Give Me That Old-time Exemption

America's Outrageous Tax-Free Religion...

The income tax has made more liars out of the American people than golf has.

— Will Rogers

Render unto Caesar that which is Caesar’s…

— Jesus of Nazareth

During the 2012 presidential election, the principal debate was largely about debt and taxes, and most of that debate — as Paul Krugman, the Prophet of Princeton, pointed out at the time — was being conducted by the people who knew the least about either. But conspicuous by its absence, because no politician had the guts to mention it, was that manque emperor’s clothing, the billion-dollar churches of America and their blanket exemption from paying taxes.

Stop anybody on the street and ask them why such is the case and you’ll likely hear that religions are (and should be) tax-exempt and subsidized because they do charitable work, feed third-world starving kiddies and wash the feet of the poor. Recent research has revealed that the actual charity going on in most money-changing temples is almost non-existent.

Recently active in this interesting field has been the The Council for Secular Humanism: viz, “How Secular Humanists (and Everyone Else) Subsidize Religion in The United States,” by Stephanie Yeager. You don’t have to be a secular humanist to play. Yeager leans heavily on a study published in the June/July issue (2012) of Free Inquiry, written by three academics, headed up by Ryan Cragun, a sociology professor at the University of Central Florida in Tampa.

In a comprehensive survey of American church organizations, the U. of Tampa team compiled a spectrum within America’s churches of “direct charity” performed and paid for as a percentage of total church revenue. Their results ranged from an unsaintly 0.7% for the Church of Latter Day Saints, to 23% for the Methodist Church.

(Parenthetically, I’m fully qualified to talk about the Mormon Church. My great grandfather, Robert Golding, trekked all the way from Illinois to Salt Lake City as one of the made-men of Brigham Young’s founding familia. I admit that Great-Grandpa Bob was a bit of a piker. He only had two wives, compared with Brigham Young’s stable, over which I think Brig lost count, and Mitt Romney’s grandfather, who had eight, explaining why he migrated to Mexico to escape those pesky local laws, rather than to explore certain venture capital opportunities, as has been suggested in some quarters. Although I bear no malice, a rumor has it that my great grandpa Robert Golding was later thrown out of the inner cosa by Brigham Young himself for suggesting a minor birth-control device widely employed by Protestants in Ireland and les miserables in rural Quebec.)

The leading charitable church, the method-acting one, wins the non-taxable cigar hands-down for heavy charity, while remaining less than a quarter charitable, although it’s no doubt otherwise pious, if not just shy of Godliness. But if they’re the best at charity beginning at home, it’s clear that NONE of the religions of America are within a loud hosannah of the unassuming Red Cross, for example, which doesn’t exactly enjoy a spotless PR image, and yet manages to devote 92.1% of its revenue to the kind of work the churches are presumably in business for, and are therefore non-taxable.

Just what do the religions of America do with their dough? I’m talking about the river of revenue earned by donations (personal, corporate, from foundations, and, of course, governments), gambling operations, such as bingo and raffles (including the free gifts of prizes), volunteer labor (compare the nil cost of a choir compared with that of a rock band), direct government subsidies as faith-based initiatives (which would make British Petroleum or ethanol producers blush) and related business activities as varied as the ingenuity of real-estate-minded trustees can come up with? Not to mention the sales organizations within TV-produced megaliths such as The Hour Of Power and Rick Warren’s empire.

Well, they do stuff. Missions and Services, for one. That includes the staging of what they call worship, which has a lot to do with platitudinous lectures by mediocre ministers getting their inspiration from canned sermon textbooks which they preserved from their seminary days.

But some of them are real entertainers, such as Bishop Jakes in Orlando. He’s a riot with his repetitive, emotional, humorous delivery, his walking up and down in a two-thousand dollar suit, while the audience erupts over every sweaty punch-line, which juxtaposes contemporary patois with biblical diction. I rank him right up there with Chris Rock and D.L. Hughly.

If you’re of that ilk that believes that churches should be tax-exempt because of their charitable work, the U. of Tampa crew has a modest proposal: those pious organizations should separate their normal religious hocus-pocus, fellowship and outreach, (love that word – the opposite of ingrab) and the financing thereof from their charities, their doing-unto-others stuff and ITS financing. As Yeager puts it, the non-footwashing, run of the mill Sunday morning proclivities should be treated like “civic leagues or sports clubs or any other volunteer organization that exists for entertainment or the benefit of its members.” Such groups, in less sanctified buildings, and, in fact, anti-religious clubs such as humanists, atheists or church drop-outs, are not exempt from paying taxes. Nor are they subsidized by the kindly government with taxpayers’ money, just like Monsanto farms and billion-dollar oil companies.

The Tampa team’s purpose was to estimate just how much the federal and state governments in the U.S. pony up for religions of whatever orientation via tax-exemption or breaks or other benefits. And, naturally, to arrive at the figure the providers of all that tax the politicians are currently wrangling over are contributing through such total subsidies.

Because churches pay no taxes on the donations they receive.

  • Religious institutions pay no property taxes, though those taxes (paid by property-owning citizens) go for public services like police protection and firefighting, which also benefit the churches.
  • Religions, though many of them have investments such as stocks, pay no investment taxes, such as capital gains tax on dividend or interest income or capital gains.
  • When buying goods and services, religions don’t have to pay state sales tax.

What’s more, ministers, priests, rabbis and other spiritual practitioners unlike everyone else, can deduct the cost of their housing (mortgages, rent, furnishings and upkeep) from their taxable income. This can be considerable in the case of rich megachurch pastors like Robert Shuler.

The summary of government and public subsidies includes the tax normally paid by donors to other organizations, no income tax, property tax, investment taxes as just noted, sales tax, direct subsidies (faith-based initiatives), related business income, and volunteer labor savings.

So what’s the total tab? According to the Tampa University researchers, the total, which they view as conservative, since some subsidies just can’t be estimated, amounts to a tad over $71 billion. Annually. That’s just the FEDERAL government, and, of course, doesn’t include direct payments such as the concordat the U.S. Government has with the Vatican, along with 177 other world governments, whereby a percentage of GDP is shoveled into the Roman Catholic Church. Why? Just for old times’ sake, because it’s always been that way.

Any politician – from a dog-catcher to the President – would be committing political suicide to suggest it should be otherwise. The corporate lobby in Washington over which everybody is wringing their hands these days, is not a patch on the unseen religious lobby.

To put this into perspective, religions receive at least 40 percent of the subsidy that agriculture does in the United States. And in Florida, where the state government’s budget is around $75 billion annually, the amount of tax revenue lost from subsidizing religious property ALONE averages $2.5 billion or 3 percent of the state budget. The additional revenue would have mostly prevented the $1.1 billion cut to firefighter and police retirement plans and the $1.3 billion cut to public schools, under Governor Rick Scott’s judicious savings to the taxpayers early in his axe-swinging career as Gov.

Ironically, the benefit to religions becomes increasingly irrelevant as more and more Americans are dropping out of religion and the church around the corner — an estimated 5% per annum. Meanwhile, the subsidies increase annually. So it’s increasingly unfair for a large percentage of non-religious Americans (almost 40 percent in some states) to subsidize the devotional activities of the pious.

The whole tax-exempt religious gig is preposterous. But don’t bet your food stamps on it changing. What political mouse would bell this particular cat?

Bill Annett writes four newsletters: The Canadian Shield, American Logo, Beating the Street, and The Oyster World. He can be reached at: Read other articles by Bill.