How We All Pay For the Huge Tax Privileges Granted to Religion -- It's Time to Tax the Church

Would the world be better off without religion? That was the topic of a recent debate in the NYU Intelligence Squared series. One of the audience questions concerned the enormous wealth hoarded by churches, which Christian apologist Dinesh D'Souza defended as follows: 

I think in the case of the Vatican, the wealth of the Vatican is in priceless treasures, tapestries, the ceiling of the Sistine Chapel, art. Now, let's remember... it was popes, the Medici popes and so on, who commissioned those paintings. If it wasn't for Catholicism, we wouldn't have the Sistine Chapel.

This was the only line of the night that got boos from the audience. It's easy to see why, since D'Souza was clearly trying hard to overlook the obvious reply: The reason it was the church that commissioned those artworks, and not some other buyer, is because the church had all the money! The great composers, painters and sculptors of the Renaissance worked for whomever could afford to pay them, which is why they often ended up working for the church even when they were notorious freethinkers, as in the case of Giuseppe Verdi. If it wasn't for Catholicism, we might not have the Sistine Chapel, but it's a near-certainty that we'd have different artworks, equally majestic and famous, by the same artists. As Richard Dawkins has suggested, wouldn't you love to hear Beethoven's "Evolution Symphony"?

I bring this up because, thanks to the Occupy protests, inequality has come to dominate the American political conversation. Poverty and inequality are at their highest levels since the Great Depression, and there's a growing clamor to raise taxes on the wealthy to provide more opportunity for the rest of us. I think this is an excellent idea, and I'd like to suggest that beside Wall Street bankers and stock traders, there's another group of the mega-wealthy that's often overlooked.

Why don't we consider taxing the churches?

Not all churches or all ministers are rich, but some of them are very rich indeed. And that's no surprise, because society subsidizes them through a constellation of generous tax breaks that aren't available to any other institution, even non-profits. For example, religious organizations can opt out of Social Security and Medicare withholding. Religious employers are exempt from unemployment taxes, and in some states, from sales tax. Religious ministers -- and no other profession; the law specifies that only "ministers of the gospel" are eligible for this benefit -- can receive part of their salary as a "housing allowance" on which they pay no taxes. (Compounding the absurdity, they can then turn around and double-dip, deducting their mortgage interest from their taxes, even when their mortgage is being paid with tax-free money in the first place.) And, of course, churches are exempt from property tax and from federal income tax.

We're all paying for the special privileges afforded to religion. Your taxes and mine have to be higher to make up the revenue shortfall that the government isn't taking in because these huge, wealthy churches don't pay their own way. By some estimates, the property tax exemption alone removes $100 billion in property from U.S. tax rolls. (And it's not just the big churches where that exemption bites: According to authors like Sikivu Hutchinson, the proliferation of small storefront churches is a major contributor to poverty and societal dysfunction in poor communities, since these churches remove valuable commercial property from the tax base and ensure that local governments remain cash-strapped and unable to provide basic services.) Just about the only restriction that churches have to abide by in return is that they can't endorse political candidates -- and even this trivial, easily evaded prohibition is routinely and flagrantly violated by the religious right.