Tax breaks for places of worship: Weighing the pros and cons of implementing legislation

Photo courtesy of Blake Israel

As the votes come in on many hotly debated issues, we wanted to use this week to focus on a topic that may not be as present in this year’s election cycle, but is still important — the question of whether places of worship should be tax exempt.

Before we even dive into the discussion, it is important to recognize that the definition of what constitutes a place of worship, for tax purposes at least, is very vague. 

This point is exemplified by Our Lady of Perpetual Exemption, a legally recognized church created by comedian John Oliver in 2015 solely to prove the point of how easy it was to create a church with tax exemption status. Oliver created and disbanded the church within the span of several months, showing how easy it was to gain the benefit of tax exemption.

However, the definition of a church is also increasingly broad since it covers such a wide range of places of worship that serve a very diverse group of communities. Because of this, it is difficult to come to overarching conclusion statements that would suit a variety of churches. 

For example, many may point out that larger places of worship have been very visibly shown to operate for profit and consequently should experience the same government oversight as a business. However, this does not account for countless other smaller places of worship that help support impoverished communities or religions that do not place a focus on monetary transactions. 

In that same line of thought, it may be easy to offer tax exemption to places of worship that can be shown to contribute to the common good. This may seem like a clear cut solution: we provide churches with the same tax exemption benefits as non-profits, only when they have been proven to act like one. However, this highlights the important question of how we would measure the positive impact of an organization on the community.

Placing the government in a position to judge which organizations have made a significant contribution to the public good allows the government to yield tax exemptions like a form of approval, blurring the line between church and state and easily allowing for discrimination. 

Moreover, it puts places of worship that may serve lower socioeconomic communities or organizations that do not ask for donations in a position where they may be shut down due to an inability to meet tax requirements. 

There are so many facets to a place of worship that we at the Technique may not even recognize factors that could be vital parts of the conversation. 

In light of this, we encourage transparency with finances in places of worship and if taxation is the decided upon path, we believe that a method of progressive taxation may be useful. Progressive taxation could be more dynamic, rather than concrete. Although not the perfect solution, we believe that a progressive tax could be one possible way of accounting for the financial differences between various places of worship.

Additionally, by having increased transparency about the finances of places of worship, we hope to at least provide government oversight in preventing malicious financial behavior. 

When faced with a question laced with as much nuance as the question of exempting places of worship from taxation, we think the best option is to stay away from conclusive, one-size-fit-all solutions.