Monday, November 30, 2015

Taxes and Churches

A friend who likes to keep me on my toes brought this meme to my attention last week with the question "Can you not recognize the outcry?". The answer to his question is a resounding yes. I do recognize the outcry. Maybe, as a Christian who thinks that the honor of Jesus is the most important thing, I feel people promoting themselves and using Christianity as a pretense more poignantly offensive than a non-believer would. To me, a pastor in a mansion and a church which doesn't help the hurting is not just unfortunate; it is a personal betrayal of principles and a Person which I hold dear. Still, let me nitpick.

Memes are not known for their careful logic or accurate facts, but more for vague innuendo and broad strokes. Since, by their viral nature, memes eventually fall into the hands of people who take them at face value, let me look at this particular meme. It makes four statements, two of which are false and two of which are misleading.

When the church looks like this

This is a picture of Lakewood, either the largest or one of the largest churches in the country, depending on how you count.The median (half bigger, half smaller) church in the US has 75 attenders.
It is a bad idea to base policy on an extreme outlier, especially since taxing churches will hit the smaller churches hardest and will inherently favor the "big business" churches that are the subjects of scandals. I can't cite this, because I don't even know how you would begin to collect the data, but I think it is a reasonable assumption (which I confirm anecdotally) that as a percentage, small churches benefit their communities more than megachurches. Eliminating taxes makes the situation implied by the first two pictures worse, not better.

In any case, "the church" doesn't look like this. Misleading.

And the pastor's house looks like this

This is not the house of a pastor, but of Paul Crouch (some profanity at destination of link, but it was where I could find the same picture used), founder of the cable channel TBN a larger television group than Fox or CB, . He and his wife, both serving as executives of the broadcasting network, made over $750,000 collectively. I am not a fan of TBN and they are not normative for Christians. Their shady family run boards mean they can't join the Evangelical Council of Financial Accountability and the Christians who The Friendly Atheist quotes to show that Christians liked Paul Crouch when he died are all of a similar ilk to Crouch himself (Creflo Dollar doesn't exactly speak for the Billy Graham crowd). Most pastors, even of megachurches, live in average homes for the most successful people in their fields, almost always with a college education and often a grad school one. The average full time American pastor receives total compensation of about $55,000 per year. The average person with a Bachelor's Degree makes about $51,000, while those with professional degrees make an average of $100,000. Many pastors have Masters of better, but 90% of pastors make less than $89,000 per year (see the link about pastor compensation above).

Some pastors are excessively compensated, but the IRS can take away tax exemption for it (see the final point). Creflo Dollar won't be getting any donations from me. One oft used example is really not one: Joel Osteen (of whose theology I am not really a big fan) lives in a mansion in River Oaks, but takes no salary from the church and makes all of his money off of books, so there are some cases like that where financially, he is not a pastor at all. Some examples like that confuse the issue.

But the mansion pictured is not owned by a pastor. It is not normal. It is not accepted. False.

While 1 in 3 children live in poverty

About 1 in 5 American children live in poverty (plus or minus 2%). Global numbers are hard to find (the definition of poverty is loose - UNICEF doesn't even try), but presumably taxing churches implies American children. 33% overstates the real number by 65%. I will clarify, 1 in 5 children living in poverty is too high, but solving it is notoriously difficult. How do you help a poor child who is poor because their parents are meth heads? WIC gets exploited every day, by people who trade groceries for drugs. More direct means, like school lunches and take home meals are already in place. It is  thorny problem, but churches often run food pantries and feed kids hot meals in person, minimizing the risk of abuse (we do both).

Taxing churches might produce $71 billion dollars a year (I'm going to guess that didn't pick the study most favorable to churches, but I'm not going to subscribe to investigate their methods). That amounts to 1/3 of the amount the federal government pays on debts each year. If the United States government has a real interest in making sure no children are in poverty, taxing churches is not the windfall which will finance it, but a budget blip of about $4500 per impoverished child. That may sound like a lot of money per person, until you start calculating. Then you quickly find out that it is less than $2 per day.

I don't think it is possible to calculate the long term effects with any reasonable accuracy, but it is safe to say that there will be fewer churches if they are taxed, so $4500 per impoverished child is the most you would ever get.

To recap: 1 in 3 children do not live in poverty. That 1 in 5 do is a terrible thing, but taxing churches won't solve it and in my experience, would cripple some of the on-the-ground organizations that do the most to help. The meme overstates by 65%. All that makes this False.

It's time to tax the churches and pastors

Pastors are already taxed, of course, and are treated as self-employed for most purposes. That means certain things can be deducted, just like any other profession, Pastors (in general, me included), pay the employer and employee portions of both medicare and social security. Pastors do benefit from parsonages not being taxable, but if the value of rent for the parsonage plus the value of cash compensation is excessive , the church can lose its tax exempt status, just like it can for advocating partisan politics

Churches are taxed on unrelated income, like renting property, selling books, et cetera. Just not on donations or property (churches are also exempt from sales tax on times bought for ministry purposes). 

I think I'm being generous by categorizing this whole statement as Misleading.


This has already taken much longer and been much more work than I anticipated (I also had a root canal today and some Tylenol 3 is floating through my brain), so I will write a post on some objections to taxing churches later this week. Analyzing the bad arguments of this meme will have to do for today.

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