No, that is false;
Last summer, several newspapers, blogs, etc. picked up on this article written by Dr. Ryan T. Cragun and two of his students, estimating that tax breaks for churches and other religious organizations cost government $71 billion per year, and like many other crazy things on the web, this doesn’t seem to want to go away.
Simply put, the $71 billion number has some very serious problems.
Dr. Cragun gets $35 billion of his $71 billion number by taking the estimated donations to churches from a 2009 survey by Giving USA of $100 billion, and applying the 35% corporate tax rate to that. But anyone with even a smidgen of knowledge about tax law knows this isn’t the way it works. We don’t have a tax on GROSS INCOME; rather, the tax is on net income.
If churches were treated as taxpaying businesses, then they also would get to deduct their operating expenses and depreciation from their gross revenue in order to reach a taxable income number. Because churches don’t have to file a Form 990 or any other financial report, no one really knows what their “net profits” are, but I can verify that the several Catholic parishes I have belonged to during my life have had essentially zero net profits: they spent almost all their revenues on operating expenses, except for the occasional capital improvement (a new parish center or church renovation) which would produce depreciation deductions over time. In other words, churches wouldn’t have $100 billion of taxable income; their “profit” after operating expenses probably is close to zero in most cases. … But let’s assume I’m wrong, and churches have pre-tax profits equal to, say, the average pre-tax profit margin of the S&P 500 for the past twelve years. That pre-tax margin appears to be something like 9.2% … But let’s be generous and round that number up to a 10% pre-tax margin. Now you’re talking about net profits of $10 billion, not $100 billion, and Dr. Cragan’s $35 billion subsidy suddenly becomes $3.5 billion.
But even that is wrong. Under current law, donations to churches probably wouldn’t be income even absent tax exemption, since donations likely would be considered gifts under Section 102, which are excluded from the income of the recipient (Section 102 applies to all taxpayers, not just charities). So unless Dr. Cragun is suggesting that we should repeal Section 102, his actual subsidy number is now zero. …
So now we’ve whittled Dr. Cragun’s subsidy number down to $30 billion. But that’s still pretty large. What about the rest of it? Well, the largest chunk of what’s left is his estimate of a $26 billion loss via property tax exemption.
That cite goes on to debunk even that $26B property tax figure.