that income and those assets were taxed.
Now, how is that different from the government deciding to raise the tax rates on others and transfer money by direct subsidy to churches who then pay regular rates of income and sales taxes? Answer, only the transaction costs are different.
October 28, 2009, 7:29 pmCCTrojan says:
I have not heard very many religous people engage in the name calling you are suggesting. Maybe you can point me to some examples. I think the opposite is far more prevalent. How many gay rights advocates have refrained from denigrating the religious opposition as bigots?
October 28, 2009, 7:30 pmShelbyC says:
@loki, to clarify the legal fiction angle: A-Z all pay $5, as per your example. Everybody’s happy, nobody’s subsidized. A, B, and C say, hey, we’re going to form a church. D-Z say, “OK, now your church has to pay $5, too.” A, B, and C say, “WTF?!?”
October 28, 2009, 7:32 pmHamlet says:
As a generally outspoken atheist (law student) who frequently argues against the tax exemption, I want to clarify something.
The problem lies primarily in the fact that being religious in nature is in itself a sufficient (or at least overwhelmingly favorable) criterion for an organization to receive tax-preferential treatment. The OP seems to be arguing against a position that churches should _never_ get the subsidy, but I think this is a bit of a straw man. As some commenters suggested above, the societal value or charitable nature of an organization should be determined without respect to whether it is religious. Prof. Volokh would seem to agree that preferential treatment is inappropriate, but he writes it off as a minor phenomenon.
501(c)(3) itself says: “religious, charitable, scientific, literary, educational,” etc. My position, and I think that of many of the people Prof. Volokh is arguing against, is that “religious” does not belong here. I believe not only that its inclusion represents a normatively undesirable favoritism to religion, but that it violates the Establishment Clause.
e: regarding the issue of political involvement: I should check, but I believe churches would be subject to the same anti-lobbying restrictions as other tax-exempt organization? The sort upheld in _Regan v. Taxation with Representation_? If not, that’s also a problem.
October 28, 2009, 7:33 pmFrater Plotter says:
You might want to check that. In jurisdictions I’m aware of, tax-exempt nonprofits are exempt from sales tax.
October 28, 2009, 7:33 pmShelbyC says:
It still sounds like you’re arguing that everything that could potentially be taxed and isn’t is subsidized.
October 28, 2009, 7:38 pmRelic says:
Another distinction between non-taxation and a subsidy: government gophers are needed to ensure that a subsidy goes where it’s supposed to, and those gophers need to be paid. There is therefore an additional cost to a subsidy that is not present in the case of non-taxation.
October 28, 2009, 7:52 pmBrian K says:
donations to churches are tax deductible so your example fails.
October 28, 2009, 7:53 pmkg2v says:
My big worry on tax exemptions for churches is it puts the government in the business of deciding what is, and isn’t a valid religion. Could this not, in a way, be considered “establishment”
October 28, 2009, 7:55 pmShelbyC says:
my example exists within loki’s hypothethical framework.
October 28, 2009, 7:58 pmloki13 says:
ShelbyC,
No. Here’s what you’re missing. Once you have a tax of general applicability, then if a person or entity is exempted from that, they are getting a subsidy. Contrast this difference:
World of A, B, C, and D.
1. There is a flat tax of $5. All pay $5.
2. D is exempted from the flat tax. He pays nothing. D is getting a subsidy.
3. There is a tax on widget production. A, B, and C make widgets and pay 1 cent for every widget they make. D does not make widgets and pays nothing. D is not subsidized.
4. Same as 3, except that widgets made by solar power are exempted from the tax (because it costs five extra cents to make each widget that way). D starts making widgets using solar power. D is subsidized 1 cent for every widget he makes. Why?
a. Cost of making widgets for A, B, C:
$1.01 ($1 for widgets, 1 cent for tax)
b. Cost of making widgets for D:
$1.05 ($1 for widget, 5 cents for solar power)
c. Cost for D without favorable tax treatment:
$1.06 ($1 for widget, 5 cents for solar power, 1 cent for tax)
Subsidy for D- 1 cent per widget. This would be the same (absent transaction costs) as if he was taxed like A, B, and C and the government mailed him a check of 1 cent per widget.
Do you see the difference?
October 28, 2009, 8:00 pmPerseus says:
I find it odd that those who insist there is a wall of separation between church and state that prohibits the church from doing anything the state claims at its own are those most supporting the practice of the state taking things from the church.
October 28, 2009, 8:06 pmMichael H Schneider says:
Moreover, excluding churches from such generally available tax-exempt treatment would itself likely be unconstitutional, so long as similar secular groups keep getting such treatment.
If a church is defined as a place to worship, as mentioned above, (and that’s what I always thought it meant) I have a problem understanding this sentence. I’m imagining an organization saying “yes, we’re a completely secular organization whose only activity is maintaining a place of worship.” Secular worship?
October 28, 2009, 8:19 pmloki13 says:
I fin it most odd that those who want the church and the state inseperably intertwined are those most supporting the practice of keeping the church coffers seperate from the state.
:)
By the way, nice straw man. I think most people have no problem with the exemption (I know I don’t… I don’t want no church in my state and no state in my church) when churches aren’t involved to closely in politics and acting like a PAC. Perhaps you have some other windmills you’d like to tilt at?
October 28, 2009, 8:21 pmRelic says:
Just to toss this out there, does the tax break=subsidy conversation have any point other than to allow wealth distributors to claim they’re giving out a tax break on technicality? Because that’s all it seems to be about. Tax break has a specific understood meaning: a given group is exempt from a given tax. Subsidy also has an understood meaning: the act of giving money to a given group by the government. Whether they’re functionally equivalent is irrelevant to their understood meaning.
October 28, 2009, 8:22 pmJiffy says:
ShelbyC:
A,B, and C should get a grip; this is the way income taxes work. If I pay taxes, then pay my gardener (or one of my many other servants) for doing work on my yard, he has to pay taxes even though I’ve supposedly already “paid” taxes on that money. Now, as Brian K notes, in the real world A, B, and C get to avoid paying taxes on the income they donate to their church (and the church doesn’t have to pay taxes either). D-Z may have grounds to say “WTF” if they get their spiritual satisfaction from making donations (say to individual poor people) that are not tax deductible (and therefore, not subsidized by the government).
October 28, 2009, 8:31 pmShelbyC says:
In #2, it’s not clear why D is not subsidized, since he consumes what the govt was providing in the previous example but isn’t paying anything. And in #4, what’s the diff between a tax on widgets with solar produced widgets being exempted, and a tax on non-solar power produced widgets? Or if A, B, and C produce widgets and D produces blidgets, is there a difference between a tax on widgets, and a tax on production with blidgets exempted.
If you say we have a tax on people and entities with non-profits exempted, then non-profits are subsidized, but if you say we have a tax on people and for-profit entities, then they’re not.
Basically, calling the fact that a tax doesn’t apply to a certain cirucmstance a “subsitity” of that circumstance implies that that circumstance “should” be taxed but isn’t. And there’s alot of room for debate about what is subsized, and what is just not taxed.
October 28, 2009, 8:34 pmDilan Esper says:
I have not heard very many religous people engage in the name calling you are suggesting. Maybe you can point me to some examples. I think the opposite is far more prevalent. How many gay rights advocates have refrained from denigrating the religious opposition as bigots?
People who want to throw gays in prison, or get them fired for their job, or subject them to gay bashing violence, ARE bigots. (And yes, people who want to do the same sorts of things to religious people are also bigots.)
On the other hand, people who have moral objections to homosexuality but favor full civil rights for gays and lesbians are not bigots.
But if you peruse the comments threads here, you will find that many believers will accuse anyone who criticizes conservative Christianity or Catholicism of bigotry.
October 28, 2009, 8:37 pmShelbyC says:
I probably should have excerpted loki’s example in my comment, it involved A-Z paying a tax of $5 per person, not an income tax. I was trying to show the double taxation effect of taxing entities in addition to taxing people.
October 28, 2009, 8:45 pmloki13 says:
No. You’re just being either difficult or dense. There’s a difference between the following two statements:
1. All that is not taxed is a subsidy.
2. An exemption from a tax is a subsidy.
That you are purposefully conflating the two statements says something about whatever point it is you’re trying to make to make to yourself, but very little about what is actually going on.
IOW, if a widget normally costs $10, and is on sale for five dollars, then the cost to me is five dollars. If a widget costs $10, and the manufacturer gives me a rebate of five dollars through the mail, then the cost to me is five dollars. While the transaction costs might be different, the effect is the same.
If the government charges everyone $10 in tax, and only taxes me $5, that is the same as if the government charges everyone $10 and sends me a $5 check.
October 28, 2009, 8:56 pmShelbyC says:
FWIW, I don’t think there are clear answers to who is “subsidized”, it’s usually a propaganda term. There are plenty of industries that we tax the crap out of and also subsidize, so it’s not really clear what’s what.
October 28, 2009, 8:59 pmShelbyC says:
Maybe I’m dense, but please explain the difference between “not taxed” and “exempt from a tax” in your statements. Can I not paraphrase your two statements thusly:
1. All that is not taxed is a subsidy.
2. All that is exempt from tax is a subsidy.
Aren’t these just different ways of defining the scope of the tax?
October 28, 2009, 9:06 pmloki13 says:
No. The first encompasses everything. By that definition, all activity is a subsidy.
The other is more precise- if the government has a tax which you would be subject to, but for some characteristic that the government is favoring (exempting you form the tax), then you are getting a subsidy.
IOW, let us imagine a world in which there was no sales tax. None. I would not say the state was subsidizing purchases. However, let us say that there was a general sales tax of 5%. However,street musicians who play the hurdy gurdy are exempt. The state is subsidizing organ grinders.
‘Cuz everyone’s got something to hide, except for me and my monkey.
October 28, 2009, 9:14 pmAk Mike says:
So, loki13, I take it that food is subsidized by the government in states in which the sales tax does not apply to food?
October 28, 2009, 9:27 pmRandy says:
Guest: “Wait, I thought gays were against the hate crime law that went to Obama today. Weren’t they just marching on the mall for equality?”
Mostly No. Unequivocally Yes.
Though not all — for instance, Andrew Sullivan is against hate crimes law for anyone, gays included. Many gays on the right agree with him. But most gays do support hate crimes law.
Yes, we all were marching for full equality. And the hate crimes law doesn’t really have anything to do with equality, but it is drafted to make sure that it applies equally to everyone. What it says is that if anyone is attacked because of their sexual orientation, then heightened sanctions apply. So, if you, a straight person, are violently attacked by a bunch of marauding gay men *because* of your sexual orientation, then the hate crimes law applies, and heightened sanctions are applied against those convicted.
See? You are protected just as much as we are. Equality for all!
October 28, 2009, 9:32 pmShelbyC says:
Well, there’s still the question of whether it’s a tax on everyone with organ grinders exempted, or a tax on everyone but organ grinders. And I posit that the only reason that what I’m saying sounds stupid is that it’s respoding to your example, which is designed to clearly show that the tax exemption is a subsidy :-).
What if the tax was only on organ grinders. Does that mean that everybody else was being subsidized?
Take the distinction between taxing for profit corporations, and taxing all corporations but exempting non-profits. I’m assuming you’re not arguing that whether or not we subsidize non-profits depends on which formulation we use in defining the scope of the tax. In fact, taxing non-profits is probably a crappy way to raise revenue, because people would refrain from altruistic activity, so we’d gain less revenue and lose benificial activity compared to taxing for-profit corporations.
October 28, 2009, 9:34 pmDavid Nieporent says:
The problem is that you’re begging the question by saying “a tax which you would be subject to.” Taxes are not a natural phenomenon; you’d never be subject to a tax unless the government directly chooses to impose it on you. If the government passes a tax on the income of for-profit businesses, that’s not a “tax which churches would be subject to.”
Same question-begging, by calling it a “general” sales tax. You assume that the default state is taxing everything, and thus not taxing something is a special exemption and thus a subsidy. But the default is not to be taxed. If the government imposes a tax on lawyers, that is not a subsidy for street musicians (*). If the government imposes a tax on lawyers, dentists, and teachers, that is still not a subsidy for street musicians. If the government imposes a tax on lawyers, dentists, teachers, and all professions except street musician, it’s still not a subsidy for street musicians.
(*) I assume you meant an income tax rather than a sales tax; street musicians don’t generally have “sales.”
October 28, 2009, 9:47 pmPerseus says:
Note: The first paragraph was originally written by “New Pseudonym”, but it wasn’t properly attributed to NP due to a formatting error on my part. I added the quote from Burke.
Whether most Americans today support tax exemptions is beside the point since my remark was directed at those with a (Jacobin) mindset who are eager to see churches taxed (I would also remind people that churches are not completely exempt from paying taxes. In some states, for example, churches are not exempt from paying sales taxes), and it would only take a handful of them on the bench to have a big impact.
October 28, 2009, 9:52 pmloki13 says:
Same question-begging, by calling it a “general” sales tax. You assume that the default state is taxing everything,
No, I don’t, as I explained above.
and thus not taxing something is a special exemption and thus a subsidy. But the default is not to be taxed.
True, unless there’s a general tax. But let’s pretend we live in a world where there are taxes.
If the government imposes a tax on lawyers, that is not a subsidy for street musicians (*).
Correct!
If the government imposes a tax on lawyers, dentists, and teachers, that is still not a subsidy for street musicians.
I still agree.
If the government imposes a tax on lawyers, dentists, teachers, and all professions except street musician, it’s still not a subsidy for street musicians.
No.
I am not question-begging (as you care to put it)- rather you are making non-existent distinctions.
There is a difference betwee:
A and B
vs.
Everyone except A and B.
Now, I suppose that somnething could be crafted to fit into your clever hypothetical. Like, say, the government passes a tax that singles out everyone except you by name for a tax. Then it looks like your example, but it still operates as a subsidy. When it does that, get back to me. In the meantime, I look forward to your brilliant analysis of why (for example) an industry that is given $X directly from the government is different than one that is given a $X exemption in their tax.
October 28, 2009, 10:43 pmmattski says:
Actually, they are. At least since the advent of civilization.
October 28, 2009, 11:20 pmShelbyC says:
But if they’re exempt, of if the tax does not apply to them, then it’s not “their” tax, right? I don’t think you’ve explained well enough what makes something a tax that they’re exempt from vs a tax that doesn’t apply to them.
October 29, 2009, 12:04 amJohn Moore says:
Notice the false dichotomy.
How about those of us who have moral objections to homosexuality and do not favor full “rights” for gays? “Rights” is in quotes because gays have succeeded in framing a question of government privilege as one of rights. It is not.
So I am against gay marriage. That doesn’t fit into either category. I have been called a bigot for that many times on this board.
QED
October 29, 2009, 1:14 amDilan Esper says:
How about those of us who have moral objections to homosexuality and do not favor full “rights” for gays? “Rights” is in quotes because gays have succeeded in framing a question of government privilege as one of rights. It is not. So I am against gay marriage.
Well, do you favor full civil unions for gays? Or do you think gays should pay higher taxes, not have inheritance and hospitalization protections, and shouldn’t be able to bring their partners to live with them in the US?
There’s nothing bigoted about saying “I don’t approve of homosexuality and therefore I want to reserve the concept of marriage for heterosexuals”. But once you say “I want the government to treat homosexuals as second class citizens”, that’s where the line is crossed.
October 29, 2009, 4:41 amSlickRicks says:
Professor Volokh’s post relies on the assumption that tax exemptions/subsidies are given to non-profits and religious institutions on an equal basis, but there are examples in the Internal Revenue Code where there is no such equal basis. For instance, the “parsons allowance” allows “ministers of the gospel” to exclude any rental allowance or housing provided to them from their income (s. 107(a)(6)) and furthermore, they can claim a deduction for any mortgage interest or real property taxes paid (s. 265), which could be characterized as going past the mere exemption and into the realm of subsidy, and not on an equal basis with other non-profits, as these benefits are limited to “ministers of the gospel.” What about these provisions are constitutional? So asks Michael Newdow and the Freedom From Religion Foundation in their latest lawsuit (http://ffrf.org/news/2009/parishallowancesuit.php).
October 29, 2009, 9:16 amdevil's advocate says:
Hamlet,
as Billy might have said:
Try this one: My position . . . is that “religious, charitable, scientific, literary, educational” do not belong here. I believe not only that their inclusion represents a normatively undesirable favoritism to religion, charity, science, literacy and education, but that it violates the Equal Protection Clause.
The fact that religion has historically, perhaps reasonably cloaked itself in normallacy is a caution against granting similar status to other presently revered pursuits. The practitioners of the purportedly secular apolitical categories you separate from religion are anything but. They are just religion by another name which is to say trying to cloak one’s policy propositions with morally normative urgency. I’m not saying they have no argument, I saying they should have no tax exemption.
Of course the matter of which tax we are talking about is modestly relevant. Do we consider tithes to the church income. Well, is the price of admission to a movie income to the theater? or to put it in Loki’s context
sorry about that Loki, don’t know the html in this engine for strikethrough.
But no doubt the worst is property tax. We should not exempt churches, schools, or any non-profits from property taxes or regulations – period end of story. While state (and national) property might be exempted as a matter of sovereignty and localities can argue for PILOT or PILT policies (Payment in Lieu of Taxes) essentially you are awarding non-profits the insulation of the sovereign from this generally applicable tax.
I’m sympathetic to those who fear proto-jacobins, indeed as a Burkian at heart. But one cannot suggest in that context that the cozy relationship of the church flowed from adopting a measure of sovereignty.
I do think the pre-revolutionary French regime, epitomizing the general ubiquity of the church/government partnerships in medieval Europe, incompatible with American guarantees, however, I don’t single out churches or religion whatsoever, I single out anyone who claims to a spiritual, i.e. universal moral basis, for exemption. Indeed, as to the Jacobins, meet the new boss, worse than the old boss. And imbued with an ‘enlightened’ moral certitude that makes church’s look downright humble.
Brian
October 29, 2009, 9:46 amdevil's advocate says:
sorry, guess you only get two edits and then the link disappears, so i fixed a little spelling but missed this.
Sockpuppet quote:
Should read:
But one cannot suggest in that context that the cozy relationship of the pre-revolutionary church did not flow from adopting a measure of sovereignty or at least residing under its umbrella in a way we would find constitutionally unacceptable.
October 29, 2009, 9:55 ammischief says:
The government would decide how to divvy up the money.
October 29, 2009, 4:15 pmmischief says:
Higher than whom? You do realize there are a lot of unmarried heterosexuals in the US, don’t you?
October 29, 2009, 4:17 pmShelbyC says:
Yeah. In some ways the gay marriage debate is kind of like a debate on whether or not a tax break on white protestants should also apply to black protestants.
October 29, 2009, 4:56 pmJohn Moore says:
I believe gays should not have the full civil equivalent of marriage, because the government favors marriage because of the benefits of families on children (benefits I believe are better served by heterosexual marriage). Whether that is good policy is debatable – I think it is bad to use tax preferences to subsidize most politices. I think gays should have inheritance and hospitalization protections just as good as heteros. I do not think gays should be able to adopt, except in special circumstances – which is consistent with my views (backed by plenty of studies, and no, I’m not going to cite them) on the benefits of married heterosexual parents.
Even that is too strict a definition, because the government is constantly making decisions on all sorts of bases. Certainly if one wanted the government to treat gays as second class citizens to “punish” them, it would be terribly wrong. On a utilitarian basis, a different matter.
But if one really wants to examine bigotry, one has to start with definitions… Here’s Merriam-Webster:
Some commenters here try to psychoanalize, assuming that, for example, anti-gay marriage means unexpressed hatred of, or intolerance of gays as individuals (“members of a group”). That is also common among gay advocates – one of the reasons I despise most gay advocate groups. They (often intentionally) confuse disagreement with social agenda with hatred of those who propose it or would benefit from it. One sees “racism” often used the same way.
October 29, 2009, 9:34 pmDilan Esper says:
I believe gays should not have the full civil equivalent of marriage, because the government favors marriage because of the benefits of families on children (benefits I believe are better served by heterosexual marriage).
That’s bigoted. Gays and lesbians raise and love their children just like heterosexual parents do. You may “believe” the contrary, but that belief is based on prejudice and hatred for gays, not data.
I do not think gays should be able to adopt, except in special circumstances — which is consistent with my views (backed by plenty of studies, and no, I’m not going to cite them) on the benefits of married heterosexual parents.
Same thing. That’s bigoted and incredibly insensitive to the thousands of wonderful gay and lesbian adoptive parents out there. You don’t have any rational reason to think they are not good parent– you just think that “gay” is somehow “bad”. That, again, is bigotry.
Certainly if one wanted the government to treat gays as second class citizens to “punish” them, it would be terribly wrong. On a utilitarian basis, a different matter.
Often times bigotry is dressed in utilitarianism. People justified slavery as an efficient economic system. They said the south would fail without it. People argued that if businesses were forced to integrate, they would lose customers. People argued that interracial marriages and women in the workforce were bad for children. People argued that a decreased birthrate that accompanied the sexual liberation of women would harm society. People argued that banning marital rape and domestic violence would cause too much disruption in the marital relationship.
In each case, bigotry was justified by utilitarianism.
Some commenters here try to psychoanalize, assuming that, for example, anti-gay marriage means unexpressed hatred of, or intolerance of gays as individuals (“members of a group”).
I don’t think that people who think that, for some religious or spiritual or definitional reason, gay unions shouldn’t be called “marriage” hate gays. But people who want to deny civil rights do hate gays, whether or not they dress their hatred in “utilitarianism”.
Simple test– have you ever identified something that gays do better than straights and argued that because of utilitarian concerns, straights should be denied that right? No? Didn’t think so. I guess utilitarianism is only relevant when it screws over the gays that you think are scum.
October 29, 2009, 9:44 pmJohn Moore says:
There you go, labeling. Look again at the definition of bigotry.
And… amazing… you are assuming my motives, as I predicted. Sir, you do not know my motives, and your assumption of them is… well… obnoxious! I would suggest that the next time attach a pejorative label to someone based on your assumption of their motives, you feel ashamed of yourself. It is not only anti-intellectual, but downright wrong.
Also keep in mind that while you don’t believe the evidence, there is plenty that fair minded people can believe. Same for your second argument. Furthermore, a many thousand year history of virtually all successful societies being based on hetero-sexual marriage should inform the argument.
Your argument by analogy is irrelevant. We are not talking about those issues, or the general history of wrong ideas – we are talking (in this side discussion) about whether certain government-granted privileges (marriage, adoption of children) should be granted to people who behave radically differently from most people in a fundamental and directly related area.
I haven’t argued for denying gays any rights – just privileges, so that’s a non-starter.
You do serve an interesting purpose in your post: clearly highlighting the fallacies of gay arguments, and the nasty and irrational behavior of some gay advocates.
I suspect this were on a different topic, you might be able to address arguments without presuming to know the evil inner thoughts of those presenting them. Since we are on a law blog, I would assert that such discipline is critical to those who practice, or think about the law.
For the record, I do not think gays are scum. They are human beings and hence are to be valued and treated as individuals. In almost all areas, their sexual orientation is irrelevant. I have enjoyed, and do enjoy working with gays, who I didn’t and don’t think are scum, or whatever else you imagine.
October 29, 2009, 10:30 pmDilan Esper says:
John:
There isn’t any evidence that gays and lesbians living their lives and raising their children is harmful to anyone. But people make assumptions based on their prejudices. That’s the entire point here.
Really, there’s a good argument that even if there were such evidence, we shouldn’t be classifying a historically oppressed group and then denying them rights and privileges on this ground. But there isn’t even any such evidence.
And your last paragraph is basically “some of my best friends are black”.
October 30, 2009, 2:21 amBikerdad says:
Why Churches shouldn’t be taxed:
1) A church is a place of worship. Worship is not merely a “social activity” as a previous poster stated. Worship is fundamentally an activity involving two parties, one of whom is not subject to the gov’t. Arguing about the nature of Party 2 (aka the metaphysical party) has caused no end of mischief, and thus getting the gov’t involved in the argument is a bad idea.
2) Explicitly and/or fraudulently, individuals within gov’t will attempt to use gov’t power to advance their own perspective on Party 2, or in the case of taxation, hinder the articulation, practice and advancement of somebody else’s perspective that differs. A simple inflated property tax assessment can put an entity out of operation, whether it be a bar or a church.
October 30, 2009, 2:47 amDavid Schwartz says:
Bikerdad:
1) This is hardly arguing from a neutral point of view. An atheist would respond that praying is no different from talking to yourself. In any event, it doesn’t matter, the govermnent’s regulation hooks on the prayer, not the prayee. You would get absurd consequences if government’s could not regulate an action that had one party outside its jurisdiction if it has other links to the jurisdiction.
2) Everything else in life has to deal with that problem. Exempting only those things the government considers to be churches makes that problem worse, not better. A simple “you are not a church” assessment can disadvantage one entity over another.
October 30, 2009, 3:47 amTruePath says:
That’s fine as far as it goes Eugene, the problem with tax exemptions to churches is that, A church’s tax exempt status is dependent on not having certain kinds of religious beliefs.
In particular churches with religious beliefs about which canidate should be elected president are denied tax exempt status. That seems to be a clear violation of the 1st amendment. A government subsidy is given only to those religions with certain kinds of beliefs.
October 30, 2009, 6:03 amPubliusFL says:
loki13,
First you said this:
You were agreeing with Dilan that a tax cut and a spending program are economically identical except for transaction costs. In economic terms, it doesn’t make a difference whether everyone is taxed $5 and some group is given $3 back by the government or everyone is taxed $5 except for some group which is only taxed $2. So it’s fair to call a tax exemption a “subsidy” because they’re economically indistinguishable. But then you say:
What is the economic difference between the two? In a population of A, B, C, and D, what’s the difference between a tax on “A and B” and a tax on “everyone except C and D.” Either way, A and B pay the tax and C and D don’t. So aren’t they the same in just the way that a tax exemption and a subsidy are the same?
It seems to me that “tax of general applicability” is not so objective as you assume. Like when you say this:
As ShelbyC points out, 3 and 4 can be made essentially indistinguishable by considering blidgets, doodads, and gadgets, which may be arbitrarily similar to widgets. What if a widget traditionally is wound up with a spring, but then someone invents a device that is pretty much the same but is called a “blidget” and is solar powered? Say that the blidget therefore doesn’t fall into the widget production tax’s definition of “widget”. Say that person is D. How do we know whether this is scenario 3, where D is not “subsidized” because he doesn’t produce “widgets,” or scenario 4, where D is “subsidized” because his “widgets” are “exempted” from the “tax on widget production”? What’s the economic difference?
October 30, 2009, 9:58 amBGKev says:
I have no issue with churches being tax exempt. What I DO have an issue with is the donations to the organization that are used for political purposes being deductible to donors. I gave after-tax dollars to No on 1. The Catholic Church in Maine held a second collection on at least one Sunday and then made a six-figure donation to Yes on 1. And the parishioners are going to be able to deduct their donations.
Dilan, you owe John an apology. He hasn’t expressed any “hate.” But John, that doesn’t mean you’re not being bigoted. Plenty of bigots love their gay friends, they just think we’re “inferior.” And by saying we don’t meet the minimum standard for parenthood, that’s pretty much exactly what you’re suggesting.
October 30, 2009, 10:01 amYou don’t get to quote “many studies” without citing them, because a lot of those “many studies” are simply recitations of the discredited “work” of one anti-gay researcher(Cameron).
Even then, a lot of what gets cited are studies showing that on average children raised by their biological parents do “best” with no relative ranking of the multitude of other arrangements. So it says basically nothing as to whether same-sex parents are better or worse than the other alternate arrangements, several of which involve marriage. There’s definitely evidence of high rates of abuse by step-parents, yet we don’t prohibit single parents from remarrying.
All of which is beside the point, since the issue with marriage is denying family status to gay couples. There’s no evidence gay people simply by virtue of being gay cannot raise children, and we allow straight people who definitely would not be allowed to raise children to get married. So it doesn’t exactly ring true that it’s all about the children.
Aultimer says:
Wrong. The belief isn’t the problem – it’s the act of advocating the belief that moves the exempt to the non-exempt.
You might be surprised to learn that the goverment only withholds subsidies from (and maybe even penalizes) churches with religious beliefs like “salvation requires the blood of innocents be spilled” and “all (pre-tax) material possessions of the followers must be given to the prophet” when they act on those beliefs.
October 30, 2009, 11:06 amShelbyC says:
Oh. No first amendment problem there.
October 30, 2009, 1:50 pmJohn Moore says:
There is such evidence. There is a much higher rate of domestic violence and psychological problems among gay couples. There is a much higher rate of sexual promiscuity and shorter lifetimes of relationships.
None of these are good for kids.
However, the most important argument in this regard is the natural character of heterosexual relationships, and the impact of having both a male and a female parent. None of this, of course, excuses the dramatic rise of poor outcomes in heterosexual relationships, which are a result of the “sexual revolution”.
Which, in fact, is a perfectly valid argument when discussing one’s personal prejudices or… let’s see (lookup up thread)… you, in one post, about my attitdes:
So obviously I hate these people I enjoy working with, and think they are scum, right?
Again, you are conflating views about social policy regarding groups, and views about individual people. I expect better on a law blog… well, all right, I’ve been here long enough… I would hope for better.
October 30, 2009, 11:03 pmBGKev says:
Again, SOURCE?
October 31, 2009, 7:29 pmDilan Esper says:
There is such evidence. There is a much higher rate of domestic violence and psychological problems among gay couples. There is a much higher rate of sexual promiscuity and shorter lifetimes of relationships.
How about lesbian couples? Remember, you don’t want THEM to marry either.
However, the most important argument in this regard is the natural character of heterosexual relationships, and the impact of having both a male and a female parent.
Naturalness is the last refuge of the bigot. Interracial marriage went against the laws of nature too. So did racial integration. And, of course, gender equality violated the laws of nature.
“Nature” is a shorthand for “stupid prejudices that have no basis in fact and which will be seen as embarrassing 30 years from now”.
So obviously I hate these people I enjoy working with, and think they are scum, right
I think “homophobia” is the perfect term for it. You won’t admit it, and you are too civil to express it in personal terms, but you fear gays and lesbians. That fear leads you to believe things about them that have no basis in reality. In that respect, you loathe them.
There’s more than one way to hate someone. And assuming without evidence they are a bunch of people who will ruin the youth of America is hate just as much as attending a Klan rally would be.
November 1, 2009, 1:59 amJohn Moore says:
No, it has to do (in this case) with research on various influences on child development, and a bit of normal conservative precaution about social experimentation.
So if your first attempt at mind reading fails, you try another.
Again, that is just pathetic.
However, I’m sure it makes you feel better because it gives you an explanation you can live with (motives hidden even to me). See – I can mind read too.
While making such assumptions is certainly wrong, it is clearly not “hate.”
November 1, 2009, 12:42 pmNathanael says:
Uh-uh, you don’t get away that easily, Professor Volokh.
The reason is that the standards for tax-exemption for churches are *not the same* as the standards for other organizations.
Churches which satisfy the requirements of any other not-for-profit provision of the tax code should of course be not-for-profit.
However, some churches operate for essentially for-profit (Scientology!) or political purposes — yet retain their tax exemptions and deductions. Many others operate essentially as social clubs, yet receive *better* tax breaks than the not-for-profit social clubs.
Specifically, the tax-deductibility of contributions to churches is *better* than the non-tax-deductibility of contributions to political not-for-profits or to not-for-profit social clubs.
Failure to consider the actual facts of the case, Professor. Try again.
November 1, 2009, 3:06 pmJohn Moore says:
I suspect there are very few “social club” churches, although people will always seek ways to game the system. Certainly Christian churches are neither for-profit nor merely social clubs, although occasionally there will be profiteering in the very large evangelical ones.
November 1, 2009, 3:28 pmthe tax club says:
Churches should always be tax exempt
November 30, 2009, 9:04 pm