Leading up to April 15, millions of Americans can be found scrambling to file their taxes for themselves and their businesses, unless they operate a church. According to U.S. tax law, religious organizations are not required to pay taxes because they're considered non-profit institutions and because they provide a public good. However, many are skeptical of this reasoning, arguing that churches can be enormously profitable and that the only benefits they provide are to their own members. Should churches keep their tax exempt status?
Although there seems to be little sentiment for doing away with tax exemption for houses of worship, that does not mean the practice comes without strings. Indeed there are many.
The government conditions tax exemption on several conditions. A charity or house of worship must operate for the public good, not someone’s private benefit. Most of the time this is not a problem for a church. Pastor Bob down at the First United Methodist Church pays personal income tax just like you and me, but his church is tax exempt, and most people don’t mind that.
A handful of religious leaders make things difficult. When Americans see TV preachers with nine mansions, 25 sports cars and a closet full of $2,000 suits claiming tax exemption, they get angry – and rightly so. Church tax exemption was never meant to become a vehicle for amassing a personal, tax-free mountain of wealth.
Tax exemption was also never intended to be a dodge to cover profit-making activities. Some religious groups have branched out into the purely secular world, running business that have nothing to do with spreading the faith. These entities should be fully taxed.
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