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Holy taxation!

Posted on 10/10/2006 18:49 PM | Link | Post Comment

I'm far from a Biblical scholar, but a story in Tuesday's New York Times sent me scripture searching.

Even the most religiously lapsed among us knows this one (recounted in the gospels of St. Luke, chapter 20, verses 21-26, and St. Mark, chapter 12, verses 13-17), about how, as the Pharisees were trying to trip up Jesus, they delved specifically into that touchy area where church and state intersect.

It's one of my favorites, since the topic of taxes is specifically addressed and is the where JC issues one of his most famous pronouncements:

"Render to Caesar the things that are Caesar's, and to God the things that are God's."

Oh, if it were only that simple.

Under the oft-invoked First Amendment, the right to practice (or not) religion is a sacred concept. But as religions and their ancillary manifestations have grown over the years, this Constitutional right is causing all sorts of tax headaches.

A tax tale of two neighborhoods: One such problem is detailed in the NY Times' look at two retirement communities in the South Bend, Ind., area. They are almost identical in amenities, according to the story, but one, Holy Cross Village, is run by the Brothers of Holy Cross, a Roman Catholic religious order.

The Brothers believe that the Village is a charitable activity rooted in its pastoral mission to serve others, specifically the elderly in this case. Most on the St. Joseph County Property Tax Assessment Board of Appeals disagree.

So do the residents of Hermitage Estates, the similar retirement community where residents pay an average of about $2,300 per unit in property taxes. And it's safe to assume that other property-tax-paying South Bend homeowners also are on the county's side, since they'll have to make up the taxes that Holy Cross Villagers, if their effort is successful, will avoid on religious grounds.

Yep, a lot of folks are muttering "Oh, God" or worse name-in-vain utterances over this case. And they've got a lot of company across the country.

Again per the Times, every state offers religious organizations some type of property tax breaks. Nationwide, tax-exempt financing for religious organizations came to around $20 billion between 1995 and 2005.  And Congressional records indicate that income tax breaks for myriad clergy men and women cost just under $500 million a year.

That's part of the reason that some county and state officials are beginning to look more closely at tax breaks afforded religious groups and just how such organizations meet the standards to claim them.

So, too, is the IRS. Currently, the federal tax collector is examining churches (and charities) that venture into political activities under the guise of religious endeavors.

Church city-states: Then you've got the plethora of megachurches. These institutions have, in many cases, gone far beyond mere houses of worship.

Some have become almost self-sustaining small cities, with eateries and day-care faculties and entertainment offerings and all sorts of retail shops. These places, to my secular eye, are more akin to businesses than blessings.

Heck, there are even companies -- Church Growth Today and Kingdom Venture Partners -- that make money off of helping churches grow. And PastorPreneur (the book and e-zine) encourages church leaders to act like entrepreneurs, to "think outside the box" and establish strategic partnerships with nonchurch groups.

That's smart marketing. And good salesmanship shouldn't be restricted to purely lay endeavors. But I must admit that when churches start expanding well beyond their original mandates and, in many cases start raking in big bucks, I begin to wonder if perhaps they should be sharing more than just their messages … like maybe, some of that tax-protected money.

Isn't one of the principles of most religions to be a good and caring neighbor? But by depriving a community of a chunk of tax collections, tax-exempt entities are using resources without paying their fair share. Maybe it's time that changed.

The First Amendment simply says "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."

Breaking out the tax breaks: Legal experts are obviously reading that "free exercise" phrase more literally than I, but I don't see how collecting taxes on church-owned but in reality secular programs keeps a religious group from its primary goal and Constitutional right of worshiping its chosen deity.

Take, for example, a church-run day care center. Despite the recent film Jesus Camp's look at kids and Christ, even a church-employed childcare worker can't convert a toddler, regardless of how many hymns he or she sings to get the child to nod off at nap time. All the ministering in these cases is purely nonreligious, in the form of handing out cookies and wiping noses and the like.

So why should a church-affiliated operation get a tax break that a nonreligious one doesn't? They do, though, and such tax-exemptions help churches and their subsidiaries thrive, sometimes at the expense of non-affiliated members and businesses.

Perhaps it's time to rethink that Caesar delineation. A religious group could retain its tax-exempt status for its core purpose, i.e., worship. A special component -- the Praise the Lord of Your Choosing Foundation of the 82nd United International First Church of Anywhere -- could be established to operate as a tax-exempt church.

But the rest of the church's business would be treated like any other business, taxes and all.

God and college professors: A somewhat related item comes via Tax Prof, which reports on a study that finds that university educators are not as godless as many think. The majority of respondents said they  "have no doubt that God exists."

The survey also breaks down the religious leanings by academic area, with 63 percent of those teaching accounting being firm believers. It notes, however, that tax professors were not specifically questioned.

You can see the TaxProf synopsis, with links to the full study and another article on it, here.

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