Tax exemption and religious institutions have long been at odds. Those in favor of tax exemptions for religious institutions say that “separation of church and state” directly implies that government can’t profit from religion in the form of taxes; that would be the short road to establishment of State Religion. But in this day of political pulpits and publicly partisan preachers, is it time to start reassessing that fine line between “separation of state,” “subsidizing religion” and “dare we say “funding political propoganda.” This landmark ruling from Western Wisconsin may be the first shout in that direction.
Today, U.S. District Court Judge Barbara B. Crabb ruled that the “Parish (Parsonage) Exemption” (26 U.S. C. § 107(2), passed in 1954) is unconstitutional according to the “Establishment Clause” of the Constitution. The Parish Exemption allows religious ministers to avoid paying taxes on houses given to them by the church, which cost the government about $2.3 billion from 2002 to 2007 alone. The number is likely much higher now.
Since 1954, members of the clergy have been allowed to exempt not only their church-bought homes, but have been permitted to exempt all costs related to the home (maintenance, improvements and upgrades) up to the fair market rental value of the home. If you’re thinking that particularly benefits guys like 1950s televangelist Rex Humbard, then you’re thinking in the right direction.
Of course, the exemption wasn’t necessarily meant to give clergy an unconstitutional advantage. The crucial thing to remember about this bill is that it was passed in 1954, when McCarthy-era witch hunts meant that if you didn’t vote for a bill that combated “Godless communists,” then you were one yourself. And that was political suicide, even for a Northern Democrat like Peter Francis Mack. He said at the time:
“Certainly, in these times when we are being threatened by a godless and antireligious world movement, we should correct this discrimination against certain ministers of the gospel who are carrying on such a courageous fight against this foe. Certainly, this is not too much to do for these people who are caring for our spiritual welfare.”
Now, just to put things into perspective, Mack also sponsored the Switchblade Act of 1958, which made the gang-associated switchblade illegal. And indeed, the Switchblade Act DID work…worked to block access to the symbolic switchblade, and to send gang violence through the roof as they ironically turned to more accessible firearms.
So, the Parish Exemption wasn’t the first or last act of the Red Scare Era to gloriously backfire in Constitution’s face; but if the Federal court doesn’t appeal and overturn it for equally political reasons, then this might be The Shot Heard ‘Round the Collection Plate.
The Freedom From Religion Foundation, which brought the lawsuit along with co-presidents Annie Laurie Gaylor and Dan Barker are calling this decision a “major federal court victory.” The foundation’s lawyer, Richard R. Bolton, said:
“The Court’s decision does not evince hostility to religion — nor should it even seem controversial. The Court has simply recognized the reality that a tax free housing allowance available only to ministers is a significant benefit from the government unconstitutionally provided on the basis of religion.”
Judge Crabb wrote a very strongly worded, 43-page decision prefaced it by quoting the Supreme Court:
“Every tax exemption constitutes a subsidy.”
“Some might view a rule against preferential treatment as exhibiting hostility toward religion, but equality should never be mistaken for hostility. It is important to remember that the establishment clause protects the religious and nonreligious alike.”
On the law unfairly subsidizing religious figures:
“I agree with plaintiffs that §107(2) does not have a secular purpose or effect,” and “a reasonable person would view it as an endorsement of religion…the exemption provides a benefit to religious persons and no one else, even though doing so is not necessary to alleviate a special burden on religious exercise.”
She further noted that all taxpayers are burdened by taxes, and that the “Defendants do not identify any reason why a requirement on ministers to pay taxes on a housing allowance is more burdensome for them than for the many millions of others who must pay taxes on income used for housing expenses.”
“A desire to assist disadvantaged churches and ministers is not a secular purpose and it does not produce a secular effect when similarly disadvantaged seculars organizations and employees are excluded from the benefit.
“If a statute imposed a tax solely against ministers (or granted an exemption to everyone except ministers) without a secular reason for doing so, that law would violate the Constitution, just as §107(2) does.”
Some, during the bill’s 60-year lifespan have claimed that it was necessary to eliminate “discrimination” (aka “persecution”) against preachers who don’t live on church property…which is like saying that not handing out free cigarettes to convenience store employees is “discrimination” against those who don’t get an employee discount from Phillip Morris. Crabb stated:
“Under defendants’ view, there would be no limit to the amount of support the government could provide to religious groups over secular ones.”
She also noted that this perspective was not without precedent; in 1984, the Treasury Secretary wrote a memorandum advising repeal of the exemption, because
“There is no evidence that the financial circumstances of ministers justify special tax treatment.”
So, this seems to be a valid decision…and it will no doubt be subject to a fair degree of Ted-Cruzian outrage as it goes to the Supreme court for appeal. Which it almost certainly will. The Treasury’s 1984 recommendation was thrown out under pressure from the clergy, and today’s Teabaggers are no less rabid than any televangelist. They’re also no less fans of martyrdom, and no less likely to scream “PERSECUTION!!” They might not know how to exist WITHOUT doing so.
Even so, the fact that the exemption ruling made it this far is a good sign of a change in the winds, and a victory for those who truly believe in the concept of “separation of church and state.“
NEXT STEP: Revoke the tax exempt status of any organization (RELIGIOUS OR NOT) that publicly espouses or supports a political agenda or candidate. If you’re going to use your pulpit to advocate for political change outside the four walls of your church, the taxpayers aren’t subsidizing your message.