Should Churches Be Tax Exempt?

May 10, 2012

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The Washington National Cathedral, also known ...

The passing of Amendment One in North Carolina yesterday got me thinking about a long-standing law in the United States that gives tax-exempt status to recognized religious institutions. The basic idea is that the US was founded on religious freedom and the surest way to prevent the free exercise of religion is to tax it . Exempting a church from taxes is also one of the best ways to keep the “separation of church and State” as described by Thomas Jefferson in his letter to the Danbury Baptists. This nation was founded on the basis that people should be able to practice whatever religion they’d like, and the government should have no ability to prosecute or privileged individuals for religious reasons – it’s supposedly why the Pilgrims came across on the Mayflower.

Over the past few months many churches in North Carolina have taken a rather active stance in favor of Amendment One, from simply putting up signs in favor of the amendment to having their pastors actively speak to the media that they are supporting the amendment. Beyond that I’ve heard quite a bit of anecdotal evidence that some churches are even telling their congregation that they should vote for Amendment One. One of the biggest Holy Rollers of all time, Billy Graham, came out enthusiastically for Amendment One. By taking an active stance for such a politically divisive issue, these churches are without a doubt getting political – if that’s the case, shouldn’t the rewards for staying politically neutral, tax exemption, be taken away?

A tax exemption is not a right, there is no constitutional mention at all of a religious institution’s right to not pay taxes. In fact, there are forms and qualifications to submit to the IRS that any tax exempt organization has to complete to show that they get the privilege of paying less or no taxes. The whole purpose of the tax exemption in the first place was because churches were believed to “fill in the gaps” in terms of charity and helping the poor and destitute, the gaps that the government was unwilling or unable to take care of. If a church is taking a political stance, then they are intrinsically swaying voters and changing outcomes and results regardless of the original intentions.

The right to not pay taxes is fine for charities, but when a church decides to speak out against individual rights the IRS has the right to veto that church’s application for tax-exempt status.

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6 Comments (+add yours?)

  1. Dave Walters
    May 11, 2012 @ 06:11:32

    Dan, You might want to change the opening of that last paragraph. You state previously that tax-exemption is not a right, and I agree. Then you say “The right to not pay taxes is fine for charities…”. Ahem.


  2. Anonymous
    May 11, 2012 @ 08:30:59

    This is an interesting arguement, but the timing is also interesting. Churches have always been political, from integating the revelutionalry war to pushing the ban of slavery and alcohol. In resent times, churches have hosted political candidates and pushed for changes or maintainance of the status quo on several insues (abortion and gay marraige are just the most publicized). The right wing wnats churchs that host left leaning poloticitians (Al Gore was the most vocal, even emulating the speach paterns of a good old fasioned southern Babtist) to have their tax exempt status revoced, and the left want chruches penalized when they make statements that they don’t like. I think that Jefferson’s commnetary is reinforced by those attitudes. It should not matter what a church says or backs. If you are using the tax code to shut people up, then you are denying the freedom to practice your own religion. I personally want my paster, preist, rabbi or imam to let me know the stance of my church, sinagog or mosque. In America, I still make my own discisions, with our without the concent of my religion and I want to continue to make discisions about my religion without the concent of my government.


  3. Zarberg
    May 11, 2012 @ 09:02:08


    While you may be smart enough to make your own decisions, other people may not be. In addition, due to religious beliefs churches may hold power over some of their congregation. Excommunication is a very real penalty, at times even if you are just registered to one political party (, if you are influenced enough by a religion to donate a percentage of your salary it is obviously a meaningful thing making being kicked out a meaningful penalty.


  4. Squeaky
    May 16, 2012 @ 07:14:33

    Sorry this is so late. I’ve been wanting to reply but it’s been crazy. First of all, this was a great idea to write about Zarberg. I enjoyed it.

    I have a question for you. Are you saying that if a church teaches it’s members by relating their beliefs to a current social situation, they should lose their tax exempt status? For example, lets use gay marriage as the issue. If I’m a Lutheran or Catholic and my pastor (or priest) says that homosexuality is immoral and should not be made legal because it violates the teachings of our Lord and Savior—-should that church lose their tax exempt status?

    Or is the situation such that you would only endorse removal of tax exempt status if members of the church were standing on the sidewalk holding signs, chanting, etc? What about if the pastor (or priest) or members of the church appear on a local news channel talking about the churchs stance?

    I’m sure you know my opinion, I’m trying to understand yours.


  5. Zarberg
    May 16, 2012 @ 09:32:42

    First, show me where Jesus said homosexuality is immoral. Not the Bible, Jesus.

    Second, there are plenty of churches that are literally telling its congregation how to vote – who to vote for, what to vote on yes/no issues, etc. That to me is a huge boulder sitting in a puddle of grease at the top of an oil covered slope. At that point the least that should happen is any and all church records should be made 100% transparent and a full review of their tax exempt status should be taken.

    I’m not saying there should be a blanket removal of all tax-exempt statuses for religious institutions because of their charity, I’m saying those statuses should be looked at a lot closer before they’re given. I’ve heard of plenty of issues where churches are in a gray area because of what they’re telling their congregation to do, but I have not heard of one area where a church is denied based on that.


  6. Zarberg
    May 16, 2012 @ 09:37:56

    See also JFK’s address to the Greater Houston Ministerial Association in 1960 when the issue of his being Catholic was brought up as a reason he shouldn’t be president.


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