12
Jun
12

Should discriminatory churches receive tax breaks?

Eugene Volokh reacts with some alarm to a proposal that they shouldn’t:

He first notes that such denials are probably Constitutional, but voices another concern:

But I think such proposals are bad policy, and are contrary to the worthy American tradition of religious pluralism and tolerance. When the government (federal, state, and local) spends over 1/3 of the gross domestic product, and when tax exemptions are broadly available to a vast range of charitable organizations, it would be wrong, I think, to deny this same exemption to religious institutions that take a different approach to sex relations than does the government (assuming the government indeed adopts the rigid view that the professor suggests).

I take the same view as to groups (religious and ideological) that engage in constitutionally protected race discrimination, for instance in selecting clergy. While I think such discrimination is wrong, I don’t think religious and expressive groups that engage in such discrimination ought to be excluded from such generally available benefit programs.

Something about the argument that “tax exemptions are available to charitable groups, so they should be available to churches” strikes me as dangerously weaker than what Volokh has in mind.  But anyway….

The problem here is that churches are social institutions.  More or less I’d prefer to live in a world where I could say “Whatever your church doctrine states is up to your church and your faith, and it’s none of my business”.  If your church doesn’t want to ordain women, that’s your business.  If your church only wants to ordain left-handed bronies, that’s your business.  Treat religious establishments as private social clubs and I’m happy.

But we don’t live in that world.  Churches can marry people, which confers civil privileges.  Ordained ministers, last time I checked, count as special people if you need references for passport applications and the like.  Religious institutions and officials are woven into the civil framework, so discriminating by sex when ordaining those officials warps the rest of civil society.  Given that, I think the rest of civil society has some business poking its nose into the churches’ hiring practices.

Anyway, to answer the original question in my typically irritable libertarian way: No, discriminatory churches shouldn’t receive tax breaks — and neither should anyone else!

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25 Responses to “Should discriminatory churches receive tax breaks?”


  1. June 12, 2012 at 14:50

    Haha, no but Law Professors whose salaries get paid for by the public should not try to steal said public’s religious freedom.

    • June 12, 2012 at 15:15

      I get Prof. Volokh’s argument about religious pluralism, but I don’t think revoking tax exemptions from various churches, mosques, and synagogues quite counts as stealing the public’s religious freedom. It’d probably put a lot of those churches into deep financial shit, but it’s far from gutting the Establishment Clause.

      You make an interesting point about law profs at public universities, though. (It probably applies to law profs at private universities, too, since they produce lawyers who’re enmeshed in the civic legal system.) I’ll need to think about it a little more, but I think there’s a difference between the obligations of someone who’s paid by the public and someone who has a public function. For example, when I was TAing computing science courses in grad school, I was paid by the public but had an essentially private function — nobody got (or didn’t) any special civic privileges based on the marks I gave them. On the other hand, a Catholic priest who marries people is paid privately but has an essentially public function. Both of us have obligations to the public, but our obligations are different — I’m merely obliged to be efficient. (I don’t have a good off-the-cuff characterization for the priest’s obligations.)

      It seems reasonable to me that law profs are obliged to avoid endorsing unconstitutional positions, at least as part of their scholarship; on the other hand, I’d hate to say that any law profs who opposed the 18th Amendment prior to 1933 were Doing It Wrong.

      • June 12, 2012 at 15:35

        Well, “stealing religious freedom” may be a little strong, but it may not be. If the government is deciding which churches have correct theology and give financial incentives based on their correct interpretations, then it seems they are showing favoritism and limiting the ability of that religion to gather and practice without undue burden. I guess if they were forced to become a for-profit business that provided the “service” of religious teaching, they could in theory survive. Maybe selling tickets to make sure they make ends meet instead of passing the plate? But I think that cost for the attendants would force many to abandon the church, which I suppose is the goal of disincetivizing their beliefs. But if that was the point, then the government limited the free exercise of that religious viewpoint.

        To be fair, I guess Lincoln did that to the Mormons when he said Utah couldn’t become a state unless they outlawed polygamy. But to be even fairer, they weren’t a state yet, so I guess they didn’t have constitutional rights to violate.

        I just worry that if eventually the government decides that it is discrimination for anyone to say that marriage is between one man and one woman, then churches will be forced to perform polygamist marriages, gay marriages, open marriages, whatever, in ways that are against their beliefs. And the federal government all the way in Washington stealing so much of your money that you can’t keep your doors open, would be violating your rights for a charitable or religious organization that doesn’t seek profit (unless I guess you spell it prophet…bad joke)

        • 4 perlhaqr
          June 12, 2012 at 17:39

          I just worry that if eventually the government decides that it is discrimination for anyone to say that marriage is between one man and one woman, then churches will be forced to perform polygamist marriages, gay marriages, open marriages, whatever, in ways that are against their beliefs.

          This is supposedly the official position of the LDS church, as to why they are so panties-upwadded about legalised gay marriage.

          As an ex-LDS member, who already can’t even get het-married in the Temple, (not that I actually want to), I think this is complete bollocks.

          • June 12, 2012 at 19:49

            Is it bollocks though? It looks like we haven’t even decided yet as a society if we are going to have wide acceptance on alternative lifestyles, but there are already people like this law professor who are talking about different tax laws for those that discriminate. I could easily see this expanding later to denying homosexuality, polygamy etc as discrimination. Like you said though, why would somebody want to have a marriage ceremony in a church that doesn’t approve of that type of relationship?

            • June 13, 2012 at 06:12

              It looks like we haven’t even decided yet as a society if we are going to have wide acceptance on alternative lifestyles…

              Actually, no, I don’t think that’s true. “Acceptance” of alternative lifestyles is a reality throughout the country right now, with any serious breaches of that acceptance almost universally condemned outside the extremely conservative enclaves where they happen. I don’t see any realistic risk of going back to the days of police raids on gay clubs and chemical castration for convicted sodomites.

              The debate isn’t over whether said lifestyles will be “accepted,” but over how many petty signalling mechanisms the majority will be allowed to retain in law to reassure themselves that they’re still the dominant culture.

              On the larger topic, I’d prefer we acknowledge that a “tax exemption” is a deceptive circumlocution for “taxing those who don’t get the exemption.” The matter is clearer when we speak in more direct terms. What’s being proposed is a punitive tax on churches that engage in religious practices the government disapproves of. Fining a church for its doctrine, even when you call the fine a tax, is a pretty clear Constitutional violation.

              [I agree that the ideal solution is removing tax exemption from all churches. If the First Amendment demands that churches be tax-free because tax is a burden on the right, then guns and printers must also be exempt.]

              • June 13, 2012 at 10:05

                On the larger topic, I’d prefer we acknowledge that a “tax exemption” is a deceptive circumlocution for “taxing those who don’t get the exemption.” The matter is clearer when we speak in more direct terms. What’s being proposed is a punitive tax on churches that engage in religious practices the government disapproves of.

                If I’m reading the FindLaw article I linked to in my reply to Jehu correctly, the “tax exemption” is a positive incentive for non-profits — including churches — that have “a beneficial and stabilizing influence in community life”. What’s being proposed is a withdrawal of that incentive, on the apparent basis that churches that refuse to hire women as ministers (hence “labour law” rather than “religious practices”, as if there’s a clear line between the two) don’t have a sufficiently beneficial and stabilizing influence. That’s not quite the same thing as an explicitly punitive tax.

                As Jehu mentions down-thread, the power to tax is the power to destroy. If government is going to tax people, I’d prefer that it did so in an impartial and disinterested manner rather than carving out special ad-hoc exemptions for this and that favoured groups.

                • June 13, 2012 at 12:02

                  That’s not quite the same thing as an explicitly punitive tax.

                  The difference is barely more than semantic, though. If government takes property by force from all entities in a category, and takes more from those that behave in a way it disapproves of, I call that a punitive tax. Is there really a meaningful moral difference if government takes twice as much from everybody and gives half back to those _not_ behaving in the way it disapproves of?

                  This sounds strikingly similar to arguments that the ACA purchase mandate–defiance of which is punished by a fine–is illegitimate, but would be legitimate if government taxed everybody the amount of the fine and refunded it to everyone who carries insurance.

                  If government is going to tax people, I’d prefer that it did so in an impartial and disinterested manner rather than carving out special ad-hoc exemptions for this and that favoured groups.

                  IAWTC. Our disagreement here, too, is semantic.

                  • June 13, 2012 at 12:31

                    If government takes property by force from all entities in a category, and takes more from those that behave in a way it disapproves of, I call that a punitive tax. Is there really a meaningful moral difference if government takes twice as much from everybody and gives half back to those _not_ behaving in the way it disapproves of?

                    Those aren’t the same thing in a set-theoretic way. Divide the tax base into three sets: Those doing things government approves of, those doing things government disapproves of, and those doing things government has no opinion of. A punitive tax hits “disapproves” harder and taxes “approves” and “no-opinion” at the same rate; an affirmative tax subsidy hits “disapproves” and “no-opinion” at the same rate and taxes “approves” at a reduced rate. The two are only equal if “no-opinion” is the empty set.

                    The tax exemption on certain non-profits looks like an affirmative subsidy. I don’t doubt that Dr. Corbin intends its hypothetical removal as punishment — or more likely just a way to signal her distaste for “old religion”. In pure tax-code terms, though, it resolves to the government saying “This is not something we want to encourage with tax subsidies” — the equivalent of not giving your dog a Milk Bone, rather than swatting it with a rolled-up newspaper.

                    • June 13, 2012 at 12:48

                      This is getting increasingly fiddly; apologies for torturing the points. But two things:

                      – Is there a population in the “no opinion” set that neither hires nor refuses to hire women?

                      – Swatting the dog is more equivalent to that “arrest and seizure of property” Perl talks about below. This situation is more like having two dogs that each go out and find three bones by themselves, then taking two away from one and one away from the other. You can try to explain to them all day that you aren’t taking more from one as a punishment, but rather taking two from both and giving one back as a reward; the dogs will correctly see little difference.

                    • June 13, 2012 at 13:07

                      I wouldn’t be following this along if I didn’t enjoy increasingly-fiddly debate. :-)

                      Is there a population in the “no opinion” set that neither hires nor refuses to hire women?

                      That’s not the only criterion for an entity to be in the “no opinion” set. For-profits don’t get tax exemptions; we shouldn’t necessarily conclude that government is explicitly trying to punish them. There exist plenty of non-profits that aren’t tax-exempt regardless of their hiring practices. The relevant section of the tax code, 501(c), specifically enumerates the kinds of non-profits that qualify for tax exemption; other non-profits may apply but may or may not get exemptions for any number of reasons. Are those non-enumerated non-profits being singled out for punishment, or are they just not getting special treatment?

                      (dogs)

                      By this logic, I’m being punished for not being a church (more correctly, for not being a qualifying 501(c)), and so is the for-profit I work for.

                      There’s a couple things we should bring out, here. One is the population base rate. If two dogs go out and collect bones, and their bone collections are taxed differently, we can’t really tell whether one is being punished or the other is being rewarded. If two hundred dogs find bones, and I take two bones away from only one of them, that’s taxation in excess of the base rate and clearly punishment. If I take two bones away from all but one of them, that’s a tax subsidy. Here I think the base rate works in my favour — the government doesn’t exempt most entities and then tax the ones it thinks are doing nasty things, it taxes everyone and exempts those it thinks are doing good. (Laughably oversimplified, of course, and completely ignoring public choice.)

                      The other thing is hysteresis, or how entities react to changes in tax rates over time. If I give my dog a treat every time he comes when I call him, and suddenly I call him, he shows up, and I withhold the treat, that’s punishment. If I spontaneously give my dog a treat for coming when called where I haven’t done so before, the previous no-treat occasions don’t retroactively become punishment. I think this point is in your favour — churches are traditionally tax-exempt, so revoking that exemption feels like punishment.

                    • June 13, 2012 at 13:29

                      If two hundred dogs find bones, and I take two bones away from only one of them, that’s taxation in excess of the base rate and clearly punishment. If I take two bones away from all but one of them, that’s a tax subsidy.

                      I don’t think that’s a reasonable test. It’s certainly not true that a majority can’t be punished. If ninety nine of the hundred businesses in a given city refuses to hire albinos, and the city council passes a new omnibus budget that now has double the taxes for any business that refuses to hire albinos, that’s a tax subside for the one remaining business? (Hysteresis argument taken as understood, though it can get mightily blurry in a context where regulation is expected to change regularly.)

                      I think I made my earlier point poorly:

                      I’d prefer we acknowledge that a “tax exemption” is a deceptive circumlocution for “taxing those who don’t get the exemption.”

                      Allow me to rephrase:

                      In this case, “tax exemption” looks like a deceptive circumlocution for “taxing those who don’t get the exemption,” which illustrates a problem: in practice, “tax exemptions” are trivially easy to repurpose into punitive taxes where openly punitive taxes would not be allowed. This suggests to me that tax exemptions as a means of encouraging desired behavior should (at the very least) not be used in arenas where we don’t accept punitive taxes to punish undesired behavior.

                    • June 13, 2012 at 13:48

                      This is great. We should go for beers and bullshit about this over meat and alcohol.

                      It’s certainly not true that a majority can’t be punished.

                      Concur. But:

                      (albinos)

                      Your albinos example relies on hysteresis to get to its “punishment” conclusion. I’ll counter with corn subsidies: Are farmers who don’t grow subsidized crops being singled out for punishment, even if they’re in the majority? I think not: They’re being treated with (possibly depraved) indifference, not being actively punished.

                      I should’ve spent more effort earlier addressing your point about tax subsidies/exemptions being actuarially equivalent to tax hikes on non-subsidized/exempt entities. Mostly they seem to end up being tax hikes on whichever future generations are going to have to either pay off the debt that’s been built up to fund those subsidies and exemptions, or cope with the consequences of defaulting on those debts.

                      in practice, “tax exemptions” are trivially easy to repurpose into punitive taxes where openly punitive taxes would not be allowed.

                      This comment thread sure looks like a counterargument to “trivially easy to repurpose”. :-) In most cases I’d guess that the path of least resistance is to not raise any existing taxes but borrow more money to cover the deficit.

                      I’ve seen the reverse happen: BC’s carbon tax is an explicitly punitive (well, Pigovian) tax which is also revenue-neutral, so it ends up lowering other taxes.

                    • 14 perlhaqr
                      June 13, 2012 at 18:29

                      This is great. We should go for beers and bullshit about this over meat and alcohol.

                      I wanna go with! :D Even better, I’m not sure which side I fall on, given my expressed “ideal situation” opinion below. “Don’t make the perfect the enemy of the good”, but in this case, which good?

                    • June 14, 2012 at 05:18

                      This is great. We should go for beers and bullshit about this over meat and alcohol.

                      Heh. Drop me a line if you ever need to journey to New Jersey to dispose of a ring in a volcano.

                      I’ll counter with corn subsidies: Are farmers who don’t grow subsidized crops being singled out for punishment, even if they’re in the majority?

                      It’s certainly possible. Imagine an alternate 1937 in which, instead of passing the Marijuana Tax Act, Congress passed an omnibus budget whose new tax rates featured generally higher taxes on agriculture, but with large subsidies for food and industrial crops. The law could studiously avoid mentioning recreational crops, but still have the effect of using taxation to suppress cannabis and tobacco production.

                      We come to the point where in many cases the difference between “punitive tax” and “subsidy” is determined entirely by the lawmaker’s intent. That’s a rational and meaningful distinction in many contexts, but not when we’re talking about enumerated Constitutional rights (I’d argue for a broader policy than this in general, but it would be preaching to the choir). If a proposed tax scheme would result in quadrupling the cost of guns and ammunition, it doesn’t much matter to me whether the lawmaker intended to suppress my rights or to reward pacifists.

                      A government imposition on exercising my enumerated rights should not be considered acceptable when it can be rephrased as showing support for not exercising them.

                      This comment thread sure looks like a counterargument to “trivially easy to repurpose”.

                      Waddayawant, an internet argument about politics with no hyperbole?

                      “In practice, ‘tax exemptions’ for favored behavior often have substantially the same effect as punitive taxes even in arenas where openly punitive taxes would not be allowed.”

                      Happy now, ya o’erweening pedant? ;)

                    • June 14, 2012 at 05:23

                      I wanna go with! :D

                      Wanna be Gollum or Samwise?

                      Even better, I’m not sure which side I fall on, given my expressed “ideal situation” opinion below. “Don’t make the perfect the enemy of the good”, but in this case, which good?

                      Me, I’m at _least_ 90% sure we need a government, and at _least_ 75% sure we need compulsory taxes to support that government. I just want that system to be as simple and equal as possible, and for its application to be for revenue gathering only. This whole idea of government using selective taxation to punish conduct outside its delegated authority to punish is… troublesome.

            • June 13, 2012 at 08:19

              Ah, I think I see.

              You said: churches will be forced and I’m realising (or think I’m realising) that you meant “forced on pain of having their tax-exempt status revoked”, where I simply at first interpreted that statement to mean “they will be forced on pain of arrest and seizure of property” to perform such ceremonies.

              The former seems more possible than the latter, unless the country is even further gone than I thought. I have a very hard time imagining the Supreme Court authorizing the forcing of Catholic churches to perform weddings for non-Catholics, and Mormons to perform Temple Marriages for people who don’t qualify to enter the Temple. (Which includes not merely non-LDS folks, but even LDS folks who don’t meet certain criteria.)

              I hope not, at any rate. Mormons are better armed than your average group, and I’m pretty sure they won’t let another Nauvoo happen again without a significant fight, especially in, say, Salt Lake City.

              • June 22, 2012 at 14:14

                Rather a different situation, since the church in question is the state church of Denmark rather than an ostensibly separate body. You pay the piper, you get to call the tune.

                If anything, this supports my stance that churches shouldn’t get tax subsidies, on the basis that it makes them vulnerable to exactly this sort of coercion. (Special-privilege tax exemptions that one has to grovel for with paperwork in triplicate aren’t “tax freedoms”.)

        • June 12, 2012 at 21:01

          Well, “stealing religious freedom” may be a little strong, but it may not be. If the government is deciding which churches have correct theology and give financial incentives based on their correct interpretations, then it seems they are showing favoritism and limiting the ability of that religion to gather and practice without undue burden.

          That’s pretty much Volokh’s point, and thinking about it I’m surprised that it passes the Free Exercise Clause test. I guess the government is thought to have a “compelling interest” in discouraging sex discrimination.

          Then again, Volokh implies pretty strongly that there are non-profits (including churches) around that plainly discriminate based on race, are therefore denied (some? all?) tax exemptions, and manage to stick around anyway. Maybe loss of tax exemption isn’t deemed to be enough of an existential threat to violate Establishment.

          I just worry that if eventually the government decides that it is discrimination for anyone to say that marriage is between one man and one woman, then churches will be forced to perform polygamist marriages, gay marriages, open marriages, whatever, in ways that are against their beliefs.

          Wow, that would violate about two-thirds of the First Amendment all at once — maybe all of it if the church has an activist newspaper. I think the inevitable constitutional challenge would have a lot of ground to stand on.

          • June 13, 2012 at 20:09

            I’m sort of interested to see no one has mentioned the actual judicial history here.

            Which is so heavily in favor of preserving church independence that I’m more than a little irked by the “we have to prevent you from gaining rights in the highly abstract and unlikely case that you somehow take some of ours” argument.

  2. 22 perlhaqr
    June 12, 2012 at 17:29

    I’ll be way the fuck over here in north field saying “we should give tax exempt status to everyone”. :D

    • June 12, 2012 at 21:05

      Well, sure; that’s tautological in our desired end-games (no government -> no taxation). For the next few years, though, I’d prefer to avoid trying to one-up Greece in the “we’re not going to collect taxes” game.

  3. June 12, 2012 at 17:30

    Bluntobject,
    The power to tax is the power to destroy. The tax exemption of religious institutions is a bright line rule intended to prevent such destruction. Good luck finding any Schelling fence sturdy enough to rally behind otherwise.

    The rule about federal securities being exempt from state income taxes and vice versa is a similar legal construct, erected for much the same reason (essentially a nonaggression pact between state and federal in terms of their respective abilities to loot the population).

    • June 12, 2012 at 21:21

      The power to tax is the power to destroy. The tax exemption of religious institutions is a bright line rule intended to prevent such destruction. Good luck finding any Schelling fence sturdy enough to rally behind otherwise.

      I would’ve thought the Schelling fence, in this case, was the first two clauses of the First Amendment. This annotation suggests that the tax exemption of religious institutions is partly derived from the Establishment clause (trying to tax churches would involve the government far too much in religious affairs), but partly also from the general social good of institutions like churches, museums, hospitals, and other non-profits.

      If it was intended to serve as a Schelling fence, though, I’m not convinced that it succeeded (or perhaps it was merely placed near the bottom of the slope, from my perspective).


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