Tax exemption in the crosshairs

Even before the Supreme Court’s decision making same-sex marriage the law of the land, worry spread that the government could crack down on churches whose pastors and members speak out against homosexuality. New York Times columnist Mark Oppenheimer proposes a radical solution: End the IRS tax exemption for nonprofit organizations altogether. In a Time magazine online column published two days after the Supreme Court ruling, he made the case for the government taking what he called a fairer approach toward religion. Others, such as Albert Mohler, president of The Southern Baptist Theological Seminary, disagree, saying the tax exemption protects the separation of church and state. I spoke with Oppenheimer about his controversial position.

First off, I think it would be helpful if we got your opinion of the Supreme Court’s ruling on same-sex marriage. I’m no legal scholar. My degree is in religious studies. I support same-sex marriage in principle. I think that it’s certainly good for society. I support marriage. I think it’s an institution that is well-extended to as many people who want it as possible. So I was heartened, but I haven’t read the legal reasoning carefully, nor am I particularly qualified to weigh in on that.

Many religious people fear that if churches speak out against same-sex marriage, somewhere down the road there could be a movement to take away their tax-exempt status. The founders gave us the First Amendment to protect the church against government intrusion, and taxation is a huge intrusion. Don’t you see a constitutional argument that churches should never be taxed? I actually side with a different argument of a lot of conservatives and some progressives. … Rather than have the government decide who is a church and who is not, which is what the IRS currently does, you just treat all people and all institutions the same. If you own a building, you pay taxes on it. The idea that some groups get to avoid those taxes and some don’t has given rise to enormous government intrusion in the form of the IRS deciding whether you merit the religious exemption or whether you don’t. It’s actually very constant with an old-fashioned idea, protecting churches from government intrusion, to say that you don’t ask who is a church and who is not. You just send out a tax bill.

This controversy really started back in the 1950s with the Johnson Amendment, which prohibited churches from endorsing candidates. Should churches and pastors be allowed to say anything they want, political or otherwise? Absolutely. I couldn’t agree more, which is one reason why the exemption has proven so poisonous. In order to keep their exemptions they have to pretend that they don’t have political views or that they don’t endorse particular candidates. It forces pastors into this dishonesty, where they go up on the Sunday before Election Day, and instead of just saying, “Vote for Obama,” or, “Vote for Romney,” they give their worshipers issue brochures, which say, “Well, if you happen to agree with these 35 check marks, this is the person you’d vote for, but if you agree with these zero check marks, this is the person you’d vote for.” It makes the church look ridiculous. I imagine it’s one of the most absurd days of the four years for every pastor, and it’s a position that they force themselves into by seeking tax exemptions.

What you’re proposing is not likely to happen without a major political battle. In the meantime, don’t you think churches are in danger of losing their tax-exempt status if they speak out against same-sex marriage? I think you’re wrong on both counts, with all due respect. First of all, it’s not just unlikely to happen without a political battle. It’s really never going to happen. Nobody has the political will to make this happen, which is a shame because where churches own a lot of property and are exempt from local taxes, the schools suffer. The salaries of policemen and firemen suffer. The public parks suffer. Everyone suffers.

The second thing that I would say is there’s been no governmental will to extend the Bob Jones ruling, which stripped a university of its tax exemption for opposing interracial dating. There’s been no political will or judicial will to extend that to any other kind of discrimination. For example, there are hundreds, if not thousands, of religious organizations in the country, colleges, churches, etc., that practice what the government could call sex discrimination, according to the traditions of the religion. Not allowing female pastors, for example. There has been absolutely no attempt to meddle with the tax exemptions of any of those organizations.

What do you think would happen if churches lose their tax-exempt status? How would things change? First of all, I want to make it clear again that I was talking about tax-exempt status not just for conservative churches or liberal churches, and not just for churches at large, but also for the National Football League, which is a nonprofit. Also, for Planned Parenthood, which is a nonprofit. The National Rifle Association, which is a nonprofit. …

But you want to talk about religious institutions. I’m happy to. It’s what I write about. There are two kinds of exemptions we’re looking at here. One is the tax deduction that you and I can take for the money we give to our church, or synagogue, or mosque, or whatever. That’s a federal law. If the federal government got rid of that, of the ability to deduct that, then I don’t know. ... Let’s say I give $1,000 a year to my synagogue, and, all of a sudden, I don’t get $200 of it back from the government. Do I give less? Some people would. Some people would give more to make up for it. Some people would give the same because they just write the check. Of course, all the people who don’t itemize deductions would end up giving the same, because if you’re poor and you don’t itemize deductions, but you put 10 bucks in the hat every Sunday, it’s totally immaterial, because you’re not getting it back from the government.

It’s unclear, but the maximum thing that would happen is the churches would lose some percentage, under 10 or 20 percent, I’d think—under the amount of the deduction that people get back from their coffers. But I think it would be pretty trivial. I think it would be pretty de minimus.

The more worrisome objection from people who want their churches and synagogues to survive is if they had to start paying local property taxes. In that case, again, it’s not really an issue for the poorest churches, which tend to rent. They don’t have a property tax burden. It’s the biggest issue for large megachurches that own very, very valuable property. I think the answer is, if they want to have very, very valuable property and they want to offload the tax burden of that to other citizens of the city, that’s not fair. They’d have to cough up a little bit more.

Listen to Jim Henry’s conversation with Mark Oppenheimer on The World and Everything in It.