Study Challenges Religious Tax Exemptions

Related to an earlier story published yesterday.

How much money does the U.S. government forgo by not taxing religious institutions? According to a University of Tampa professor, perhaps as much as $71 billion a year.

And while the authors do not claim theirs is a comprehensive or unbiased appraisal, their findings have raised eyebrows in the nontheist community, which has long sought to eliminate the tax exemptions on the grounds that they unfairly favor religious institutions.

“The issue of religious tax preferment is especially relevant now because the number of Americans living outside any religious tradition continues to grow,” said Tom Flynn, Free Inquiry’s editor. “That underscores the unfairness of taxing all Americans to subsidize religious institutions that only some Americans utilize.”

Cragun and his co-authors — Stephanie Yeager and Desmond Vega — examined federal tax exemption laws, and some state and local laws, specifically in their home state of Florida. They conclude:

• States bypass an estimated $26.2 billion per year by not requiring religious institutions to pay property taxes.

• Capital gains tax exemptions for religious institutions may be as much as $41 million a year.

• U.S. clergy may claim as much as $1.2 billion in tax exemptions annually via the parsonage allowance.

Sarah Barringer Gordon, a professor of constitutional law at the University of Pennsylvania, says religious-based tax exemptions date to the late 19th century and have always been controversial.

“People say we have always had these tax exemptions, but that is not true,” she said. She notes presidents James Madison and Ulysses S. Grant both opposed tax exemptions for religious groups.

(Source: USA Today)