Why Tax Exemptions for Religious Institutions Should Continue

by Amy Hall

Since Time is saying “Now’s the Time to End Tax Exemptions for Religious Institutions,” it’s important we understand why our government has not taxed religious institutions in the past. I recently explained that one reason for non-profit tax exemptions is that “the power to tax implies the power to destroy” (McCullough v. Maryland, 1816), and our government has not been given the power to govern religion. But there’s more to it than that.

Al Mohler discussed this issue on Monday’s episode of his podcast, beginning with the charge that the government is wrongly “subsidizing” religion through tax exemptions. Not only are tax exemptions not logically a subsidy (after all, it’s not the government’s money the churches are keeping), they’re also not legally a subsidy, as Dr. Mohler explained. From the podcast:

The key statement on these issues was made by the Supreme Court of the United States in 1970, in the case Walz versus Tax Commission of the City of New York; it was a stunning 8-1 decision. Writing for the majority, Chief Justice Warren Burger made very clear that a tax exemption is not a subsidy; that was affirmed by other justices in concurring opinions. A subsidy would be the transfer of tax money to institutions. That’s not what’s going on here…. Rather, the tax exemption is granted with respect to institutions the government does not feel that it has the right to tax on the one hand and on the other hand, institutions that it believes are essential to the Commonwealth and to the commonweal, to the well-functioning of society.

It’s in our best interest to prevent our limited government from taking money away from organizations that are using that money to build up our communities. Local organizations know the people they’re helping, they can give more personalized care with less bureaucratic waste, and those who receive the help do so in the context of relationship, which means gratitude and accountability. Whenever care can be given by the people closest to those who need help, that should be the preferred method of helping, not government…


Stand to Reason | Why Tax Exemptions for Religious Institutions Should Continue