I am in rural Pennsylvania visiting relatives this week and there are a lot of amish people around here, and I heard that they do not pay taxes. But why? they make money and go to doctors. It just does not seem fair that a group of people that do not use electricity should not have to pay taxes.
It’s not exactly correct that they don’t pay taxes. Certain Amish ( I believe only those who are self employed or who work as independent contractors) don’t pay Social Security tax. They do pay income taxes, property taxes, and so on.The reason is essentially that it is against their religion to collect SS from the government and it is part of their religion to take care of their own.They are not the only group to have been exempt from SS taxes. Up until about 1990 or so ( I don’t remember exactly when) government employees did not necessarily pay SS. Of course, those who didn’t, like the Amish, didn’t get any credit towards collecting SS.
The self employed Amish were exempted from the Social Security program in 1965 by LBJ. Acceptance of SS is against their religion.
So all of us government employees who don’t pay into Social Security are all Amish as well?
Finally one good reason to be religious.
re. gov’t employees: Until ~1986, when the government employees’s pension program switched from one plan [CSRS] to another [FERS], and employees from the old system were allowed to switch until about 1991 or so. CSRS stood on its own, exempt from SS; FERS includes SS as a major source of pension income.
The amish pay income tax. Its a pretty common urban legend that they pay no tax. Certain church lands arent taxed, presumably, but when you run a business, or have an income, you pay tax. I hadn’t heard the social security thing either; in fact, it seems highly suspect that a president would make a concession to a single small religious group, rather than a general “if your beliefs can justify etc etc” edict.
You don’t have to be Amish to withdraw from Social Security. Any minister (preacher, padre, guru, etc.) can elect to withdraw by simply informing the SSA, in writing, of their desire. They cannot collect on any money they may have contributed to SSI before becoming a minister and once withdrawn they can never re-enter the system.
Not to take issue with Dex, who actually works with these sorts of issues IRL, or with Doctor Jackson but I’m not sure that a simple “religious” exemption is allowed.
In every case that I know where an exemption has occurred, the group has been able to establish, to the satisfaction of the Feds, that they will “take care of their own” and that they will never come looking for SSI disbursements. The Amish qualify because, as a community, they provide for all their members. E.G., rather than buying insurance, the Amish community used to simply take up collections for any member’s medical bills. They used to decline mortgages, as well, saving up for any house-building programs and pooling funds to cover the extras. (I say “used to” because I am not sure of current practices. The skyrocketing land/housing/mortgage costs of the last 30 years finally pushed those in Yankee-settled areas to take on mortgages, but I am not sure about the medical insurance.)
The only other groups that I know have gotten exemptions from SSI have been orders of nuns who had a firmly established program of caring for aged sisters at the motherhouse.
I could be mistaken, but I do not believe that someone can establish the First Church and Grill of God, name themselves pastor, and exempt themselves from SSI. Among Catholic priests, those who work for the bishop and have not joined a religious order pay FICA.
No need to hedge, tomndebb, I’m with you on that one.
An individual cannot be exempted from U.S. social security on religious grounds. Many pastors, for instance, are viewed as self-employed, which means they pay (almost) double social security contributions: both the employee’s AND the employer’s portion, so around 14% rather than 7%.
A few groups have been allowed to be exempted from U.S. social security, if they provide for their aged themselves. Basically, the U.S. gummint doesn’t want a bunch of people not contributing to social security and then winding up on welfare roles. However, that’s done on a group basis rather than an individual basis.
In the same way, there were other organization that were exempted from U.S. social security in the past because they participated in other similar programs – the Railroad workers had their own program for many years, for instance, although that has now been integrated into Social Security. There was a period of time when hospitals could opt out of social security, by promising to pay equivalent benefits to their employees. Similarly, other groups have been exempted over the years.
Let me also say, that there have been very few deals as good as social security in terms of cost-to-benefit ratio. That’s probably no longer the case with the investment return available to individual funds over the last five years or so, but if you compare the contributions made by a typical 65 year old, over a 40 year working career, to the benefits received after retirement… hell, it was GREAT investment.
Back to the original question, I think that was answered by the MAILBAG – yes, the Amish do pay income taxes. Period. There are dozens of urban legends floating about, how this group or that group is exempt from taxes, or how “you” don’t have to pay taxes because of some legal loophole… all bovine feces.
Dunno, Tom. I’ll do some more checking. I do know that our pastor had to make this decision when we called him to our church for his first fulltime pastorate. He had been bi-vocational before. He had to tell the SSA then whether he would continue to participate or not, and the decision was irrevocable. He decided to continue, and can never again have the option to opt out. Had he opted out he could not re-enter, even if he left the ministry.
FTR, I am Southern Baptist. I know the following to be true:
-Our pastor is an employee of the church, not self-employed.
- We, the individual church, provide for the pastor’s retirement in a 401(K) type plan. This is a pretty standard part of an SB pastor’s compensation package.
-SB pastors are generally paid a salary plus a housing allowance. The housing allowance is non-taxable as income. This helps pastors to live on a “salary” which most of us would consider paltry. (I include this to show that there is some precedent for ministers being treated differently by our government.)
I do not know of any plan of the SBC that ‘guarantees’ the Convention will take care of retired pastors. I know of no “old preachers’ homes”. I’ll see what I can find out about that.
I agree that the Amish exemption is not on religious grounds, but self support grounds. I am now curious how that exemption is carried over to ministers of other, less centralized religious groups.