In response to the OP’s question about tax revenue on churches: Virtually nothing. Nonprofits are not amassing hoards of wealth (as a general rule) because they spend what they get on their various programs. Taxed as a corporation, they’d deduct those expenses and show little (if any) income.
As Much rightly points out, the tax revenue is lost due to the charitable contribution deduction for individuals.
It doesn’t have to be either extreme.
Many people (especially the wealthy) look at tax deductions to their church (or other nonprofits) this way when they decide how much they can afford to give. They think “I have $6,000 extra to give. My tax deduction will reduce taxes by 30%. Therefore, I actually have $8,500 to give.”
If you deny the deduction, people who think this way will give only the $6,000 and the church loses out on $2,500.
There isn’t a cite to offer that I know of, but I think you can compare the giving behavior to political contributions. There’s no deduction for those and yet many people still give. People are not giving money only because of a deduction.
In fact… to circle around to the main point of why churches can’t endorse candidates or engage in politics: Allowing them to do so would create a gaping loophole in the tax code. You’d be able to rig it so that a charitable contribution deduction could be taken for political spending by routing the money through a church.
For that matter, there are a good number of folks who are just taking the standard deduction with the IRS, but who still donate to their church anyway. Those folks are effectively not getting any deduction for their donations already, and so one would not expect their behavior to change at all.
I seem to recall hearing that this isn’t the first year the churches have done this..so there may be history from past years on how (or if) the IRS reacted.
The acknowledged intent of these churches in defying the rule is to goad the IRS into taking action that can eventually be appealed to the Supreme Court as an unconstitutional curb on freedom of speech. I assume this means the IRS has yet to attempt enforcement of any kind.
Is building a new building(church) considered a deductible business expense? At some point, the church I attended to when I was a kid bought up land and built a 20+ million dollar(IIRC) church in Los Angeles.
If the standard gift to a church is “tithes,” or 10% of your income, why not make it a law that churches should tithe 10% of their income to the government?
I suggest 10% to the feds, 10% to the state, and 10% to the locals.
And 10% to Israel.
What, they don’t benefit from these governments?
Well, maybe not Israel. Heck, I’m flexible. Let’s talk, eh?
This breaks out into a million different issues, all of them highly charged, and most of them with no good answers whatsoever. It’s not surprising that people are talking past one another. It’s like a math-physics thread without the actual rules and definitions that science provides.
Take the following as a few random thoughts from someone who used to work for a government and had to deal with the tax ramifications.
I both agree and disagree with Munch. The tax exemptions for churches are derived in the same way as other non-profits are. But that doesn’t mean that all non-profits are identical, or that they fall under the same provisions of the tax code, or that churches couldn’t be written out or placed into a separate category. Historically, America has been very lenient in what it considered a church to be; the result of the endless thousands of schisms and evangelical fervors that created congregations of a dozen people over and over and over again. We mostly try not to judge what makes a religion a religion. That’s one reason why the question of not separating churches out from other educational and charitable institutions seldom arises. But it could, and the portion of what is considered to be non-taxable income and expenses might change drastically if across-the-board definitions were enforced.
But trying to determine federal taxes doesn’t come close to getting to the core, because they’re really a small and IMO insignificant issue. For almost every municipality in the country, churches own enormous percentages of what is often otherwise extremely valuable property that would in any private use produce huge property taxes. The only comparable institution in most places are universities. All other non-profits combined probably don’t make up another third, although there must be local exceptions. How do you value a downtown church in a location that might otherwise house a 50-story skyscraper but has been there since before the city was incorporated? Multiply that problem by - I can’t even guess. A million? - and try to handle that mess. I also can’t begin to guess where lines would be drawn. Church schools would be exempt for educational purposes, I suppose, but then what? Unless you’re familiar with a property by property map of an area (plat maps, they’re called) you probably can’t know what around you is owned by whom, and that still doesn’t give you their purpose.
Any change would require us stripping ourselves down to to basic definitions of what constitutes our civilization. People talk about culture wars today but they’re simply deluded. This would be all-out culture war.
In some ways this is the perfect message board topic. You can talk endlessly about it on all sides and not approach anything that might even tangentially touch on reality. But what the OP asked is not a GQ question. It’s an invitation to a shootin’ match.
Exapno makes a lot of really good points. I think a very interesting discussion would be “should religious organizations be required to file as either 501(c)(4) or 501(c)(8) organizations, instead of 501(c)(3) organizations”.
Most large religious organizations go out of there way to make sure that all of their financial statements are completely out in the open. The only exception that I know of the Church of Jesus Christ of Later-Day Saints (Mormons). They are famously secretive about their finances, keeping their financial books secret not only from the public, but also from their own members. Of the money they take in from tithes (including millions annually from a certain Mr. Romney), a lot goes to business concerns and very little to charity. So the government could probably get quite a bit if it started taxing them; not much from other religious bodies, though.
The churches’ position is that the Johnson Amendment is unconstitutional as applied to them, not that it’s unconstitutional on its face. Assuming their challenge is successful, the courts would carve out an exception to the law for religious organizations, not every non-profit.
The expenses would be capitalized. The building, fixtures, land, etc. would be assets on the books that would be depreciated based on the type of asset. For the building itself, that would be depreciation over 39 years. It works that way for any business entity in the US.
sigh Then please tell us why every other 501(c)(3) organization should have to pay property taxes - or at least make your case as for why a church should be considered a business and not a 501(c)(3).
But only these 1000 churches are flouting the Johnson amendment. if other non-profits flout the johnson amendment then they too should lose their status.
Probably not much federal revenue, but a ton of state and local revenue.
Problem is, if you think corporations are powerful, wait until churches get involved in politics at the same level. You’ll be begging for the oil companies to save you from the Bible-thumpers.
The problem with 501(c)(3)s engaging in electioneering is that it circumvents almost every campaign finance law.
Sheldon Adelson could donate his hudren million dollars to a sysnagogue he runs, deduct the donation and run his electioneering through the church.
Carl Rove would become a minister the next day, start a church and return all the donations to his superpac so they could donat a similar tax deductible amount to his church.
The problem with 501(c)(3)s engaging in electioneering is that it circumvents almost every campaign finance law.
Sheldon Adelson could donate his hudren million dollars to a sysnagogue he runs, deduct the donation and run his electioneering through the church.
Carl Rove would become a minister the next day, start a church and return all the donations to his superpac so they could donate a similar tax deductible amount to his church.