A University of Tampa sociology professor recently published a report in which he estimated that the United States is losing $71 billion per year because of its automatic tax exemptions for religious institutions.
Though $71 billion is a lot of money, there’s good reason to suspect that the figure is actually higher, because churches simply aren’t required to provide the information we’d need to find the exact number. Shouldn’t churches be held to the same standards as all other tax-exempt organizations?
To receive tax exemptions, all nonprofits must file an annual 990 form that provides the Internal Revenue Service an itemized report of how their budget was spent. All except churches, that is.
For religious institutions, the 990 is waived, allowing them to spend their money how they wish; whether that be running a soup kitchen or constructing a new Jesus I Need a Latte Café in the mega church lobby.
Some believe churches deserve automatic tax exemptions based on the idea that they are mainly charitable organizations that provide significant social services to their communities; services that the government would have to provide were it not for churches. But is that true?
According to the charity evaluator nonprofit CharityNavigator.org, any organization that spends less than 33 percent of its budget directly on charitable programs is grossly inefficient.
In 2010, the secular American Red Cross spent 92.1 percent of its annual budget on charitable works and 7.9 percent on operating costs.
That year, the United Methodist Church spent only 29 percent of its budget on charitable causes; its remaining $214 million went to operating expenses.
Of course, churches don’t operate in the way that many other nonprofit organizations do.
While the Red Cross spends most of its budget on directly addressing the physical needs of people, a church spends most of its budget on operating costs such as hiring pastors and other staff who through worship services, youth programs and counseling also address the needs of people.
But just some people – the people who happen to go to that church.
In any case, these activities are not charity, they are part of a job description. The gratification clergy get from their work may transcend their bank account, but it doesn’t negate the fact that they’re getting paid to do it.
Why should any taxpayer be required to pick up the financial slack left by religious institutions while they tend the spiritual needs of their limited congregation and do little else that is definitively beneficial for the general population subsidizing their work?
In the 1786 Virginia Statute for Religious Freedom, Thomas Jefferson called the idea of compelling a citizen to pay for the propagation of opinions he disbelieves “sinful and tyrannical.”
It is highly unlikely that nonreligious taxpayers will get a complete break from subsidizing churches any time soon. But requiring churches to file an annual 990 to retain their exemptions is something that very well could be done by the IRS in my lifetime.
Simple accountability could force them to show that they are as indispensable and deserving of tax breaks as they claim to be, or push them to become so.
Or perhaps they would fail to live up to the standards set for every other nonprofit and lose their exemptions, in which case they would still be perfectly free to do errands for God, as long as they toss their share of money into Uncle Sam’s hat along the way.
