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This reflects a sentiment I see occasionally--an assertion that churches shouldn't be exempt for X reason.
It generally strikes me as a poor reason, and this case is no different.
Why? In the first instance, that a governor called churches businesses and Trump said they're 1/ https://twitter.com/FruitKace/status/1263895708064677889
It generally strikes me as a poor reason, and this case is no different.
Why? In the first instance, that a governor called churches businesses and Trump said they're 1/ https://twitter.com/FruitKace/status/1263895708064677889
essential is entirely irrelevant to their tax-exempt status.
Second, what if they're businesses? If we're concerned about granting tax-exempt status to entities that do the same thing as for-profit entities, we should be looking seriously at nonprofit hospitals (and, for that 2/
Second, what if they're businesses? If we're concerned about granting tax-exempt status to entities that do the same thing as for-profit entities, we should be looking seriously at nonprofit hospitals (and, for that 2/
matter, schools). There may be marginal differences, but there aren't really significant differences between nonprofit and for-profit hospitals, with two small exceptions. First, the nonprofit version doesn't generally pay taxes. Second, the nonprofit can't pass its profits on 3/
shareholders or other private parties.
So the aim at churches seems misapplied.
Third, let's assume a churches lose their exempt status. What happens?
Probably nothing. The major source of revenue for most churches are donations they receive. Those donations 4/
So the aim at churches seems misapplied.
Third, let's assume a churches lose their exempt status. What happens?
Probably nothing. The major source of revenue for most churches are donations they receive. Those donations 4/
almost certainly qualify as gifts. (I say "almost certainly" just because it's never been adjudicated afaik.) Gifts are not taxable to the recipient. So a taxable church wouldn't pay taxes on its primary source of revenue.
And its business income? It already pays taxes on 5/
And its business income? It already pays taxes on 5/
that if the business is unrelated to its exempt purpose.
There is some exempt income it earns. But if a church becomes taxable, it gets to deduct certain costs, at least including salaries and electricity and rent.
(Churches do save money by not being subject to property tax 6/
There is some exempt income it earns. But if a church becomes taxable, it gets to deduct certain costs, at least including salaries and electricity and rent.
(Churches do save money by not being subject to property tax 6/
but property tax is state-level, and easily divorced from federal tax consequences.)
IOW, making churches taxable wouldn't actually _do_ anything substantive.
So why the calls for it? I suspect (and I'm writing about this now) that it's performative. That is, calling for 7/
IOW, making churches taxable wouldn't actually _do_ anything substantive.
So why the calls for it? I suspect (and I'm writing about this now) that it's performative. That is, calling for 7/
churches to lose their tax exemption underscores how serious a person thinks the violations of the church are. It says, This is really bad. 8/8
cc @JohnCDehn
