The effort by the City Council of Nome, Alaska to establish tax on churches within its city limits spotlights a number of issues the nonprofit sector will be bickering over in the coming years.
With cities, states, the feds looking for new and creative ways to extract revenues, organizations that claim dubious charitable purposes will continue to be scrutinized. Efforts to strip the National Football League of its nonprofit status remain ongoing.
While chatter about taxing the houses of the holy has popped up periodically, there really have been no serious discussions about the subject at the policy level. Taxing churches touches one of the core cultural behaviors of American life. Recent surveys show churches are seeing a slight drop in donations but donations to religious institutions still account for more than 30 percent of overall American giving.
If the Nome approach begins to spread to other municipalities, a furious debate about the role of faith and churches in American life is likely to ensue. The irony is that the original purpose of the tax exemption was to strengthen the wall between church and state, on the assumption that restricting the financial relationship between the two offers churches a degree of independence not enjoyed by tax-paying corporations or organizations.
Over time, though, the tax-exemption for churches has been contorted by comically elastic definitions of what constitutes a religious institution, and by new and creative ways for churches to generate tax-free revenues. From churches hocking all manner of death-defying protein shakes [Pat Robertson] to pastors avoiding paying property tax on their million dollar mansions [Joel Osteen], the rest of us seem overly willing to give a tax-free pass to organizations and individuals who pledge fealty to some form of higher power.
What we need is more oversight of churches from the IRS; we need new ways of defining religious institutions within the context of charitable purpose. If a church wants to act like Amway, let them be taxed like Amway. A 12-million dollar mansion 10 miles away from a church is not a parsonage, so perhaps the local municipality should benefit from a fair property tax. Let’s lose the mail order scams, and the tax exemption for churches that do nothing to feed the hungry, house the homeless, or help individuals and families get back on their feet.
It is the undue deference to faith in this country that allows for this abuse. We assume churches can’t do harm or commit fraud or operate with deceptive motives. It’s time to stop illegitimate churches from robbing our treasuries.