Woo-Hoo! Yes, yes, yes!
I hope this starts a trend.
Woo-Hoo! Yes, yes, yes!
I hope this starts a trend.
Good news. Vermont is a trend leader.
Hey! The destruction of the churches is at hand!!! ... Time to rejoice, "she has fallen"
I can imagine the churches kicking and screaming and hanging on with their fingernails over this! Woohoo, tax the bastards! Free ride is over, or at least it ought to be.
Great news - LOVE VERMONT.
Breaking: Federal District Court Declares A Religious Income Tax Exemption Unconstitutional
by David Badash on November 22, 2013 in News,Politics,Religion Share on reddit 674
A federal district court judge has declared “unconstitutional” a portion of U.S. law that allows “a minister of the gospel” to not pay income tax on a specific portion of their compensation.
U.S. District Court Judge Barbara B. Crabb of the Western District of Wisconsin ruled that the so-called “parish exemption,” which allows religious ministers to avoid paying taxes on the value of their housing granted to them by their religious employers, “violates the establishment clause” of the U.S. Constitution and must be discontinued. The law, 26 U.S. C. § 107(2), has been on the books since 1954.
The tax exemption was estimated to cost U.S. taxpayers $2.3 billion from 2002-2007 alone, likely more in the years since. Heralding it as a “major federal court victory,” the Freedom From Religion Foundation, which brought the lawsuit along with their co-presidents, Annie Laurie Gaylor and Dan Barker, offered an explanation of yesterday’s ruling.
Ministers may, for instance, use the untaxed income to purchase a home, and, in a practice known as “double dipping,” may then deduct interest paid on the mortgage and property taxes. “The Court’s decision does not evince hostility to religion — nor should it even seem controversial,” commented Richard L. Bolton, FFRF’s attorney in the case.
“The Court has simply recognized the reality that a tax free housing allowance available only to ministers is a significant benefit from the government unconstitutionally provided on the basis of religion.” Crabb wrote: “Some might view a rule against preferential treatment as exhibiting hostility toward religion, but equality should never be mistaken for hostility.
It is important to remember that the establishment clause protects the religious and nonreligious alike.” The 1954 bill’s sponsor, Rep. Peter Mack, argued ministers should be rewarded for “carrying on such a courageous fight against this [godless and anti-religious world movement].”
“I agree with plaintiffs that §107(2) does not have a secular purpose or effect,” wrote Crabb, adding that a reasonable observer would view it “as an endorsement of religion.” Crabb wrote that “the exemption provides a benefit to religious persons and no one else, even though doing so is not necessary to alleviate a special burden on religious exercise.”
All taxpayers are burdened by taxes, Crabb noted. “Defendants do not identify any reason why a requirement on ministers to pay taxes on a housing allowance is more burdensome for them than for the many millions of others who must pay taxes on income used for housing expenses.”
One study has estimated that in total, combined religious tax exemptions cost American taxpayers $71 billion each year. The Foundation sued Jacob Lew, Secretary of the Treasury Department, and Acting Commissioner of the Internal Revenue Service, Daniel Werfel.
The ruling, which you can read in full, below, notes: It is DECLARED that 26 U.S.C. § 107(2) violates the establishment clause of the First Amendment to the United States Constitution. Defendants [the government] are ENJOINED from enforcing § 107(2).
The injunction shall take effect at the conclusion of any appeals filed by defendants or the expiration of defendants’ deadline for filing an appeal, whichever is later. In other words, the ruling right now is on hold until the appeals process is complete.
It is not known if the government will appeal, but expect a full-throated attack from the religious right demanding the law be re-written to comply with the Constitution. FFRF v Geithner – Parsonage Exemption Image by rychlepozicky.com via Flickr
I hope they do pass such a law, but I doubt it will happen. In the end, legislators have to vote for it and you can bet every church and other organization that would be affected by the law will encourage their members to flood the lawmakers' offices with calls and stage protests. The problem politically is that all of those people have an incentive to strongly oppose the law, whereas Joe taxpayer who would eventually save some tax dollars doesn't have the same incentive to rise up en masse and call for the taxes, or at least nobody will be organizing much advocacy on the other side.
Taxing all property equally is not entirely as foreign to American history as the person quoted in the article suggests, although you have to go back a while. In 1868 the California Supreme Court decided that the legislature could not exempt any private property from taxation, and religions paid taxes on their property from then until 1900. In the 19th Century, at least three Presidents opposed property tax exemption for religions.
It is often difficult to estimate how much taxes are being missed out on because they don't assess exempt properties. But recent studies have suggested the number is approaching $1 billion/year in New York City alone. For all the grousing in this country about excessive governmental budget defecits, it's interesting that these massive tax subsidies almost never even enter the conversation.
This is confusing. A federal district court judge held the parish exemption for taxable income to be unconstitutional. Hopefully, it is in a progressive circuit. I did not think to research. I don't believe a legislature would ever act b/c of political pressure but judges are less bound by political reality. Presently, I am reading Judges in Democracies which includes the notes from a special meeting of top judges in democracies around the world. Justice Stephen Breyer represented the United States. Evidently, the trend towards judges deciding such issues is happening around the world. I don't know if judges are appointed to decide such issues. Judges are deciding many matters that in an earlier time would have been decided by the legislature. There never was any const'l justification for the parsonage exemption yet it persists in the tax code.
It would be great if legislatures started fulfilling a const'l role under the Establishment Clause. They seem to abdicate to federal judges. I can't see the income tax preferences for religion going away but there is no const'l justification for favoring religion. There is one great concern I have. The excessive entangelment of government in religion. When I researched faith-based social welfare organizations and the Establishment Clause many commentators said that such exemptions must be view in a historical context. Government had no social safety net until the New Deal. Society became used to religions helping the poor or running hospitals and orphanages. Religion was viewed as a good provider for society. No one wanted to disrupt this aid.
May I ask what you think?
BOTR, as to the FFRF case referred to by Sol Reform, it was out of Wisconsin, which is within the Seventh Circuit. I don't think that's an overly conservative circuit, outside of the well-known free-market judges. I initially wondered about the standing issue, which can be hard to come by if you are just asserting standing as a taxpayer, but after looking at the opinion, that wasn't the basis. The plaintiffs clearly calculated far in advance how to attack this particular statute. People like Marci Hamilton have been saying for a while that the Parsonage exemption is unconstitutional, but obviously striking it down is a small measure in the overall taxing discussion.
As to courts stepping in to eliminate tax exemptions, I think the prevailing view in that niche of the legal community is that it's not constitutionally mandated to either allow or prohibit property or income tax exemptions related to religion, and it should be left to state legislatures, in the case of property taxes, and Congress in the case of income tax exemptions. Aside from Justice Douglas's solo dissent in Walz v. Tax Commission, I don't think anyone in the upper eschelon of the courts has ever taken the position that it's unconstitutional. In fact, I suspect that if one of these laws does ever pass and allows tax breaks for charitable orgs but not churches, some kind of constitutional challenge would be launched by the church community on the basis that it's entanglement to inquire how much social benefit regiously affiliated organizations provide. Burger actually suggested that in Walz. I do think that in the end, if this form of subsidy is to end, it will have to be judicially. It's just too much of a minefield politically. I think it's possible that Douglas's reasoning might be vindicated in the end, and he might end up being 100 years ahead of the bend of history.
I also suspect that state laws on property tax exemptions would be more susceptible to eventual challenge in court than portions of the federal tax code.