When we talk about taxes we generally hear the arguments of paying your fair share or of it being our price for civilization. While all those likely reading this know that to be a crock, the part that people usually find themselves agreeing on is the notion to tax the church. The church is usually used in a general sense to refer to the earnings and income of all religious institutes, but due to North America’s Judeo-Christian origins, the church is the standard argument.
The argument goes that because of the massive amounts of land they own and income they and their pastors have that they should not be tax exempt. The prevalent idea is that somehow the state would do better with those funds and thus we should tax the church and other religious organizations to obtain those funds. Now I know I’m definitely not the first to point out how bad of an idea this is in libertarian circles and abroad, however, this is an argument that no matter how many times it’s shut down it keeps creeping its way back into common discourse.
Let’s start with the obvious part. Church staff do pay taxes. That’s right. The “Mega pastors” that are usually brought up like Joel Osteen have to file taxes for their income like any other citizen. So that part of the argument isn’t just poor, it’s flat-out incorrect. Next is the church itself and it’s holdings. They do not pay taxes on their earnings or property, that much is true. The reason though has nothing to do with their religious status. The reason we don’t tax the church is that they are both legally and effectively a charity. The money they pull in is in the form of donations and tithes are paid to keep the church operating to perform their services of spiritual aid and general outreach to the community. For example, The Economist roughly calculated that the church had spent over $171 billion in 2010 globally, the majority of which went towards health care and other forms of outreach.
Next is the foundational issues. If we decided to tax the church that would, in turn, lead to the church being unrestrained in its participation in our politics. If we were to tax the church they would then be in need of representation and subject to all of the positives and negatives that come from being a tax paying entity. Do you really want the church politicizing themselves along partisan lines, forming super PACS, and making donations to political campaigns? We can’t have taxation without representation of some form, and this would open the doors for the church and other religious organizations to embed themselves formally within the state and our political foundations. Even those out there who may disagree with the church itself can hopefully agree that that would be a terrible idea.
As libertarians, we shouldn’t be advocating for additional entities to be taxed. Saying we need to tax the church is no different than saying we need to tax any and everyone. Even for non-libertarians, this argument that we need to tax the church would only realize most of your fears of having the separation of church and state dissolve.
You can read more from Killian Hobbs on Think Liberty here.