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In the United States, currently, religious organizations are not required to pay taxes

The first amendment doesn’t prevent religious organizations from paying taxes, link https://www.freedomforuminstitute.org/first-amendment-center/topics/freedom-of-religion/establishment-clause-overview/tax-exemptions/

What are some common arguments for and against requiring religious organizations to pay taxes? What is the current political climate on this subject (in the US)? Are there any legal arguments (except ones including the first amendment) for and against this, and if so what are they?

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    The Supreme Court has made clear that a tax exemption is neither prohibited nor required under the First Amendment’s free-exercise and establishment clauses. There are many political arguments for or against tax exemption for religious organizations, but I don't think they're centered around the 1st Amendment as you argue
    – divibisan
    Commented Mar 23, 2021 at 14:41
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    To clarify: are you specifically asking only about 1st Amendment issues related to this, as the body seems to be? Or are you asking about all arguments, as in the title?
    – divibisan
    Commented Mar 23, 2021 at 14:45
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    Related (but not a dupe): politics.stackexchange.com/questions/2430/…
    – Bobson
    Commented Mar 23, 2021 at 16:12
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    Well take the first amendment for example some could argue that it requires religion to be exempt from taxes as to not involve them in government while others could argue that it requires taxes on religion as to not favor them. The problem is that people can argue the same point from different sides with valid arguments making it hard not to say it is an opinion.
    – Joe W
    Commented Mar 23, 2021 at 17:48
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    @r13 The Walz decision held that tax exemptions were not prohibited by the 1st amendment, despite providing a benefit to religious organizations, not that they were required or encouraged.
    – divibisan
    Commented Mar 24, 2021 at 15:18

1 Answer 1

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There are many forms of taxes that an organisation may pay. There are the income taxes that are taken from its staff's wages, there are sales taxes on items that it buys and sells, there are land taxes on the property it owns and finally, there are taxes on the profit that it makes. When we talk about an organisation paying taxes we tend to think about the last one, but we should remember that this is only part of the tax contribution that it makes. In this answer, I use "church" and "pastor" as a shorthand for other religious groups and leaders. So "church" may actually be "temple", "mosque", "synagogue", and "pastor" may mean "iman", "rabbi" etc.

Generally, churches don't pay tax on profit, because they don't make a profit. They don't have shareholders who benefit from the profit of the church.

Churches do usually pay taxes on the wages of their pastors, deacons, bishops and other paid workers for the church. Pay for pastors is quite low (considering the amount of training that they receive) but it is taxed.

Churches also pay sales taxes, but often are exempt from property tax. This is because the church building is not a profit-making venue

Insofar as a church is functioning as a charity, it benefits the government not to tax it. The counter-argument is clearly that some "churches" are actually profit-making organisations in disguise, who use the veneer of "religion" as a way to avoid tax. without benefitting their communities.

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  • Why? I pay sales taxes. Am I a profit making venue?
    – James K
    Commented Mar 23, 2021 at 18:47
  • Churches don't pay sales tax, they present a tax-exempt-organization qualification letter which the merchant makes a copy of, which is then filed when the store forwards tax receipts.
    – dandavis
    Commented Mar 23, 2021 at 19:01
  • @JamesK - I think you'd prefer to be making more money than you spend, like most people. If you have any dependents, they're also hoping to directly benefit from you making money (so they can buy things too, if for no other reason). You're probably not a venue, though. :)
    – Bobson
    Commented Mar 23, 2021 at 21:06

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