...and why taxing churches could bring us Into the 21st century 

by Kenneth Bronstein   AMERICAN ATHEIST magazine - Mar 2010    See original, expanded  .PDF article here

True or False? Ending tax exemptions for U.S. religious institutions would cut every private citizen's taxes by up to 50 percent and provide enough revenue to finance a national health insurance program.

Answer: True!

Though no one knows for sure what the actual numbers are, economists have estimated that if religions were taxed like a business (which some say they are), it would bring in more than a trillion dollars in tax revenue annually to local, state and federal governments.

Our government currently collects a total of $3.5 trillion in taxes each year: one trillion from personal income taxes, a little over two trillion from corporate taxes and .05 trillion from other sources. Thus, taxing churches would bring as much revenue into government coffers as they get from all personal income taxes put together.

Think what we could do with the tax revenue from churches should it come barreling in someday: in Washington, where Congress is currently lamenting that the nation does not have enough money to finance a national health insurance plan (although the old-fashioned countries like France, England and Canada found a way to do it), legislators might be interested in learning that taxing churches would bring in enough revenue to provide health insurance for every man, woman, and child in our country ($700 billion).

But before your mouth waters at the prospect of a smaller personal tax bill and available health care if Congress should suddenly come to its senses about taxing churches, there are a couple of caveats here. Just because the government collects a trillion dollars from a new source doesn't mean it is going to lower the taxes on an old source. Laws would need to be enacted to make sure we do indeed get lower personal taxes as the new source of funds kicks in.

Getting revenue from churches may answer another problem our president faces. To fulfill last year's campaign promises, the administration is seeking ways to lower individual taxes for people with incomes below $200,000. The downside of this is, the government stands to lose considerable revenue from this largess. Washington's economic wizards are squeezing numbers to find ways to replace the not-inconsiderable income lost though this promised reduction. I have news: with a kick-in of tax money from churches and religious institutions, lowering taxes for the lower and middle-income taxpayer would be painless.

But before we spend the money we haven't received yet by taxing the god business, I must ask the question: are churches truly a business?
I would strongly argue that they are. The definition of a business is "an organization that sells services or products." A buyer purchases those services or products, and some form of monetary transfer takes place.

I contend that churches are indeed selling services: they are selling salvation, prayers, hope, heaven, forgiveness of sins, rituals, and trinkets. Some of their services may be intangible, but when you go to a psychiatrist and he makes you feel better, you pay for that 'intangible' service.

Churches also charge fees for various ceremonies: weddings, funerals, baptisms, bar mitzvahs, communions, confirmations, etc. St. Patrick's Cathedral recently made news when it decided to sell "indulgences" again. The indulgence promises sinners so many years off their stay in purgatory after they die, based on how much money they pay. Is this a tangible item or a service? Whatever it is, it is a transaction that involves money even if the service purchased is to take place in the afterlife. (Apparently a Catholic can spend his or her whole life saving up money to buyout the punishment for a lifetime of sinfulness in the afterlife. If the whole idea weren't so comically bizarre, it would be tragic.)

Churches also receive income from providing services such as schools, marriage counseling, and from collections, donations, legacies, and investments.
Remember too, that any land owned by churches is not taxed. I have heard that in Rome some 5,000 apartments a year are donated to the Vatican, which makes the Catholic church a landlord with the competitive advantage over other landlords of not having to pay property taxes.

Nor do churches pay taxes on money received from donations and tithing. Under current tax laws, the donors of money to a church can deduct the amount donated from their income taxes, which makes the tax collector a double loser in this transaction: the government loses revenue from both the donor and from the receiver, the church, which does not pay taxes on the gift.

There is yet another important way that churches deprive the government of tax revenue. The fact that churches and temples usually sit on prime downtown property deprives the community of vast amounts of income that might be produced, if say, a high rise office building occupied the footprint that the church sits on.

This underutilization of taxable land is known as 'Opportunity Costs' and it refers to the fact that churches often occupy these key locations that could be put to more effective use in terms of tax revenue production for the city.

For example, take the Church of Christ on Park Avenue and 63 rd Street in New York City, which occupies some posh terrain worth hundreds of millions of dollars. If that same location were used for a 40-story office building, it would produce millions of dollars in tax revenue for the city, not to mention jobs (and thus more income taxes) and an increase in local business activity which, of course, adds to the city tax coffers.

But the Church of Christ produces no tax revenue whatsoever for the city because it is a tax-free religious edifice. The land it is on isn't being utilized to its full financial potential. It is, therefore, depriving the city of untold tax and business opportunities, hence the term 'Opportunity Costs.' To add insult to injury, the church also finds creative ways of using government programs and resources to line its pockets and increase the value of its property. Consider the following:

1) Churches have used the government's Historical Landmark programs for maintenance of their property. Claiming landmark status for their churches, they use millions of dollars in government subsidies to repair church fa9ades, organs and the like.

2) Churches have used money from Faith-Based Initiative programs for repair and maintenance of their buildings instead of what it was intended for, social services for the needy.

3) Churches have entered the catering and rental businesses, renting their space for events. Because they pay no taxes, they are able to undercut other catering and rental businesses, causing a number of bankruptcies of legitimate businesses. There is one church in New York that no longer holds any religious services but simply rents its rooms for meetings.

4) Some parochial schools are becoming charter schools, which are funded with tax money.

5) Churches get free services that taxpayers support with our tax money, such as water, police protection, garbage disposal and firefighting. Because churches are getting a free ride for these amenities, every private citizen's bill for these services is much higher than it should be.

Can we ordinary citizens afford to continue to subsidize churches? Because most of these subsidies are hidden, it is difficult for us, as Atheists, to realize that, as taxpayers, we are subsidizing religion whether we want to or not. When I have spoken about these hidden subsidies to groups, many Atheists become infuriated by the thought that churches, shrines to a supernatural world that we deplore, are being maintained and repaired, and even profiting, with the help of tax money from Atheist citizens.

Let me make it even clearer: 'God' is a business, and a profitable business. Religious institutions are able to make extraordinary profits because they are excused from many of the obligations of other businesses. The whole situation of churches being subsidized by our tax money, enabling them to become tax-exempt profitable businesses, is not fair, it doesn't make sense, it is untenable and it is time that business people across the nation-Atheists or not, looked at this discrepancy in tax policy and protested.

It is incumbent on us, as Atheists, to start the ball rolling toward fairer tax policies. In my initial research on this topic, I got in touch with tax think tanks, tax specialists and tax reformers, all of whom urged me to continue educating and alarming my constituency to start the ball rolling for the elimination of tax exemptions for churches.

If Atheists do not work on this issue, who will? Join me in spreading the word, lobbying and alerting the public about the long-concealed and overlooked injustice of our nation subsidizing organized religion by tax exemptions and thus enriching the already brimming coffers of the churches.

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