The Freedom From Religion Foundation and the American taxpayer won a significant legal victory on November 22, 2013 when U.S. District Judge Barbara B. Crabb ruled that a 1954 tax exemption uniquely benefiting “ministers of the gospel” was unconstitutional.
The law allowed “ministers of the gospel” paid through a housing allowance to exclude that allowance from taxable income. Ministers may, for instance, use the untaxed income to purchase a home, and, in a practice known as “double dipping,” deduct interest paid on the mortgage and property taxes. Clergy are permitted to use the housing allowance not just for rent or mortgage, but for home improvements including swimming pools, maintenance and repairs. They may exempt from taxable income up to the fair market rental value of their home, particularly benefiting well-heeled pastors. The benefit extends to churches, which can pay clergy less, as tax-free salaries go further.
Judge Crabb, quoting the Supreme Court, noted that, “Every tax exemption constitutes subsidy."
Crabb also stated in her ruling: "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. [...] [T]he 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. [...] 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.”
The benefit to clergy at taxpayer expense has been enormous, costing an estimated $2.3 billion from 2002-2007 alone, according to a statement by Congressman Jim Ramstad in 2002.
Judge Crabb stayed her ruling until the conclusion of any appeals.
Good for Judge Crabb! Her ruling makes sense to me. Besides, God will provide for clergy, surely.
yea, they only apply the 'faith' concept to their followers. as far as the church its self, well the word needs spreading and the competition needs beaten to a bloody pulp (usually figuratively speaking)
Well done America!!!
Thats the one you've been waiting for all this time, now these guys have no legal reason to see themselves as special, they may stop trying to influence politics (hopeful, unlikely thought)
I agree with the ruling for the particular case, though the ruling is overbroad where it should have been more narrowly tailored, which will probably be corrected on appeal.
The purpose for the law is to exempt from income tax housing which is required to be used as a condition of employment. Most religions have a requirement that priests and ministers live on church property in a rectory or other housing where they are accessible to their congregants at off hours for emergencies, and where they are immediately available to take care of the church property. Some insurers of church property also require this, the same way insurers require occupancy in a primary home.
All that is perfectly reasonable, and should be upheld. If your employer makes you live somewhere so that you can be available on-call (like a firefighter or a resident manager), that allowance is and should be tax exempt.
In this case, the defendants were apparently taking a housing allowance to go off and buy a regular house somewhere. That's cheating, and they should be nailed for it.
Where it gets tricky is for small/poor congregations that might not have the property or resources to provide on-site housing (ex. urban "storefront" churches) but nonetheless want their pastors to be available and on-call. Requiring a pastor to rent a house close to the church, and subsidizing the rent to some degree is all a poor congregation can do. The interpretation of the law needs to tailor itself to such circumstances.
I have just became aware that I may have been thinking of this the wrong way. I do voluntary work for a charity and as a non profit organisation we have to make financial records open to the public and put any financial gains back into the schemes we run for the young people. (to add a side note, I ask the young people I work with to have faith in one thing, themselves, however this is irrelevant to the point)
I have dome some looking into other charity and non profit organisations since my comment here the other day, and began to ask myself, 'Does the catholic church deserve tax exemption' which led me to the question, 'is this church a non profit organisation' to which I could only come to one conclusion - of course its not a non profit organisation. Have a look at the assets its acquired and ask, are these necessary for the betterment of its humanitarian/charitable initiatives?
Maybe we are running our charity wrong, but I think we get by ok without gold sceptres, silken robes, giant art displays, expensive propaganda campaigns, and even a city state!
The catholic church runs at a profit to which one of the top benefactors enjoys a lavish lifestyle in what can only be described as palace (described such because it is such) in a fortified city state. This organisation may do charitable work, but as it runs at a profit, should not be exempt from tax at any level while it runs at a profit and retains such un calculable riches.
It can also be noted, in British law at least, that the catholic church stomps all over the laws governing how a charity interacts in a political forum. The details of this are to vast to go into here, but I would ask that if you find this an interesting point, feel free to look it up, all the while asking, 'if this charity was non religious, could it get away with this?'