A federal district court has ruled that the so-called parsonage exemption, which shields from federal income taxes the value of housing provided by a church to its pastor, is unconstitutional.
The Freedom From Religion Foundation has won a stunning victory in the United States District Court For The Western District Of Wisconsin where Judge Barbara Crabb has ruled that a substantial tax benefit enjoyed by many thousands of clergy – ministers, priests, rabbis, imams and others – is unconstitutional. Code Section 107(2) provides that the gross income of a “minister of the gospel” does not include:
the rental allowance paid to him as part of his compensation, to the extent used by him to rent or provide a home and to the extent such allowance does not exceed the fair rental value of the home, including furnishings and appurtenances such as a garage, plus the cost of utilities.
The Christian terminology, lack of gender neutral language and brevity indicate that this has been part of the Code for a while.
Since the rest of us are obliged to offset the government’s lost revenue, the exemption amounts to a compulsory, de facto public subsidy, regardless of individual beliefs. When local property taxes are added to lost state and federal income taxes, studies place the lost revenue between $71- and $83-billion.
Now, the argument for a public subsidy, albeit indirect, generally rests upon the claim that churches provide community services that the public would otherwise provide — soup kitchens and youth programs, and such. One wonders, then, why churches are opposed to being expected to file the annual IRS-990 form completed by other not-for-profits, so that the public can investigate whether that’s true.
The salary of the president of the United Way, and that organization’s receipts and disbursements, can be learned by anybody with an Internet connection; just go to GuideStar and look it up. But not only do religious not-for-profits not have to provide that rudimentary public accounting, a great many punish their own members for trying to learn that information.
“HALF of America,” Rick Warren once tweeted, “pays NO taxes. Zero. So they’re happy for tax rates to be raised on the other half that DOES pay taxes.” Not only was he wrong on the facts, the tweet was exactly the brazenly hypocritical dishonesty that knowing people expect from Holy Men. It was Rick Warren, after all, who famously sued the IRS over — this is true — its doubts about his $70,000 annual housing allowance.
In 2002, the IRS attempted to charge Warren back taxes after he claimed a housing allowance of more than $70,000, a federal court case he eventually won but led to Congress clarifying the rules for housing allowance. The allowance is limited to one house, either the fair market rental value of the house or the money actually spent on housing.
Apparently, Warren aims to remain among the presumably odious, and fortunately mythical, 50% who contribute nothing.
California, by the way, exempts churches from paying property taxes — so Warren’s colossal Saddleback campus gets free fire and police protection, and Sunday morning traffic control, too.
Religion in America in down-shifting; everybody who pays attention knows that. Estimates vary, but there is widespread agreement that on the order of 5000 churches close every year. That isn’t just rural crossroads churches, either. A few years ago, Robert Schuller’s garish Crystal Cathedral collapsed under an avalanche of debt, mismanagement, and declining revenues. And First Baptist Church, Jacksonville, laid-off several people, and reduced work hours for several others, just last week.
So time is going to end that subsidy, albeit slowly, whatever happens when the case is appealed.
The subsidy that thinking taxpayers ought to want to see ended right now is the property tax exclusion, which allows churches to occupy large tracts of valuable real estate without contributing one dime to their communities. Right here in Youngsville, for instance, there is a Baptist church that occupies about 25-acres of valuable frontage on the main road into town. It preaches Young Earth Creationism; that good, decent, godly people are always prepared to betray family and friends for the glory of its sewer-god; that the good is ‘brokenness’ — the utter loss of self-interestedness and self-direction; the implacable evil of something called the ‘homosexual agenda;’ and flirts with Dominionism, which when acted upon is a variety of sedition. By any sane reckoning it blights the community and imperils its children and their future — and the prevailing tax laws oblige every taxpayer in the county to indirectly subsidize its serial stupidities and indecencies.
Early in America’s history, the churches tried to exact a compulsory tax dedicated to their support; they didn’t get it in the form they wanted, but they did get it — and the sooner it ends, the better off we’ll all be.