Separation Anxiety
Long time readers of this blog know that I'm no fan of the deficit. In thinking through how to get it down, I came up with a source. Get rid of the tax-excemption for churches. Several reasons for this.
One, while the origin lies in the "separation" clause, it actually brings the church closer to the government. Two reasons. One, it amounts to a massive subsidy to churches, not just say the Roman Catholic Church, but any church with three parishoners and a board. And it applies to all things the church touches, cars, real estate, stocks, everyting. So churches are on the public dole, and the IRS knows this. Which leads to demonstration two of the lack of separation. The government uses the tax-excemption to control the churches. Here is one example.
Two, the real-world application is also counter-intuitive. Its not like churches don't use fire, police, roads, millitary protection, etc, so why don't they have to pay for them. Furthermore, why do I have to support all churches, not just the one I attend? Why should I be forced to support Scientology, or if I'm Muslim, why does the government take money from me to support the local Synagogue? Why am I forced to support James Dobson?
I think the better thing is to get rid of the excemption. Let those that follow a church support that church. Get rid of the scammers, get rid of the subsidy, help balance the budget, all in one fell swoop.
See you in hell...
Posts
4 comments:
Nice one.
Would you support the elimination of 501 (c) (3) status across the board?
From the IRS:
"The exempt purposes set forth in IRC Section 501(c)(3) are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and the prevention of cruelty to children or animals. The term charitable is used in its generally accepted legal sense and includes relief of the poor, the distressed, or the underprivileged; advancement of religion; advancement of education or science; erection or maintenance of public buildings, monuments, or works; lessening the burdens of government; lessening of neighborhood tensions; elimination of prejudice and discrimination; defense of human and civil rights secured by law; and combating community deterioration and juvenile delinquency."
While I've just started to really think and research this, my answer is...yes. However, I think there may be some sort of hybrid answer. For example, maybe my donation is a tax deduction (but if I also get my flat-tax wish, this would go away), but the entity itself is a fully tax paying entity.
In addition to the IRS section you quoted, there are additional expenses that we all bear to audit, monitor, handle, and prosecute questionable 501 (c) (3)'s.
So the process causes direct fiscal harm to the treasurey in the form of non-payment, and then it causes additional harm (expenses) in the form of monitoring. It's a very expesive double whammy.
The double-whammy...new from Whamm-O!
Seems from what little I've read that an organization can go tax-exempt early, if not immediately, in its existence--a literally valuable status given the far-more-often-than-not failure rate of new for-profits. Not that I'm saying they're taxed out of business (that, perhaps, will be said soon enough), but as a contrast to the fledgling non-profits in the future you're suggesting, it's worth mentioning [1] how hard it is for ANYTHING new to get off the ground, and [2]what a boost 501 (c)(3)is not only to a grassroots organization--religious or secular--but also to the community it serves so the government isn't compelled to (at least directly).
Several points.
One, a 501 (c) (3) does get a "grace period." It can get Tax Exempt (TE) status on day one, then it has 12-18 months to get its affairs in order to get in compliance.
Two, when a business comes into a community it generally invests in infrastructure and employs people from the immediate area. This is a direct service that decreases the direct input of the government in that community. Should businesses get TE status?
Third, not all non-profits have the same goals. A non-profit that gives support to a foreign country has no impact on the local community in which it is based, yet the US tax-payer is forced to support it. In other words there is no substitution effect. Also, while we have the ability to demonstrate, and fight to change laws we don't like (at least for now), it seems clumsy for the government to fund groups that run counter to its goals (abortion, death penalty, helmet laws, drug laws, etc). Here, there is not only no substitution, there is actually additional burden.
Finally, and back to my original post. Why should the tax-payers subsidize the Roman Catholic Church, one of the wealthiest entities in the world? Also, if you hold the tax policy acts to control or promote certain agendas, then a tax subsidy for religions and their organizations, directly promotes religion. This runs directly counter to the argument for the TE in the first place.
On a philosophical level, giving 501's or even business' TE status for, say, the first three years would be an interesting idea. I have issues with these kinds of laws in practice, but it may be worth exploring.
Post a Comment