I think we really should be looking at the tax-exempt status of religious organizations have that subsidiaries that are doing their taxes and setting up shell companies to hide where money is coming/going.
Better to just get rid of the tax exempt status for religious organizations altogether. They can operate like any other non-profit and be subject to that set of rules, or they can be a regular corporation and be subject to a different set of rules. The religious exemption is a big regulatory gap that doesn't need to exist.
The details vary from country to country, of course, but some of the tax exemptions which religious groups get are actually just standard exemptions available to all non-profits, or all charities. English law has long defined "advancing religion" as a "charitable purpose". The Charitable Uses Act of 1601 (aka the Statute of Elizabeth) included "the repair of... churches" as a charitable purpose, and later case law took inspiration from that clause to view "advancing religion" more broadly as a charitable purpose. All common law legal systems have inherited this, although the extent to which they still focus on it varies (the concept still exists in US law too, but my personal impression is the US legal system nowadays pays less attention to it than the legal systems of the Commonwealth.)
When people advocate ending religious tax-exemptions, do they mean to end tax-exemptions specific to religious groups – but not available to charities in general, or non-profits in general? Or do they also mean to deny religious groups their status as charities? Or even their status as non-profits?
> The details vary from country to country, of course, but some of the tax exemptions which religious groups get are actually just standard exemptions available to all non-profits, or all charities.
Right. Religious groups in the US get tax exemptions that non-religious 501(c)(3)s don't get. Churches can exempt themselves from FICA taxes. Churches are not required to withhold income taxes on wages paid to ministers. Churches can provide a housing allowance as compensation to ministers which is exempt from taxation
> When people advocate ending religious tax-exemptions, do they mean to end tax-exemptions specific to religious groups – but not available to charities in general, or non-profits in general? Or do they also mean to deny religious groups their status as charities? Or even their status as non-profits?
I can't speak for anyone else, but I think churches should not get special treatment relative to other charitable organizations.
> Churches can exempt themselves from FICA taxes. Churches are not required to withhold income taxes on wages paid to ministers.
Churches don’t pay FICA on clergy, but the clergy are supposed to pay SECA instead. This is because the IRS doesn’t consider the church-clergy relationship to be an employer-employee. It is possible to be exempt from SECA too, but only if one asserts a religious objection to Social Security and Medicare - which I understand is rather rare. Furthermore it is only available to religious groups that existed in 1950, so if you start a new religion tomorrow you aren’t eligible, no matter how successful it might become.
> They can operate like any other non-profit and be subject to that set of rules, or they can be a regular corporation and be subject to a different set of rules.
Its pretty clear that OP just wants them to register as 501c3's or similar not force them to pay taxes in general
If OP just wants religions “to register as 501c3’s”, then I believe they already have almost what they want. From what I understand, the principal tax exemption available to religious groups under US federal income tax law is 501(c)(3)
It is true that religious groups get their 501(c)(3) status automatically without having to apply for it to the IRS - but changing that rule wouldn’t lead to them paying any more tax, since if they do apply the IRS almost always just grants it anyway.
They are automatically treated like 501(c)(3)s however the application and annual filing process is waived ie your average 501(c)(3) has the IRS in its books a lot more actively than the average church. Its pretty plain that many churches are not playing by the rules even if most are. Why should they be special?
Sounds like the opposite. To qualify for religious tax exemption you need to actually prove to be, and practice as, a "real" religion. If there is no tax exception, it's more fair.
As if governments were in the habit of arbitrarily handing out large scale tax exemptions. That idea might have been well-intended, but it's really a solution in search of a problem. And how would a religion be "taxed out of existence" anyways? Or the religion the belief or is the religion the org?
It is neither respecting an establishment of religion, nor prohibiting the free exercise thereof, to require that they pay taxes to support the society which allows them, as of now absurdly for free, to function and exist in the very first place.
I would go one step further and say that donations to religious organizations should not be tax deductible. They are not charities in 99% of the cases.
You said 99% of the churches do charitable work. I highly doubt that’s 99% of budget. I am sure most of it is used for operations. Just because I make donations every year, doesn’t make me a charity organization.
(Not an American)...I don't see any need for donations (religious or non-religious) being tax-deductible. In my country, it's very simple: here's your income and here's your tax rate (no deductions). What you do with the rest is up to you.
Many countries find it useful to encourage some behaviors and discourage others by means of tax policy. Not just the US, although the US seems to do it quite a bit.
So we have, or have had, tax policies in the US that encourage home ownership, marriage, donations to charity, long-term investment, purchasing electric vehicles or electrifying your house, and more. The results of each of these is mixed, and sometimes contentious, but they're all there because congress decided at one point or another that a thing was worth encouraging or discouraging.
(an American) - our tax code encourages behavior society deems virtuous. We "want" people to give money to homeless shelters, outreach programs, overseas disaster relief, etc - so we "push" then to do that by making it relatively less expensive.
I can easily argue that citizenry being directly involved in directing their funds to causes that matter is more democratic than the government doing that on their behalf.
Do you want to hear something really fucked up? The extensive protections we've granted to churches is now being abused by dark-money groups and lobbying firms so they no longer have to file 990s or disclose donors. The Family Research Counsel (partially famous for supporting the death penalty for homosexual activity in Uganda) is now a registered Church - and their lobbyist leader, David Perkins is the head of this supposed religion according to what they filed with the IRS:
If you're asking how they do political activities when that's still (on paper) illegal for churches -- they have a separate organization with the same employees, board, leadership, and address called FRC Action that handles their political activity with "different" dollars.
The separation of church and state is not about preventing any kind of relationship between religious institutions and the government. Rather, it is about ensuring that the government does not establish an official state religion, and that it remains neutral towards different religious beliefs and practices.
This - but one could argue that the state having to make determinations of what constitutes a religious belief and practice _could_ go against the separation of church and state.
The state's role in determining whether a religious organization qualifies for tax-exempt status is not to evaluate the content or validity of the organization's religious beliefs or practices. The state's role is to ensure that the organization meets certain objective criteria for tax-exempt status, a necessary function.
You sure can if you follow the IRS's strict rules and requirements for granting tax-exempt status to religious organizations. I suspect you would have difficulty in demonstrating that the organization has a legitimate religious purpose and is organized and operated exclusively for that purpose. Creating a fake religion is likely to be viewed as fraud and could result in legal consequences.
Its basis is that taxation is a form of coercion, and government having the ability to coerce or even persecute religious organizations through taxation would violate the separation of church and state.
I personally think the incestuous menage-a-trois between corporate interests, the Republican party and Conservative Christianity is a bigger threat to liberty, but whatever.
Somehow I don't think abolishment of the Johnson Amendment would result in less religious involvement in politics.
It's a very large interconnected system.
The main effect of eliminating the tax free status for religious institutions would be a push toward charity involvement where instead of the charity work being part of the church, the church would be a part of the charity (think basement soup kitchens and the like). Instead of having "St Mary's church and Soup Kitchen" you'd have a big legal shuffle that accomplishes nothing resulting in org titles like "St Mary's Soup Kitchen and Related Worship Services"
Unless they're proposing complete elimination of all tax-exempt status for all orgs including charities and similar orgs. Which would be interesting to think about but probably impractical?
It does, they both have to pander to the same interests and win the South, but between the two the Republicans more openly integrate religion into their core identity.
Which in a way makes them more sincere than the Democrats, whose embrace of secularism and leftism so often seems like half-measures compared to what the other party is willing to commit to.
The shell company scenario certainly is bad, although it's not inherently limited to religious orgs. We see this a lot with the broad definition used for 501c3's. The dog I just picked up from the breeder has her business as a 501c3 because they occasionally contract with a veterans org to supply service dogs. 75%+ of her dogs don't fit that criteria and are just pets.
Another thing to note is that religious orgs, by-in-large, run off donations through tithes and offerings. I know we're all thinking of the O'Steens, TD Jakes and the other charlatans on TBN. The types that charter private planes, and have subsidiaries.
Truthfully, they're really the minority when we consider that they fall under the same umbrella as the countless sub-100 person congregations like 1st Baptist on MLK Jr Blvd in lower San Fransisco or Iglesia de Christo on San Mateo Blvd in Albuquerque.