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Politics and religion often intersect in the United States and many other countries. However, churches generally don't support political candidates (though certain religious leaders do because they're not specifically doing it through the church). There's a reason for that: if they do take on such roles, they have to be taxed.

There are two questions that I am asking. First, why do churches have a tax incentive to not specifically support partisan causes or endorse political candidates? Second, why not tax all churches because of separation of church and state (that religious institutions should not be prioritized over secular ones)?

Note: I use church as a word for any religious institution, not necessarily a Christian one.

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    Note that churches have a tax status that is similar to that of a non-profit. There are a large number of non-profits who are not associated with religion in any way that are also not taxed.
    – quarague
    May 21 at 14:47
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    Far from me to be very supportive of organized religion, but wouldn't taking away tax exempt status, just because a church included some, or a lot of, political speech, be fundamentally against the 1st amendment? I mean I could see going after a for-profit church, and there are many churches that probably are run to do just that (watch teleevangelists and their cars), but that's a different metric than your proposal (and it rarely seems enforced). Aren't there even tax exemptions specifically for political organizations? May 21 at 16:56
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    @quarague but like churches, they are required to steer clear of politics.
    – phoog
    May 21 at 21:20
  • @ItalianPhilosophers4Monica "but wouldn't taking away tax exempt status, just because a church included some, or a lot of, political speech, be fundamentally against the 1st amendment?" It has happened to many mom-religious charitable organizations; the Sierra Club is an example. "Aren't there even tax exemptions specifically for political organizations?": If there are, there's all the more reason to ask why churches can't retain their tax exemptions while engaging in political activity.
    – phoog
    May 21 at 21:25
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    @ItalianPhilosophers4Monica: A 501(c)(4) "social welfare" non-profit organization (as opposed to a 501(c)(3)) is allowed to engage in lobbying "related to the organization's exempt purpose". While the organization itself is tax-exempt, donors can not deduct donations to it on their federal income tax.
    – dan04
    May 22 at 20:26

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Why aren't tax exempt church organizations allowed to be political?

Every organization is given tax exempt status based on what it does. That's because we want to give tax exemption for some activities (such as giving food to the hungry) but not to others (such as selling luxury yachts).

When a church applies for tax exempt status it declares that it will be almost entirely doing religious activities. If it was actually doing other activities then it wouldn't have been given tax exempt status. If it ends up doing political activities and not religious ones then it is violating the conditions of its status.

If this were not the case then it would be easy to get around tax laws. You would start a church, give money to it and get the tax back, but have that church actually do entirely political campaigning. You are essentially getting tax exemption for a political campaign.

In most cases churches are allowed to say political things within limits. For example, they can say "it's morally right to give food to the starving", and let the congregation draw their conclusions about who to vote for as a result of that, but not to say "Vote for Joe Smith because he will give food to the starving". There is a certain amount of grey area there, and most organizations are permitted to do some lobbying in areas related to their main function, as long as it isn't their primary activity. However once the church becomes mainly about politics it's going to be in trouble.

In the United States churches are really expert at pushing the boundaries of this line, and frankly it isn't enforced that much.

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    A church could switch from 501(c)(3) status to 501(c)(4) status and therefore be allowed to make explicit political statements. Under that switch the church would still retain its tax-exempt status from the federal government. (Whether it would retain its exemption from state and local taxes is a different matter.) One big difference is that donations to 501(c)(3) organizations are tax deductible, while donations to 501(c)(4) organizations are not. May 23 at 12:11
  • Only thing I would add is given how important the first amendment is in the USA anything religious tends to get allot of leeway. Church's can say rather political things because drawing the line on what is and isn't too political is hard and the US tends to error on the side of giving religions the benefit of the doubt.
    – dsollen
    May 24 at 20:07
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Why do churches have a tax incentive to not specifically support partisan causes or endorse political candidates?

Almost all religious organizations are chartered as 501(c)(3) organizations. All 501(c) organizations are non-profit, tax-exempt organizations. The special category of 501(c)(3) means that if, for example, someone donates a lot of money to such an organization that person can deduct those donations from their taxable income. It has to be a lot of money because the standard deduction has become fairly generous. That person cannot use donations to other 501(c) organizations as tax deductible.

A clause was added to section 501(c)(3) of the IRS code in 1954, the Johnson Amendment. This clause precludes 501(c)(3) organizations from participating in, intervening in, or campaigning on behalf of or opposed to ny candidate for public office. This, along with the tax deductibility of donations, is one of the things that incentivizes churches (and other charitable organizations) from supporting partisan causes or endorsing political candidates.

The US federal government does not have property taxes or sales taxes, but many states do. Religious organizations (and in some states, other charitable organizations) are typically exempt from those taxes. In most states, a church needs to be a 501(c)(3) organization to qualify for such exemptions. In many (most? all?) states, non-501(c)(3) organizations that are exempt from federal income taxes do have to pay property taxes on the properties they own and sales taxes on the stuff they buy. This gives a huge added incentive to churches to avoid explicitly endorsing political causes / political candidates. Losing 501(c)(3) status would have huge consequences.

Why not tax all churches because of separation of church and state (that religious institutions should not be prioritized over secular ones)?

That's not going to happen in the US. Freedom of religion does not mean freedom from religion. Courts have long recognized that making religious organizations tax exempt does not violate separation of church and state, so long as the regulations apply equally to any organization that somehow qualifies as religious.

That said, some churches have been pushing the boundaries. Pushing the boundaries hard. Whether the Johnson Amendment has any teeth is dubious. Recently (15 May 2022), a well-known Tennessee pastor has explicitly pushed those boundaries by claiming that “You cannot be a Christian and vote Democrat in this nation” and “If you vote Democrat, I don’t even want you around this church. You can get out.” Multiple organizations have asked the IRS to investigate the 501(c)(3) status regarding this particular church.

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  • "It has to be a lot of money because the standard deduction has become fairly generous": some people itemize deductions for other reasons, for example foreign tax or mortgage interest. These people can benefit from deducting charitable donations even if they are not particularly large. "Freedom of religion does not mean freedom from religion": that depends on what you mean by "freedom from religion." The first amendment certainly guarantees Americans' right not to go to church and not to be subject to other religious obligations.
    – phoog
    May 22 at 13:39
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    @phoog Regarding "freedom from religion", I was referring (perhaps a bit too obliquely) to organizations such as the Freedom From Religion Foundation that think all churches, synagogues, mosques, etc. should be taxed, preferrabily heavily. That's not going to happen. May 22 at 14:51
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    "That's not going to happen": indeed. Thanks for clarifying.
    – phoog
    May 22 at 14:54
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Why not tax churches? That is a political decision of the US government, to support religion. A standard way for the government to promote something that it thinks is "Good" is to give it tax breaks.

Why tax churches which engage in partisan activities? Because then they are not acting as religious organisations, but as partisan organisations. This is to prevent groups with vague religious backgrounds from registering as "churches" and getting the tax benefits, without offering the supposed "Goodness" that churches do.

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Well...

(IRS) Exemption Requirements - Political Organizations

A political organization subject to section 527 is a party, committee, association, fund, or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function.

Exempt Function - Political Organization

The exempt function of a political organization is influencing or attempting to influence the selection, nomination, election or appointment of an individual to a federal, state, or local public office or office in a political organization. The election of Presidential or Vice-Presidential electors is also part of the exempt function of a political organization. Activities that directly or indirectly relate to or support an exempt function are exempt function activities.

So, why pick on churches for being political if there is specific category of tax exemptions for political organizations?

Further to that, would it not strike against First Amendment to suppress political communication, at least within a reasonable range? I.e. a pastor who spent all their time campaigning is not good, but one who voiced their opinion to their flock would be hard to object to. What about a pastor who campaigned very heavily for say the Democrats because of their theological beliefs about caring for the poor and the sick? What about, well might as well say it: abortion. I am firmly pro-choice but I understand entirely how many religious people object to it. They shouldn't dictate to others, true, but they can't have, political, opinion?

Last, and not directly legal, but rather political in consideration, this strikes me as a really divisive and pointless action. Things being what they are this type of measure would be highly partisan and would affect Republicans - surprise - much more than Democrats. For some strange reasons Christians in the USA believe themselves under attack by secularists despite being an unusually religious country by most rich Western metrics. This type of measure would give them more grounds than usual to complain. It would not pass and why stir this pot up?

i.e. Make no church tax exempt (not realistic politically, but I agree with the sentiment). Or leave them alone, at least for politics. Removing tax exemption for for-profit tele evangelist type outfits is a much more defensible action than policing religious political speech.

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    If they want to do political work they can register as a political work instead of a religion? I think the main reason is the goal of separation of church and state and what the goals of a religious organization and political organization are. And it just isn't churches that have that ban but charities as well.
    – Joe W
    May 21 at 17:04
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    @JoeW All 501(c)(3) organizations are prohibited from endorsing or opposing political candidates thanks to the 1954 Johnson Amendment to the IRS code, which added and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office to the section of the IRS code that defines 501(c)(3) organizations. May 22 at 11:20
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    Re So, why pick on churches for being political if there is specific category of tax exemptions for political organizations? Even if a PAC is a tax-exempt organization (e.g., a 501(c)(4) or 527 organization), the contributions by individuals to those organizations are not tax deductible. A church that wants to be politically active can reorganize as a 501(c)(4) organization so as to maintain its tax exempt status, but the tithes / offerings given to the church by members will not be tax deductible. May 22 at 11:25
  • A 527 isn't even completely tax exempt. It has to pay taxes at a corporate income tax rate on its investment income. Not a big deal for a store front church. A very big deal with a church with major real estate holdings like the Roman Catholic Church or the Episcopal Church.
    – ohwilleke
    May 26 at 1:33
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Well, the starting point of answering this question is the 1st Amendment. The 1st clause of the amendment is

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof;

Now doing a google search on "why aren't churches taxed," the very 1st link that came was the LA Times article from 2008. The 3nd paragraph summarizes the SCOTUS decision which reaffirmed that making churches tax-exempt does not rise to the level of "respecting an establishment of religion":

In its 1970 opinion in Walz vs. Tax Commission of the City of New York, the high court stated that a tax exemption for churches “creates only a minimal and remote involvement between church and state and far less than taxation of churches. [An exemption] restricts the fiscal relationship between church and state, and tends to complement and reinforce the desired separation insulating each from the other.” The Supreme Court also said that “the power to tax involves the power to destroy.” Taxing churches breaks down the healthy separation of church and state and leads to the destruction of the free exercise of religion.

To sum up even more, because not taxing churches reduces commingling between political and church agendas. So the federal which creates this regime is consistent with the intent of the 1st Amendment.

The same article contains a counterpoint, which mentions that the tax exemption is codified in the federal law because it is not explicitly stated in the Constitution. And it is the federal law which creates the precondition that churches may not engage in "electioneering."

The boundary between what is and what isn't an appropriate separation of church and state has to be drawn somewhere. And that's where the law has drawn it.

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