“All other taxpayers pay more because clergy receive this privileged benefit”
Greg,
Because you are posting on SI, I assume you are a Christian, and because you reference talks with clergy, I assume you are a churchman.
Does it occur to you that if your ideas were implemented here on a nationwide scale, it would raise billions of dollars of taxes on clergy — which would have the net effect of removing billions of dollars from churches, which theoretically would have to raise clergy salaries and take resources away from other ministries?
Does it occur to you that you are advancing the argument that is a sacred cow (no pun intended) for rabid secularists and the separation-of-church-and-state crowd? Why would you want to do that?
My last comment on Social Security: Personally, I take my advice from Worth Tax Service, which the late Larry Burkett recommended as the authority on clergy taxes. My point was that opening the debate in a forum like this on who should opt out is silly, and will only serve to scare and misinform people. If you have a beef with it, or a problem one way or the other, call someone who can help. Don’t misinform a bunch of college kids who may be reading.
Because you are posting on SI, I assume you are a Christian, and because you reference talks with clergy, I assume you are a churchman.
Does it occur to you that if your ideas were implemented here on a nationwide scale, it would raise billions of dollars of taxes on clergy — which would have the net effect of removing billions of dollars from churches, which theoretically would have to raise clergy salaries and take resources away from other ministries?
Does it occur to you that you are advancing the argument that is a sacred cow (no pun intended) for rabid secularists and the separation-of-church-and-state crowd? Why would you want to do that?
My last comment on Social Security: Personally, I take my advice from Worth Tax Service, which the late Larry Burkett recommended as the authority on clergy taxes. My point was that opening the debate in a forum like this on who should opt out is silly, and will only serve to scare and misinform people. If you have a beef with it, or a problem one way or the other, call someone who can help. Don’t misinform a bunch of college kids who may be reading.
Church Ministries Representative, serving in the Midwest, for The Friends of Israel Gospel Ministry
Yes Paul, I am aware that getting rid of the housing allowance would take money out of a churches budget and possibly force pastors to take a pay cut. It might not be convenient but would be fair. And yes, it puts me on the side of the secularists. But in this case, they have a point. There is no good reason for having that allowance apply only to clergy and not to other people.
Regarding SS, it is not even debatable IMO. The IRS guidelines are very straight forward as to who can opt out and who can’t. Publishing their guidelines as I did is hardly misinforming anyone. And it is noteworthy that Crown Financial Ministries agrees with me. Can you provide a link to an article that credibly provides another view on this?
Regarding SS, it is not even debatable IMO. The IRS guidelines are very straight forward as to who can opt out and who can’t. Publishing their guidelines as I did is hardly misinforming anyone. And it is noteworthy that Crown Financial Ministries agrees with me. Can you provide a link to an article that credibly provides another view on this?
[GregH] Yes Paul, I am aware that getting rid of the housing allowance would take money out of a churches budget and possibly force pastors to take a pay cut. It might not be convenient but would be fair. And yes, it puts me on the side of the secularists. But in this case, they have a point. There is no good reason for having that allowance apply only to clergy and not to other people.You have a skewed view of fairness, brother. As noted earlier by me and others, the entire tax code represents a string of illogical and (often) immoral propositions, which date back to the unceremonious means by which a federal income tax was instituted to begin with. In essence, you want us to cut off our nose to spite our face.
[GregH] Regarding SS, it is not even debatable IMO.Good. I was never debating you. I was asking you to refrain from debating. I know from personal experience how misinformation about issues such as this can be thrown around and cause people real harm. If someone needs information, call http://www.worthfinancial.com/ Worth Tax Service — not the tax service down the street that just turned on its neon lights on Tuesday, and not even your favorite professor at Bible college.
Church Ministries Representative, serving in the Midwest, for The Friends of Israel Gospel Ministry
GregH, do you believe the child tax credit is fair, or is it unfair to those who don’t have children?
Do you believe that because of the housing allowance, most (some? many?) pastors are becoming unfairly wealthy off of the backs of others? (I speak as a fool/political liberal.)
I would actually be in favor of some kind of limit on the housing allowance so some pastors can’t be writing off multi-million dollar mansions, but I’m going to assume those pastors are in the extreme minority, and in general I don’t know why anyone would have a problem with the housing allowance.
Do you believe that because of the housing allowance, most (some? many?) pastors are becoming unfairly wealthy off of the backs of others? (I speak as a fool/political liberal.)
I would actually be in favor of some kind of limit on the housing allowance so some pastors can’t be writing off multi-million dollar mansions, but I’m going to assume those pastors are in the extreme minority, and in general I don’t know why anyone would have a problem with the housing allowance.
-------
Greg Long, Ed.D. (SBTS)
Pastor of Adult Ministries
Grace Church, Des Moines, IA
Adjunct Instructor
School of Divinity
Liberty University
Eliminating the housing allowance deduction would not change the pastor’s total compensation at all, it would simply change the amount that is subject to income tax. Nor would such a change impact a church’s budget in any way. Pastors who are not exempt from Social Security pay that tax (but not income tax) on their total housing allowance received already.
The real unfairness with the current structure is the “double dip” that pastors receive. They are able to exclude the housing allowance funds from their taxable income and yet they also receive deductions against the taxable part of their income for interest on mortgages and property taxes paid with the exempt funds. That ought to be changed. It almost certainly won’t be.
The argument that this (or any other) tax break makes others pay more is specious. The government is not limited in its spending by tax revenues—they just print and borrow more money, therefore the notion that the revenue lost must be made up is false. However there is massive room for abuse in the current system. Many people are claiming a housing allowance as ministers who do not meet the occupational definition. The “expenses” that can count against the housing allowance are entirely self-reported, and as a practical manner, never checked.
I’ve worked for two tax organizations that specialized in minsters and ministries, and I’ve seen just about every kind of dodge and complaint imaginable (and a few that stunned even an old cynic like me). I’ve seen housing allowances well in excess of $200,000 with expenses to match. I’ve seen people (try to) claim their clothing, babysitting, and much more as “housing” expenses. As noted by others above, the whole tax code is a mess, and the rules governing pay and tax status of pastors are among the messiest and most arcane in the entire tax code.
The real unfairness with the current structure is the “double dip” that pastors receive. They are able to exclude the housing allowance funds from their taxable income and yet they also receive deductions against the taxable part of their income for interest on mortgages and property taxes paid with the exempt funds. That ought to be changed. It almost certainly won’t be.
The argument that this (or any other) tax break makes others pay more is specious. The government is not limited in its spending by tax revenues—they just print and borrow more money, therefore the notion that the revenue lost must be made up is false. However there is massive room for abuse in the current system. Many people are claiming a housing allowance as ministers who do not meet the occupational definition. The “expenses” that can count against the housing allowance are entirely self-reported, and as a practical manner, never checked.
I’ve worked for two tax organizations that specialized in minsters and ministries, and I’ve seen just about every kind of dodge and complaint imaginable (and a few that stunned even an old cynic like me). I’ve seen housing allowances well in excess of $200,000 with expenses to match. I’ve seen people (try to) claim their clothing, babysitting, and much more as “housing” expenses. As noted by others above, the whole tax code is a mess, and the rules governing pay and tax status of pastors are among the messiest and most arcane in the entire tax code.
Are we discussing the treatment of the “rental value” of living in a parsonage as being taxable income?
[Robert Byers] Eliminating the housing allowance deduction would not change the pastor’s total compensation at all, it would simply change the amount that is subject to income tax. Nor would such a change impact a church’s budget in any way. Pastors who are not exempt from Social Security pay that tax (but not income tax) on their total housing allowance received already.Robert,
Thanks for your perspective. I was simply saying earlier that — theoretically — if pastors in many (small) churches lost their housing allowance deduction, they would have to have their salaries increased by that amount, one way or the other. From that perspective, it would “cost” the church additional funds, assuming they are interested in properly caring for their pastor (not always a safe assumption :( ).
Church Ministries Representative, serving in the Midwest, for The Friends of Israel Gospel Ministry
[DavidO]These were my thoughts…let’s give ‘em as many breaks as we can. The Lord knows that most of our IFB churches don’t pay their pastors (and wives) as much as they could earn elsewhere…esp if they put in as many hours…and certainly with less “heartache”. Sometimes working with brooms or cars or whatever can be so much less demanding than trying to minister to people.
Why would we want to take a tax break away from a group that, in general, is underpaid for what they are (or in some cases, ought to be,) doing?
But Susan, I disagree about the self-employed and not working all the time, all over the house, etc. Certainly that depends on the nature of their business. I agree with Greg that some do work all the time or are available all the time.
However, I’m all for giving pastors a break whenever or wherever we can give them one…disclaimer…have two sisters married to pastors and one brother who is a pastor and my dad was a pastor.
This is a good news for us tax payers.Volunteer Income Tax Assistance (VITA) program is a great help.Thanks for this article.But then, we should also be very careful in handling case like this.Because nowadays there’s lot of tax fraud hanging around.Meanwhile I heard that the second largest tax preparation service in the country, Jackson Hewitt, is filing for bankruptcy even though it is only for the purposes of restructuring. Hewitt and other preparation firms were hit hard by regulations which were made concerning tax refund loans. New requirements made them impossible to get funding for. Refund anticipation loans are often lumped in with payday loans as being a scourge of the poor. I found this here: http://personalmoneystore.com/moneyblog/2011/05/25/tax-loan-jackson-hew… Loss of tax loan financing causes Jackson Hewitt bankruptcy, personalmoneystore.com/moneyblog .
Discussion