Taxing Churches for their views? Bad idea. (fwd)

> 
> >More telling, she doesn't seem to have a problem using a religious (and
> >therefore tax-exempt) organization to push a political agenda. Apparently
> >that whole 'separation of church and state' thing only applies when it's
> >convenient.
> >
> >If religions want to play politics, the least we can do is get them to pay
> >for the privilege. I'd feel a certain guilty pleasure seeing some of those
> >bottom-feeders taxed into penury.
> 
> Nonsense. And a dangerous course.
Yes.

> One can decide to "tax churches" or to "not tax churches." I have no
> particularly strong opinion on either option.
> 
> But one must definitely _not_ base the decision to tax or not to tax on the
> opinions expressed by a church!
Agian, yes.

> One cannot decide to tax the Catholic Church "into penury" because its
> anti-abortion views have become politically incorrect in the last 30 years.
> Nor can one decide to tax the tempes and synagogues of Judaism "into
> penury" because they are centers of support for the Zionist Entity.

'Political Agenda' and free speech are two seperate things. Nowadays, free
speech is constantly being challanged by racism, bias and such. People sue
each other because they say something that makes someone feel bad. Churches
lie at the center of free speech, being awarded for their views by tax
exemption. Should 3M have tax exemptions because it gives people jobs?

While I do not want a debate over tax exemptions in churches, 'Free Speech'
may very well involve supporting canidates for positions in a democracy.
This is the very basis for elections. However, one begins to question this
reasoning when a church leader attempts to get into the government, using
the church's tax exemptions, for either support of the church, support of
self, or some illegal (or, at least, unethical) mix.

Should churches be tax exempt? Without their long history of helping people,
I doubt they would have any benifits. However, even if their privillige was
removed, they would simply be able to donate less money to community causes.

Uncle Sam (and his son, IRS) really shouldn't be applied to this subject:
What is free speech? Is tax exemption justifiable to all types of [free]
speech?

-Brandon Crosby




[Can you see the ghosts making snowmen?]

List members should know that there is a debate about taxation of
corporations. That is, a corporation gets taxed on its profits, then the
profits are again taxed when they are dispersed in some form to the owners
of the corporation (shareholders). Thus, every dollar Alpha Corporation
earns as profit (roughly, sales revenues minus costs of doing business) is
taxed at the corporate rate, which is roughly 40-45%. Federal and state.
Not counting property taxes, energy taxes, etc.

Then the profits are dispersed, in some cases, to the owners and
shareholders, in the form of dividends or the like. This "income" is then
again taxed, at rates between 35 and 45%, again depending on the state and
other circumstances.

Bear this in mind when thinking about taxing churches or other charitable
contribution-based entities.

At 11:38 AM -0700 11/5/97, Brandon Crosby wrote:

>While I do not want a debate over tax exemptions in churches, 'Free Speech'
>may very well involve supporting canidates for positions in a democracy.
>This is the very basis for elections. However, one begins to question this
>reasoning when a church leader attempts to get into the government, using
>the church's tax exemptions, for either support of the church, support of
>self, or some illegal (or, at least, unethical) mix.
>
>Should churches be tax exempt? Without their long history of helping people,
>I doubt they would have any benifits. However, even if their privillige was
>removed, they would simply be able to donate less money to community causes.

(There's an important difference between "taxing churches," i.e., applying
the income tax to churches, and eliminating the "tax deduction" for
charitably contributions. I assume the discussion has mostly been about
taxing churches, based on the comments about "taxing them into penury." Tax
deductibility has not been an important factor for many to consider, I
believe, due to the complications of claiming the deduction, the limits on
deductions, etc.)

Most churches operate mostly on charitable contributions.  So, imagine that
the Mormon Church, for example, loses its tax-exempt status and must pay
income taxes.

Imagine a worker for Novell, in Utah. Novell pays 40% of profits in taxes
and, for this example, disperses the rest. The dividends or proceeds of
sales of stock are taxed at about 30%. A Mormon employee gives money to the
Mormon Church.. The Mormon Church pays 30-40% on this "income" (perhaps
less "expenses"--churches are going to have to act like corporations!).

(By the way, one of the big problems with taxing churches on income is this
very issue: what counts as a "profit" for the church?)

Do the math: the initial dollar earned by Novell has been taxed 3 times (to
multiple tax collectors, federal, state, and maybe local). And 75% of it
has been taken in the process.

This is the danger of taxation in general, and taxation of donations in
particular.

As to what the church does with the money, who cares? Another way of
looking at a church is as a pooling of donations to accomplish some end,
e.g., saving souls, getting the U.S. out of Viet Nam, removing bad engrams,
etc. Why should people who have already been taxed twice (first the
corporations, then their dividends) be forced to pay a third set of taxes
just because they are donating?

Oh, and the same logic applies to a political action committee.

It doesn't make sense. Which is why we can expect to see it in the tax code
next year.

--Tim May



The Feds have shown their hand: they want a ban on domestic cryptography
---------:---------:---------:---------:---------:---------:---------:----
Timothy C. May              | Crypto Anarchy: encryption, digital money,
ComSec 3DES:   408-728-0152 | anonymous networks, digital pseudonyms, zero
W.A.S.T.E.: Corralitos, CA  | knowledge, reputations, information markets,
Higher Power: 2^2,976,221   | black markets, collapse of governments.
"National borders aren't even speed bumps on the information superhighway."

Seems to me that the distinction that churches are exempt from taxes
partly hinges on their non-profit, or not-for-profit status.

Now it's nice for those who can get tax breaks, as we surely all could
do with a few tax breaks after the double and triple taxation effects
which Tim describes.

But really it does seem kind of artificial -- what is a church, who
gets to decide, and as TruthMonger said who gets to decide on which
church status gets revoked because of statements which annoy the rule
maker.

Can I be a church and not pay taxes too?  (eg. Can I claim to be a
member of `The Cult of the Dead Cow' or whatever and not pay taxes?)

Scientologists are a fine example of a "church" which is largely
profit motivated.

Even if you drew the line at non-profit organisations that is easily
manipulated -- non-profits can pay good wages, and siphon money out in
other creative ways.  (Like those TV evangelical Bible bashers with
their fleets of Rolls Royces who get found out and disgraced now and
then.)

The whole thing is a mess, loop holes everywhere, complicated rules
will get written, etc.

Now it is an interesting question as to whether it is a good idea to
encourage governments to tax churches or not.  Taxation is a weapon.
Are the churches doing anything useful to our cause?  I think not on
average... religious right helped fuel the CDA, and is busting for
another one (cf far right censorship woman cross posting from
fight-censorship).

Not taxing them is subsidising their activities.

Can we start a `church of crypto anarchy' and have people make tax
exempt donations to fund over throwing the state by undermining
governments ability to collect taxes?

Yeah, right.

Adam
-- 
Now officially an EAR violation...
Have *you* exported RSA today? --> http://www.dcs.ex.ac.uk/~aba/rsa/

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