"Stringent enforcement of 501(c)(3) could generate up to $16.75 billion in additional annual revenue - almost enough to fund NASA"

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Jay's picture

Jim wrote:
Contrarian view (with initial observations):

  • I hope the 501(c)(3) provisions continue (for many reasons ... among which I enjoy the tax deduction for for charitable contributions!)
  • I hope the property tax exemptions for church properties continues
  • I hope (although as I indicated earlier in this thread I feel this is the least logical / defensible) the clergy housing allowance continues

If the US church needs this .... we are indeed the weakest of the world's churches! And if this is so, losing these government 'benefits' are the least of our problems!

Point taken, but let me rebut - how adversely would your church be affected if you were suddenly forced to comply with state, property, and sales taxes?

Here in New York our sales taxes are pegged at 8.125%.  So to buy paint and equipment to re-do a classroom, we may currently be able to get away with spending $100 (primer, brushes/rollers, and paint), but that figure would now go up to almost $110.  That's not too huge...but obviously, the larger and more expensive projects become more out of reach when you're paying almost 10% more.  When you combine that with the potential revocation of property taxes here in NYS for religious organizations (which HAS been discussed on occasion in Albany) - Property valued at $500,000 (which is not unreasonable for the amount of acreage our church owns) - would be an additional hit of approx. $9K/year according to one website I checked (www.zip2tax.com).  That's a significant new addition to our budget. Nor have I touched on the ever-popular $.674/gallon levy on gasoline as well.  It may sound like not a big deal, but if you start looking at the finances, these "minor" changes add up very quickly.  I know, because I've discussed it with our pastor and the chair of the Deacons/Elders board this year.

Yes, New York is not the most business friendly state out there, and yes, the cost of living here is exorbitantly high, but to assume that everything would be OK because they're only looking at tax enforcement seems to be...naieve.  You really think that the government will be happy to take just income taxes the go-around after these reforms get passed?  Especially with state departments demanding ever more money to fund their programs and agendas?  Maybe it's not a big deal in Minnesota, but the ramifications here in NY are serious and long-lasting.

"Our task today is to tell people — who no longer know what sin is...no longer see themselves as sinners, and no longer have room for these categories — that Christ died for sins of which they do not think they’re guilty." - David Wells

Paul J. Scharf's picture

Let's keep in mind, though, that the reason these tax incentives were put in place in the first place is not because the church needs the government's help to survive financially. Rather, the government was reinforcing the idea that it needed the churches' help to survive societally.

These deductions were also safeguards to prevent the most productive citizens from paying twice for the same services. In other words, if a fire breaks out at the church, the people who call the firefighters have already paid for that service on their own taxes. They didn't need to pay again.

Because we have freedom of religion, not a state church, ALL churches get these benefits. Thus, to argue that the benefits are evil because they also apply to false teachers is a red herring, in my opinion. Should we desire a totalitarian state because it would squash false teaching?!

Church Ministries Representative, serving in the Midwest, for The Friends of Israel Gospel Ministry 

Pastor Doug H's picture

I can see the day coming when several things happen:

1. More and more taxes changed to fees to catch the tax-exempt (fire fee for example)...

2. Amount of land that is tax exempt...parsonage and 2-3 acres of land max for church to sit on, but nothing more tax free

3. Pastor's that buy their own home the HA will disallowed.  The argument will be if you can afford a home, you don't need an extra tax break.  Whereas churches that provide parsonage in close proximity to the church will still be allowed a PA. (interestingly today if you're ordained and required to live next door you pay SS taxes on FMRV, but if you're not ordained and required to live next door-sexton-you're not taxed) 

4. Pastors who take a vow of poverty (most just don't want to pay taxes) will not be allowed to dip into their wife's SS/Medicare at retirement age.  and/or a cap will be placed on the amount of total income (fringe benefits included) allowed, before you loose you "vow of poverty". 

Steve Newman's picture

It is sad to see one more area of advantage the government shows toward churches.

Is it needed? God can/could provide, but for pastors (like myself) who do use the housing allowance and are involve in church rebuilds or small churches, it would be a challenge. I find the callous way that some are speaking of bi-vocational pastors in this thread insulting. That pastors are taking a "vow of poverty" just so they can dodge taxes is idiotic. I don't know of any pastors in our situation who are just in it for the tax free benefits. First of all, if they are. they shouldn't be in the ministry. Second, we don't do this for the pay, in spite of the Jim Bakker's, etc.

The housing allowance is not just for housing. It is for daily expenses, travel, etc. We own our home so we have equity and are able to be moved by the Lord if necessary. We also own our home to decrease the expenses needed to help our church invest in growing the ministry. We bought a lower-priced house so we could pay it off and not burden the church.

Does the government have the right to change tax law? Sure. Will it hurt God's work? Absolutely. But so do lots of other thngs.

Kevin Subra's picture

I believe the foundation for not taxing churches or their employees was an issue of freedom of religion, not giving religious entities special financial breaks. The power to tax is the power to control. Once the government has the right to tell you what you must pay in taxes, it has the power to control what you say and what you cannot say.

The housing allowance issue is an appendage of this. Whether it stays or not is really not the issue nearly as much as it is the preventing of the government in controlling religious institutions. (BTW, military officers also get the same housing allowance. It is not just a religious exemption.)

For the Shepherd and His sheep,
Grateful husband of a Proverbs 31 wife, and the father of 15 blessings.