This has been on my mind recently since we began discussing the SLC mall fiasco. Why are contribution to churches tax deductable? Why are churches automatically considered charities and what kind of accountability are churches under to demonstrate they qualify as a charity?

Not only in modern times but historically as well, churches have not functioned so much as charity but as money generating institution. Henry VIII got rich raiding the convents and abbies of England when he broke with the Pope in his day.

Today we have the mega churches and the TV ministries, some of which appear more like circuses than like churches. And so many of these TV Pastors live expensive - sometimes decantant - lifestyles. All these ministeries and these ministers are supported by tax free dollars because the money given (sometimes extorted) is all considered to be a charitable contribution.

Can someone explain this to me???

The simple answer, and it begs the question, is that the law permits it. The real question is why does tax law permit such contributions as a deduction? This answer is found in the presumtion that these kinds of deductions encourage contributions that help secure and stabilize our national social fabric. I.e. churches are non profit institutions that assist with issues relating to taking care of the poor and disadvantaged as one example.

Most churches perform service in the community, like, feeding the homeless, or sending a youth group to Mexico to build homes during the summer. And governments recognize that, when motivated by a religion or church, people will take care of other people, so the government doesn't have to. Unfortunately, some churches are actually real-estate investment corporations that masquerade as churches.

The real reason is because the religious believers are in the majority and can rule over those against the idea that churches are of any benefit to the nation or country.

... is the general belief that churches make a positive contribution to society in multiple ways --- reduce alcoholism, crime, etc., as well as encourage honesty, clean living, industriousness, sobriety, faithfulness in marriage, attention to the raising of children, and so forth. The tax code is therefore designed to encourage positive behaviors through tax benefits, while discouraging negative behaviors (like smoking) by tax increases.

That which you can tax you can control.

The government is not supposed to control religion - therefore, no tax.

(that is what I was told. I have no sources.)

If you can tax a church then there could be a tax law created that could take all of a churches money, or tax some less popular churches more than others.

I think it was also part of the idea of the separation of church and state. The churches would not be taxed, but they had to stay out of politics.

By not taxing churches/religions the government in effect subsidizes them by giving a tax deduction to those who tithe. Therefore, non believers have to pay a higher tax to make up the income loss to the government by the tax deduction. Seems like it crosses the line between separation of church and state.

If the property were taxed, wages taxed and tithing not eligible for a tax deduction then we would see a significant drop in the number of god buildings.

Jesus didn't say to give unto Caesar's what is Caesars and give unto the lord - as long as you get a deduction. Give to you cult, just don't expect a deduction for it.

People who work for churches pay income tax just like everybody else. Granted there are some deductions for housing allowances that others are granted who work and live in institutionalized settings.

If that is where you were going with the idea that wages are not taxed.

of their income they give in charitable contributions.

There are other tax deductions that I question:

Why reduce someone's taxes when they have children? Sure, I welcome any tax relief, but children cost money for society to educate. I do think it's worth it to society to foot the bill for education, but why give their parents a tax break as well?

The mortgage interest deduction . . . Why should homeowners pay less taxes than renters? Everybody needs a place to live. If anyone needs a tax break, it's the guy who can't afford to own a home. Why not just make a larger standard deduction for people who have to pay for a place to live? And those who choose to live in a huge home wouldn't get any bigger tax break than the guy who lives in a normal one.

Personally, I don't think the government should be in the business of encouraging religion, home ownership, having more children, etc . . . . They should base taxes on income and standard expenses so people at the bottom of the income ladder pay MUCH less taxes And deductions should be for contributions to REAL charities that lift the burdens of the needy or meet other societal needs. And I do think there should be tax breaks for medical expenses, because those effectively suck away your income.

I have no problem with churches being considered charities and thus have certain tax breaks.

However in many countries (such as the UK and Canada), transparency is required of the spending of any organisation that registers as a charity.

Generally speaking, this measure is pretty good (although not perfect) at ensuring that the charity status isn't abused. It is also helpful for potential donors when trying to determine which charity to support financially.

For the sake of discussion, I'm not so concerned about how to do it perfectly as I am discussing the need for the transparency and accountability. As it is, I think a number of minitries are only operating as a for profit motive. These "businesses" should not be subsidized with tax free donations.

While I doubt TSCC would ultimately be effected with a change in their charitable status, I find it appalling that donations to this organization are exempted from tax when TSCC spends hundreds of millions of on a downtown mall in SLC.

Does anyone believe that churches need to be accountable to maintain their tax exempt charitable status for money they receive as donations for the actual amount of charity work they perform? I'm talking concept here - not necessarily the practicality of how to measure or evaluate how much they actually do.

It would help prevent unethical churches from soliciting donations and then letting their leaders live large. If the congregations could SEE where the money was going, they would be better informed and could decide if their sacrifice was warranted or not.

I wonder . . . do pastors and priests pay regular income taxes on money they earn in their positions? It seems that they would, but I never really thought about it before.

The pastor do pay income tax on their earnings although there are some special provisions due to typical practices for ministers. One of these is a housing allowance. At one time, it was not uncommon for ministers to be transferred from one area to another on a regular basis and the local churches would provide housing for the ministers and their families.

It's been too long since I reviewed these policies so I am unable to report much about what the exceptions are - and I never did a return for a member of the clergy.

As for priests, I don't know what kind of compensation they receive for their services.

Well you answered your own question there. We are not Europe. One of the main reasons this country was founded was so that people could practice their religion without fear of government interference. Hence the government cannot control churches.

Read your history man.
out

In my church our regular offering has nothing to do with money we give for a new church bldg. or an addition. That money is generated specifically for a bldg. and you can give or not as you so desire. I think our regular offering is eligible for a tax deduction because our church tells us what the money is used for....many homeless needs, Head Start families benefit in Dec. from our congregation, mission work to countries overseas, food pantry, etc. If a church can not or will not be accountable for the money they collect it should NOT be tax deductible IMO.

Edited 1 time(s). Last edit at 10/29/2010 05:39PM by ozpoof.