Z1542756


English 104


12/09/09


Dear Reader, 


Taxing religious institutions. 


Taxing is one of the most controversial topics to discuss in America, yet also one of the most easy to understand. When most talk about taxing, it usually deals with income tax or local taxes in the community. Many, if not all things are taxed in America; from smoking a cigarette to buying that luxury vehicle to make one the envy of the neighborhood. Taxing is one of those necessary burdens that many Americans gripe about, yet realize that it is something that helps America prosper and flourish. Without taxing, this nation would inevitably crumble due to debt, and lack of funds. In recent years, the United States has deepened itself in debt with foreign countries, most notably China (www.guardian.co.uk).  When America decided to wage a war against terror, it also decided to wage a war against itself by placing itself in a tremendous debt. Now, as the conflict in the Middle East, one of the longest conflicts in American history, enters its 9th year fighting (www.mideastweb.org/iraqtimeline), many strategies are being proposed to try to get the United States out of the debt it is accumulating by fighting. Obama's main plan of action to get the United States back on its feet financially is to cut out the spending on programs that have failed to work (Ellis,2009), but I believe there is an answer to America's debt problem right in front of our government's eyes. I believe that if America ever wants to securely hold its position as the world's superpower, America must step into the new age, and realize that religious organizations are as much of a financial power as many of the business giants in America. I believe if religion is to remain immune to the taxes that other businesses have to endure, then America will cheat itself out of money it could really use. 


From the moment the passengers of the Mayflower voyage took footsteps onto American soil, they considered themselves Englishmen. They dressed as Englishmen, ate like Englishmen, and were forced to pay taxes as Englishmen would. This Englishmen idea would change as time went on though, for the French and Indian war would leave English Americans with high taxes that were imposed by the King of England. The king found his country low on money after its war with France, and sought to replenish its funds by taxing American goods such as: tea, sugar, wine and other commodities (www.treas.gov/education/fact-sheets/taxes). The American colonials did not believe the tax was fair since it was made without the voice of those in America. The taxing of American colonials is one of the prime reasons America revolted from England and formed its own country with its own laws. Following the Revolutionary War, the Federal Government did not immediately have the power to tax everyone who lived there, largely due to the fact that there was no law stating they had the power to do so (www.treas.gov/education/fact-sheets/taxes). States were deemed their own entities, and allowed to raise or lower taxes as they pleased (www.treas.gov/education/fact-sheets/taxes). When the Constitution was finally introduced, it was written down that the Federal Government could "lay and collect taxes, duties, imposts, and excises, pay the Debts and provide for the common Defense and general Welfare of the United States." (www.treas.gov/education/fact-sheets/taxes) It was up to the States to collect the taxes to discourage a central government but ultimately if one did not pay up, the Feds (Federal Government) would be on that individual like stank on shit. Most Americans know of income tax, but do not really understand what it is, so to sum it up in a quick definition, it is taking a portion of the net income one, or one's business earned over the course of a year (www.treas.gov/education/fact-sheets/taxes). For example, if the income tax percentage was 10 percent, and a person earned $20,000 in net income that year, then that person would pay $2000 to the government. These taxes are often used to fund services such as policing in the states, firefighters, ambulances and hospital care, street services, and many more (www.msnbc.msn.com/id/18098378). The tax  is also used to help pay off the debt that America has sustained over the years (www.msnbc.msn.com/id/18098378). Since the beginning of taxation in America, many new taxes have been introduced including, but not limited to : the Building Permit Tax, Capital Gains Tax, Cigarette Tax, Dog License Tax, Federal Unemployment Tax , Gasoline Tax (42 cents per gallon), Liquor Tax, Social Security Tax,Road Toll Booth Taxes and many more (thepowerhour.com/news2). It is without a doubt that without taxes, America as we know it would not exist today. 


Though most people and businesses in America are taxed, there are still a few that have the benefit of being tax exempt. The most notable of those that are tax exempt are non-profit organizations such as the NAACP, and churches (mosque, cathedrals, any place used as a place of worship for specific religion) (www.irs.gov/publications/p557/ch03.html#d0e3816). The church pays no income tax, no land tax, no sales tax, no tax of any kind, purely because it is seen as being beneficial to society (www.irs.gov/publications/p557/ch03.html#d0e3816). Whether or not one agrees with the religion is not an issue to the government, but can be an issue to the population of America who do not believe in any religion at all. There are not many numerical figures for the amount of land owned by religion, and there also are not many figures on the round about figure of money religion takes in, specifically the church. The earliest numbers I was able to find stated " the church property of the United States which paid no tax, municipal or State, amounted to about $83,000,000. In 1860 the amount had doubled; in 1875 it is about $1,000,000,000. By 1900, without check, it is safe to say this property will reach a sum exceeding $3,000,000,000." (Mart) Since 1900 was about 109 years ago, it is safe to say that those figures have probably exceeded the billion dollar mark. In the same article, it talked about how one church has over 5.5 million people attending per Sunday, all "tithing" 10 percent of their earnings. The article reads "The Catholic Exchange, in their July 1, 2008 edition, claimed that 24% of Americans profess to be Catholic and the Deseret News Church 2008 Almanac reported their membership as 5,779,316. Those are only two of more than 33,000 religious organizations in America that are recognized by the Internal Revenue Service and given tax exempt status." (Mart) It then goes on to talk about the amount of land owned by the churches saying "As far back as 1971, it was estimated that the amount of real property and personal property owned by religious organizations in America was approximately $110 billion. One can only imagine what that figure is today." (Mart) One might ask if the money a lot of religious institutions save on not having to pay taxes go to charitable organizations.  That is not true at all since most of the money received by charities are from individuals, and not the church institution itself. charitablechoices.org has the top givers to charity with individuals at the pinnacle followed  by foundations such as a Bill Gates research for aids foundation.  It is also good to note that many of the religious charities often do not give out their benefits to non believers in their religion; for example when I attended a religious event called IYC,  I was able to see forehand how religions almost buy their worshipers. Many have heard of the "save a child" charities where you donate about 25 cents a day in order to feed a child. Well I had the courage to ask "what happens if the child does not want to go to the church they provide, or what happened if they just are not believers? The lady who was promoting the program told me "they would get the benefits of the lord". It sickened me to my stomach to know that much of the money people thought was going to feed the children, was merely going to drive the religious agenda. It also does not help that when a lot of the television promoters present, they are always well fed, but they hold the most un-nurtured child in their arms. At the heart of it many churches make as much, if not, more than many businesses in America that must pay taxes. You do not have to look further than the Catholic Church that has over 5.7 million members. If those members only give 50 cents per Sunday, that church makes over 2.6 million dollars. 


I believe what needs to be done is a change to the legislation that gives tax exempt status to the church. Under the current legislation, article 501c3, states


"To determine whether an organization meets the religious purposes test of section 501(c)(3), the IRS maintains two basic guidelines.


That the particular religious beliefs of the organization are truly and sincerely held.


That the practices and rituals associated with the organization's religious belief or creed are not illegal or contrary to clearly defined public policy.




Therefore, your group (or organization) may not qualify for treatment as an exempt religious organization for tax purposes if its actions, as contrasted with its beliefs, are contrary to well established and clearly defined public policy. If there is a clear showing that the beliefs (or doctrines) are sincerely held by those professing them, the IRS will not question the religious nature of those beliefs.




Churches.   Although a church, its integrated auxiliaries, or a convention or association of churches is not required to file Form 1023 to be exempt from federal income tax or to receive tax deductible contributions, the organization may find it advantageous to obtain recognition of exemption. In this event, you should submit information showing that your organization is a church, synagogue, association or convention of churches, religious order, or religious organization that is an integral part of a church, and that it is engaged in carrying out the function of a church.


  In determining whether an admittedly religious organization is also a church, the IRS does not accept any and every assertion that the organization is a church. Because beliefs and practices vary so widely, there is no single definition of the word church for tax purposes. The IRS considers the facts and circumstances of each organization applying for church status.


Convention or association of churches.   Any organization which is otherwise a convention or association of a church will not fail to qualify as a church merely because the membership of the organization includes individuals as well as churches or because the individuals have voting rights in the organization." (www.irs.gov/publications/p557)


I gave this information to insure the integrity of arguments for those whom are for or against taxing churches. The two taxes I am proposing for is an income tax, and a property tax. I believe that taxing the church would be very beneficial in helping the United States in getting out of debt. As of now, America's biggest debt is within the United States itself, the Federal Reserve which holds about $4.785 trillion in US Treasury debt, followed by mutual funds (Toscano,2009). China holds $801.5 billion, which is the largest foreign debt holder, followed by Japan who holds  $711.8 billion ( Toscano,2009) . What is even more astonishing is the fact that in 2008 edinformatics.com/investor_education/us_debt.htm reported that "the national debt equates to $30,400 per person U.S. population, or $60,100 per head of the U.S. working population". When they say working population, it includes those who do not even make $30,000 a year in gross income. Christians often say that America is a Christian nation (www.wallbuilders.com/LIBissuesArticles), so I find it hard to believe that many leaders of various churches do not support taxing churches to help this "Christian nation" get out of debt. 


Those who are against taxing religious institutions often cling to the phrase "separation of church and state" and believe that it is in the Constitution. Steve Griffin, an active Free Methodist says "The United States has a long tradition of separation of church and state. If we want to stick to that tradition, we have to admit that true separation of church and state is a two-way street: the church has no power over the state and the state has no power over the church. Taxation of churches is a violation of this principle because taxation is a method of control.". What Steve failed to realize was that the whole notion of separation of church and state was coined by non other than Thomas Jefferson, who stated "make no law respecting an establishment of religion, or prohibiting the free exercise thereof, thus building a wall of separation between Church & State." (loc.gov/loc/lcib/9806/danpre) That is right, there is no such phrase as separation of church and state with in the Constitution; the phrases is merely a view on how Thomas approached the first Amendment which states "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances." (topics.law.cornell.edu/constitution/billofrights) Another argument against taxing religion is that it would violate the 14th amendment. Gregory Lee Cox states 


‭"I understand that you want the definition of a nonprofit changed. This would be a change in statute. However, this change in statute would be unconstitutional because the 14th amendment would prohibit it from being executed. You cannot treat an entity different under the law just because of religious belief (the 14th amendment thing). Therefore, you would have to change the Constitution. However, you might find it difficult to change the equal protection clause of the 14th amendment to the U.S. Constitution because it was enacted to protect the rights of a newly freed people following the Civil War. Some might say that calling for a change to the equal protection clause would be racist."


‭I find this also to be a little off course, being that the in the 14th Amendment, no where does it state anything about religion, or property belonging to a religion. Section one of the 14th Amendment, which is what Gregory is referring to, states "All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws." (topics.law.cornell.edu/constitution) In fact, when I approached my business law professor, David Wade,  and asked him "what laws are in place that prohibited the taxing of religious institutions such as the Christian church, or Islam mosque?" His reply was that the only document that prohibits them from being taxed was the 501 c 3 legislation article that I posted above. I then asked him "well, there must be some type of Constitutional clause protecting religious institutions from being taxed." He then stated " there is no protection under the Constitution, nor the amendments of it that give taxation immunity to religious institutions." (Wade). I am positive that Northern Illinois, one of the top business programs in the country (cob.niu.edu/highlights/rankings.asp) , would not hire someone who does not know his stuff on what he or she is teaching. One final argument that was brought up in the conversation pertaining to taxing religion, was that taxing religious organizations would be racist because it would be a heavy burden on Black America. Steve Griffin wrote " At the heart of it, taxation of churches is basically a racist idea. Truth be known, many white churches would be able to pay taxes and still stay afloat, but the black churches are much poorer and would be disproportionately affected. And the sad part is, the church is one of the few places in society where African-Americans can run their own things their own way without having to compromise with whites. They get opportunities to learn leadership skills that they don't have as much access to elsewhere.As unfair as I think taxing churches would be to society of all colors, it's a real slap in the face to our African-American community. That alone is reason to be against it.". I had to agree, that taxing religious institutions would put a strain on predominantly Black churches, but that to me was not a reason for taxation of religious institutions to be waived. My argument against this was " if you are talking about the whole disproportionate thing because Blacks have less money, then would it be fair to say that Blacks should not have to pay as much taxes as Whites, simply because it is disproportionate ? Heck, Blacks should not have to pay as much for anything, since the $1 burger at Mcdonald's hurts Blacks more than it hurts Whites since Whites...all Whites have more money...25 cent Burgers...here I come..." (Yamini, facebook.com) Although the analogy is a little far fetched, one probably understands the point at which I am trying to get at. One cannot suggest that taxation of a place is wrong because a group of individuals would have a harder time paying than the next. If this were a true case, then businesses whom are owned by Blacks would receive a cheaper tax than those whom are owned by Whites; however this is found to be untrue.  


‭ In conclusion, I believe that the taxation of religious institutions would be very beneficial in helping the United States get out of debt, and back on its feet as the world's super power. Though many may disagree with me, there are just as many that would agree that religious institutions should not hold out on money that would be beneficial to this country. As history as shown us, taxes are not something any man, woman or business wants to pay, but critical in maintaining a civil and powerful country. It is time to step into the new age, and realize that religion is a choice, and not a necessity of life, and though it does have its social benefits, many businesses also have their social benefits yet still must pay taxes. Just because Wal-Mart, or Target do not have a diety as a logo, or hold a worship service to celebrate a religious figure does not mean they do not also serve in providing social services. One can say that being able to buy bread at $.94 instead of having to physically make it is a social benefit. When all is said and done, the reason religious institutions are not taxes is based off of personal preference by those who make the laws of this country instead of actual law. Again, there is no Constitutional law prohibiting the taxation of religious institutions, just as there was no law prohibiting the marrying of interracial couples, although it was illegal all the way up until 1967 (www.npr.org). If religious institutions truly care about being able to have religious freedom, then I believe that they will ultimately realize that the country that entitled them to have religious freedom is in jeopardy of becoming a country owned by the Federal Reserve, and China. 



References:


Colleen Mart.Should taxing religious organizations help fund a health care program in America?. Retrieved from www.helium.com/items/1577384-taxing-religious-organizations-to-fund-health-care


taxthechurches.org/


www.irs.gov/publications/p557/ch03.html#d0e3816


caselaw.lp.findlaw.com/data/constitution/amendment14/08.html#1


 Austin Cline.Why Taxation of Religion Matters.Retrieved from atheism.about.com/od/churchestaxexemptions/a/whyitmatters.htm


END WELFARE AS WE KNOW IT - TAX THE CHURCH.Retrieved from www.gainesvillehumanists.org/chrchtax.htm


www.treas.gov/education/fact-sheets/taxes/ustax.shtml


Taxation without Representation?. Retrieved from www.econedlink.org/lessons/index.php?lesson=356&page=teacher


Income Tax - History. Retrieved from law.jrank.org/pages/7563/Income-Tax-History.html


Interesting List of Taxes that exist today. Retrieved from www.thepowerhour.com/news2/tax_list.htm


About Charitable Giving. Retrieved from www.charitablechoices.org/chargive.asp


Equal protection. Retrieved from topics.law.cornell.edu/wex/Equal_protection


Kenneth Yamini. In class researching the history of Taxation in America, and the relation to the Religion institutions. Retrieved from www.facebook.com/kenneth.yamini?v=feed&story_fbid=212388212145


Gregory Lee Cox. Kenneth Yamini Facebook Blog. Retrieved from www.facebook.com/posted.php?id=503334332&share_id=220717440188&comments=1#s220717440188


WASHINGTON (CNN).February 26, 2009. Obama lays out spending cuts in new budget. Retireved from http://money.cnn.com/2009/02/26/news/economy/Obama_budget/index.htm


MidEastWeb. 2002-2003.The Iraq Crisis - Timeline Chronology of Modern Iraqi History. Retrieved from www.mideastweb.org/iraqtimeline.htm


John W. Schoen. April 15, 2007. Where do my income tax dollars go?. Retrieved from www.msnbc.msn.com/id/18098378/ns/business-personal_finance/


United States Debt. Retrieved from www.edinformatics.com/investor_education/us_debt.htm


Jefferson's Letter to the Danbury Baptists. Retrieved from www.loc.gov/loc/lcib/9806/danpre.html


Rankings & Recognitions. Retrieved from cob.niu.edu/highlights/rankings.asp


NPR. June 11, 2007.Loving Decision: 40 Years of Legal Interracial Unions. Retrieved from npr.org/templates/story/story.php?storyId=10889047


 Paul Toscano.Aug 2009.The Biggest Holders of US Government Debt. Retrieved from http://www.cnbc.com/id/29880401?


David Ellis.2009.Administration to slash TARP cost $200 billion. Retrieved from http://money.cnn.com/2009/12/07/news/companies/tarp_interest/?postversion=2009120807