American law and tradition say that some organizations need not pay taxes on their income or holdings. And that people who choose to donate money to such organizations may write that gift off on their income tax forms.
Tax-exempt organizations do things that society needs done but that aren’t always done — or done so well, or done enough — by government. They don’t replace civilized government, but they do substantially supplement it, sometimes fulfilling human needs with more devotion and compassion, at much lower cost, than any state or federal bureaucracy could.
So, because promoting religious belief is not a legitimate government function, we occasionally revisit the question of whether religious institutions deserve to be excused from the same burden of taxation that other organizations must bear.
The short answer obviously is, no, they do not. The longer answer is that any religious outfit worth its pillar of salt can continue its operations with little need to satisfy the Internal Revenue Service or the Utah State Tax Commission, with what should be just a little shift in their emphasis.
Back in the day — i.e., the 16th century — people accepted without much thought the idea that churches, mosques, synagogs, etc., and their attendant functions were properly free of taxes because they were doing something that the society needed to properly function. They were spreading the Word of God.
Jesus’ admonition to render onto the person whose face was on the coin seems not to have been taken all that seriously, by his own church — whichever one you think that is — or anyone else’s.
The Salt Lake Tribune’s money-watching reporter Tony Semerad outlined the debate in a recent article, focusing on the multiple billions worth of dollars and land held by the Utah-based Church of Jesus Christ of Latter-day Saints, much of it that came from, or is stashed in, tax-exempt operations.
That was followed by a commentary from William C. Duncan, of the LDS-leaning Sutherland Institute, defending the concept of tax-exempt churches as a necessary result of the constitutional protection of religious freedom.
Duncan is certainly correct when he argues tax exemptions for religious organizations should not be a pick-and-choose kind of thing. That it would be wrong for government to have the power to label some churches churchy enough to avoid taxes while others are not. That would be tantamount to having the kind of official religion that the First Amendment explicitly forbids.
It’s also a straw man that no one is actually arguing for.
And if just being mentioned in the First Amendment got you a constitutionally guaranteed tax exemption, then it wouldn’t have taken 228 years for the newspaper you are reading now to become a tax-exempt organization. We’d have been that way all along, and so would all the other newspapers in America, including the 2,000 or so that closed in the last 15 years.
Assigning the function of reporting the news and hosting debates on same to independent nonprofits, rather than leaving it to be done by government directly, is just the kind of thing that we have tax-exempt nonprofits for.
Again, promoting religion is not a proper government function, nor one that government should subsidize through granting tax-exempt status. But there is an obvious way out.
All religious organizations have to do to keep the taxman away from their door is to spend their money and devote their land and other resources to functions that would clearly quality as nonprofit tax-exempt if they were done by a secular organization. You know, all that “feed the hungry, clothe the naked, house the homeless” jazz that supposedly is foundational to most faith traditions. All quite properly free from taxation, no matter who does it.
And, if the groups that operate homeless shelters and food pantries and free day care centers and clinics and hospitals want to pause for a few minutes a day, and a couple of hours on Sunday, to reflect on the root of their compassion for other human beings, go for it.
These outfits can’t require those who receive their social services also participate in their religious services. Though many people whose lives are improved would choose to follow those who helped them in their time of need, and that would be fair.
If an organization as rich as the LDS Church stopped building ornate temples and shopping malls and started building villages of tiny houses for the homeless and hospitals for people who are either already poor, or will be after they get that next dialysis bill, the good will they would build up in every community where it operated would bring in much more respect, and many more converts, than a million young missionaries.
George Pyle, opinion editor of The Salt Lake Tribune, would ask you to buy him an ice cream sundae. But it wouldn’t be tax deductible.