Sunday, February 28, 2010

Tax-Exempt Status for Religious Organizations?

Our nation-wide recession has hit each community to a different degree, but Colorado Springs, Colorado has suffering more than most. I read this article a few weeks ago, detailing how many city services thought to be vital by most citizens are being defunded. Colorado Springs is losing many of its streetlights, policemen and firefighters, and the upkeep of public parks. This is a very sad and scary situation for the people of Colorado Springs, but it wasn’t until I read this article that one reason Colorado Springs has been hit so hard became apparent.

As the second article details, there are over 100 “right-wing Christian organizations” in Colorado Springs. It has an obvious bias against these organizations, and does not specify how many, if any, non-Christian or ‘left-wing’ Christian organizations there may be in the city. However, since religious organizations are given tax-exempt status in America, the large number of religious organizations in the city have contributed to its lack of funding available since they are not paying what some might call ‘their fair share’ of taxes.

This recession has thrust into the forefront an issue few people really even know about—tax exemption for religious organizations. All non-profit organizations are permitted to receive tax-exempt status from the government, so they do not have to pay federal income tax and, on a state-by-state basis, can be exempt from sales tax, property tax, and local income taxes. Most religious organizations, as long as they do not involve themselves in political elections, are non-profit organizations and thus granted this tax-exempt status.

This is not simply the government excluding charitable donations and the like from being subject to taxes—a church’s soup kitchen is exempt, but so is a fun pizza party for its members. There is a strong argument for religious organizations’ continued existence as tax-exempt entities—they are non-profit organizations, generally dedicated to improving the spiritual well-being of their members and helping the local community. Our government recognizes the usefulness of all types of non-profits, and this tax exemption can be viewed as either removing the burden of paying taxes from all of these groups, or favoring these groups, including religious organizations, over the rest of the population.

It was hard to discern my own opinion on the subject, but I think that in the end I have to come down on the side of the religious organizations. As long as these entities are following the government’s rules for non-profit organizations, they deserve to have the state’s burden of taxes lifted when other organizations with a secular purpose are treated in that way. This also helps to avoid a perception of an establishment of religion, since secular and religious organizations are held to the same standards for tax exemption. I think that as long as any type of organization meeting the guidelines for a non-profit organization is granted tax-exempt status, without regard to its religious affiliation, the exemption is constitutional. And in fact, granting tax exemption to secular non-profits and not religious ones is really an unfair burden on religion and probably unconstitutional itself.

However, in this case Colorado Springs and the State of Colorado may want to reexamine their tax exemptions for all non-profit organizations. They can revise the tax laws to lessen the exemptions across the board, since it seems obvious that the city needs to be taking in more tax revenues and the large number of non-profit organizations there are not helping their economic woes.


Alicia_W said...

The economic crisis has affected the country dramatically and it is unfortunate that people in public service professions are losing their jobs, such as in Colorado. However, I agree with Shannon that even though religious organizations dominate the community, they should continue to be exempt from paying taxes. No matter how bad the economy is the fundamental principles that govern our nation need to stay consistent and this includes the separation of church and state. I believe that if the religious organizations were subject to paying taxes, it would create an excessive entanglement within government because there would become a relationship between state funds and religious funds. If the religious organizations are required to pay taxes they would also want to be included in the benefits of the state funds. Something needs to be done to improve the conditions in Colorado but I do not think it is fair to put the blame solely on the fact that religious organizations are exempt from taxes.

David I said...

While religious organizations have been considered tax-exempt for many years, I believe this exemption should end to benefit not only Colorado Springs, but the entire country. Shannon writes in her post that religious groups are given these benefits because "they are non-profit organizations, generally dedicated to improving the spiritual well-being of their members and helping the local community." However, it seems to me that Colorado Springs is not being aided by religious groups. Street lights are still being turned off, while policemen and firefighters are losing their jobs. Religious groups should see the damage that is being done in their communities by not contributing to tax revenues. However this is most likely not just happening in Colorado Springs. In many places that have been hit by the economic downturn, I’m sure that tax revenues have decreased as citizens make less money, and thus pay less taxes. Religious groups should contribute to this fund to help local communities continue necessary services for their citizens. There are thousands of groups that receive this exemption, and consequently could help their communities in greater ways by paying taxes.

Justin M said...

I think the basic problem in this case involves whether a religious organization paying some form of taxes would unalterably cripple that organization. If it is the case that these organizations are able to efficiently survive while paying taxes than they should do so. These organizations are located in Colorado Springs. This means that most of their members are suffering the consequences of the lack of funds in the community. While the State and these religious groups are separate at a legal level, their citizens and members are the same. I agree with Shannon that through changes in the tax laws funds can also be collected from secular non-profits as well. These religious organizations should not be given the full brunt of the blame for the current crisis in Colorado Springs. Nonetheless, they are a part of the community, and in order to help ameliorate the problems that the community is now facing may have to contribute through taxes. As long as the religious organization is able to make these changes, without serious harm, then there is no reason that they shouldn’t be compelled to help save their society.

Jessica B said...

I agree that, for the good of Colorado Springs, these non-profit organizations need to be paying taxes. The matter of affairs within these religious organizations is none of the states business, but its existence is and they rely on the prosperity of the city they are working out of. I understand, "they are non-profit organizations, generally dedicated to improving the spiritual well-being of their members and helping the local community." And probably don’t have much to spare when it comes to money, but every bit counts. Your need for a food bank shouldn’t increase because of the food bank’s non-profit existence. If these organizations are benefitting from working out of a city that provides them with policemen, fire safety, and well-kept streets then they need to contribute to those benefits.

E.Levy said...

I would also agree that these non profit religious institutions in Colorado Springs need to be paying some sort of tax, especially in the wake of such an economic crisis. How is this fair to secular nonprofit institutions or the general population living there, both of whom are paying taxes. Churches do in fact make some money from membership and the likes, if they didn’t how could they employ a minister or pay for renovation and expansion. I think by not asking the church to pay a penny in taxes, in light of the grave and unusual situation the American economy finds itself in, one could label this as dangerous, and a possible breach of the first amendment