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CHRISTOPHER TAYLOR'S BOOKS

Tuesday, August 27, 2013

TAXING CHURCHES

"The right to tax is the right to destroy."
-Thomas Jefferson


Churches do not pay taxes, as long as they register as a certain sort of organization with the federal government.  Thus, tithes and offerings collected by the church are completely controlled by that church and the government gets no part of them.  Some churches don't file and pay taxes normally, but also are under no restrictions whatsoever (they can be openly political, for example).
This has long been a source of annoyance to many, especially those on the left, and recently two articles were written about the idea of taxing churches.  Matthew Yglecias at Slate wrote:
Let’s tax churches! All of them, in a non-discriminatory way that doesn’t consider faith or creed or level of political engagement. There’s simply no good reason to be giving large tax subsidies to the Church of Scientology or the Diocese of San Diego or Temple Rodef Shalom in Virginia or the John Wesley African Methodist Episcopal Zion church around the corner from me. Whichever faith you think is the one true faith, it’s undeniable that the majority of this church-spending is going to support false doctrines. Under the circumstances, tax subsidies for religion are highly inefficient.

What’s more, even insofar as tax subsidies do target the true faith they’re still a pretty bad idea. The basic problem with subsidized religion is that there’s no reason to believe that religion-related expenditures enhance productivity. When a factory spends more money on plant and equipment then it can produce more goods per worker. But soul-saving doesn’t really work this way. Upgrading a church’s physical plant doesn’t enhance the soul-saving capacity of its clergy. You just get a nicer building or a grander Christmas pageant. There’s nothing wrong with that. When I was young I always enjoyed the Grace Church Christmas pageant. But this is just a kind of private entertainment (comparable to spending money on snacks for your book club—and indeed what are Bible study groups but the original book clubs?) that doesn’t need an implicit subsidiy.
And in response, Dylan Matthews wrote in the Washington Post that this would be a revenue enhancer for the government:
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.
Both refer to this tax exemption as "government subsidy" and say that “You give religions more than $82.5 billion per year.”  They argue that this is unreasonable, because it means that the taxpayers are forced to give people they disagree with or find offensive money!
Now, I'm sure you can see a few flaws in this immediately.  For instance, we're forced as taxpayers to literally give money to organizations such as Planned Parenthood money directly in the form of loan guarantees, grants, and government funding.  Funding organizations such as the Corporation for Public Broadcasting which routinely annoys half the political spectrum happens every year.  Yet neither of these would even consider cutting any of that funding.
In fact, if you look closely, neither one seems to want to end tax exemptions for anything but churches.  Matthew Yglecias mentions Scientology and Judaism at least, so he's more inclusive of religious bodies (Mosques are conspicuously avoided), but what about all the other tax-exempt nonprofits?  What about People for the American Way and NPR and Planned Parenthood?  The NAACP and the ACLU don't pay taxes, either.
Yet these men argue only for religious organizations to lose their tax exemption.  Nothing else.  Which means they're targeting these bodies specifically for a reason. Its hard to avoid the suspicion that behind this call for ending tax exemption for churches is not merely an atheist bent, but an attempt to disarm the calls for defunding places like Planned Parenthood.  One of the standard techniques of Alinskyite tactics is to disarm your opponent by calling for schemes that kick their legs out from under them.  You want to defund our groups?  Well how about we do it to you?  Except what we call for is not the same as what these men argue for.
See when conservatives talk about ending money sent to organizations that are overtly political (and radically leftist) they are against the funding of these groups, not the tax exemption.  Some clearly violate their nonprofit status in violent and regular ways, which would mean they should lose that exemption, but in principle, conservatives aren't opposed to the tax exemption.
Hidden in their arguments are a few other problems and faulty presuppositions.  First off, both assume that all money belongs to the government and we raise it for the central planners.  That's how they come up with the "subsidies" and "you're paying for religion" lines.  The presumption here is that if a body does not pay taxes, its taking money away from the federal government - and you as a taxpayer, in the process.
This is flawed for several reasons.  First off, money we earn is ours, we earned it.
We give some of our money in taxes to the community for shared benefits, such as police and fire protection. Taxation is a reasonable and proper expense to pay for the proper and constitutional role of government that all citizens should be willing and proud to pay.  
Further, a church is not taking money from anyone by keeping theirs; each individual person in the church pays their taxes, even if church as a body does not. So the taxes are paid, just not by that particular body.  And why don't non-profits pay taxes to begin with?  To understand that, you have to understand the purpose of taxation.
Taxes are to fund proper use of government, and that's it.  It is not to shape behavior, encourage certain economic activity, or to fund good ideas and well meaning efforts by the government.  Taxes do not exist to fill the endless need of politicians to spend in their home district nor to fund grand schemes, but the bare minimum of government activity.  Anything more is tyranny, forcing money out of the public to fund the whims of a small group.
The entire principle behind tax exemptions is an understanding that these non-profit organizations are providing a benefit to the community which the government does not have to.  If a church has a food bank, helps the poor in their community, volunteers at the local free clinic, and so on, that means the government does not need to spend tax dollars there.  If a non-profit lab tests dairy products for quality, that means the government does not need to.
Thus, non-profits are tax exempt because they save the government money, provide a general benefit to the community, and are a positive influence on society to such a degree that they offset any potential revenue loss.  Whether you happen to personally agree with the philosophy behind these organizations is utterly irrelevant.  What they do is what makes them tax exempt.
Further, if you tax these organizations, they are unable then to provide these services.  They won't have the money to pay to help others, and they'll have to charge more for any services they do charge for in order to afford to stay open.  Thus, the general benefit of these groups is reduced or eliminated - negating any benefit the tax revenues might generate.  If your local church has to shut down or reduce its neighborhood benefits, then the government has to take up the slack.  And since the government's ponderous bureaucracy and inevitable corruption makes it significantly less efficient than a small non profit, that means it does less good for more cost.
This is something that Dylan Matthews cannot seem to see around the dollar signs in his eyes.  He only sees potential tax revenues for the federal government.  Imagine what we could do with all that cash!  We could build high speed rail!  We could fund more schools!  We could create a Department of Peace!  The cost to these non-profits and society at large seems to elude him entirely.
And consider Matthew Yglecias' approach toward non profits.  He sees their work not in terms of communal benefit but in terms of productivity.
The basic problem with subsidized religion is that there's no reason to believe that religion-related expenditures enhance productivity. When a factory spends more money on plant and equipment then it can produce more goods per worker. But soul-saving doesn't really work this way.
Now we've already dealt with the canard of "subsidized religion," so we can put that foolishness aside.  But note: productivity is his focus here.  This is an all-too familiar reductionism of everything into economic terms.  Churches are an economic system because everything is an economic system in this worldview, and since a rich church is no more productive than a poor one in terms of spiritual economy, then who cares if they're poorer?
This is the language of Marxism, the reduction of all the world into economic concepts; its what the entire Manifesto was based on.  Its amusing to see someone be so blatant about it, but these days the delusion of Communism being no threat or matter of concern has spread pretty wide.
In the end, both of these men suffer from basic misconceptions about economics, culture, taxation, and the point of non profits to begin with.  And what's worse is that they would predictably oppose any taxation of any non-profit that benefits the leftist political machine, such as the Southern Poverty and Law Center or International A.N.S.W.E.R..  Yet if your entire concept is based on "we could raise more tax revenues" and "but I don't agree with all these guys, why take my money" then by definition you must extend this taxing non-profits concept to all of them, not just the religious ones.
The only conceivable explanation to why this seems remotely reasonable to these men is because of their innate hostility toward religion in general (and Christianity in specific).  Its not just them, they're children of a culture which is increasingly hostile toward religion.  This proposal only seems proper with a background of atheist, humanist hostility.  That, combined with the rank ignorance explained above makes a foolish idea seem quite reasonable to the fool.
*Short Version: there's a good reason non-profits don't pay taxes, and wanting only some to says more about you than it does these organizations.
*Stories via Gene Vieth's blog Cranach.

3 Comments:

Anonymous Anonymous said...

How is money "earned?" How is money you "earn" "yours"?

11:05 AM, August 28, 2013  
Blogger Christopher Taylor said...

Well see magic elves pick raw money from trees in the rainbow forest, then gently roast it over fires until its ready to be sprinkled over the heads of people at random all around the world each night!

7:15 PM, August 28, 2013  
Anonymous Anonymous said...

More believable story than a "fair market."

12:02 PM, August 29, 2013  

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