Should Churches Be Required To Pay Taxes?

There are debates that seem to reappear consistently as the struggle continues with both sides. One of these debates revolves around the idea of Churches paying taxes.

Under American law, churches are (generally) exempt from state, local, and federal tax. This law was passed in 1894 and remains in effect today. People have since questioned this law as most other landowners have to pay some sort of tax. Why has this become such a debate?

Well...it mainly boils down to the separation of church and state powers.

America has always operated under the notion that church and state (federal) powers should be separated to ensure there is no conflict of interest. For citizens who believe that churches should pay taxes, this is their main reason.

By churches not having to pay taxes, it leads people to believe that churches receive special treatment from the IRS as opposed to other non-profits. This special treatment would be unconstitutional, and it does not show the correct use of separation of powers.

Another argument for the pro-tax crowd consists of tax exemption being a privilege, not a right. A large portion of non-profits are deemed tax-exempt because the sole purpose of many of these organizations is to aid people in some fashion rather than turn a profit. With controversy surrounding churches in recent years, it is easy to see why people feel that churches can utilize this to their advantage.

Churches being tax-exempt plays into the idea that religion is upheld to such a high standard that taxation is not necessary. That can lead to a dangerous path as history has seen the rise of religious extremists who manipulate people through fear of a higher power.

Now, let's take a brief look at why churches should still be allowed to operate tax-free. One of the main reasons people point to in this argument is that requiring churches to pay taxes would violate the Free Exercise Clause of the First Amendment. More specifically, paying taxes would endanger the free expression of religion.

People point to the case of McCulloch v. Maryland, in which the famous quote: "the power to tax involves the power to destroy." If the church happened to be late on a payment, the punishment could be deemed unconstitutional and a direct violation of the first amendment.

While this argument involves lots of legal terminologies, it is a fact that this would violate the first amendment which is the main reason churches have been tax-exempt for over a century.

Another valid point for this argument is having churches be tax-exempt upholds the separation of Church and State. Since the state is so little involved in the church's affairs, it allows for separation of power which is a foundational element of the US constitution.

This exemption creates minimal involvement for both parties and allows religious institutions to operate freely without fear of taxation.

With much debate heating up over this topic, it appears nothing will change in terms of Churches and taxation. There would need to be a significant event in order for change on such a massive scale to occur.