Should churches pay taxes?

The tax-exempt status of churches enables charity work

Question: Should churches pay taxes?
Position‹2 of 2: No, churches should not pay taxes
Argument‹3 of 3: The tax-exempt status of churches enables charity work

If churches were taxed, they would be unable to contribute to the common good. The extra revenue that churches reap from their lack of taxes filters back into their communities in real and tangible ways that cannot be said for many of the larger corporations.

The argument

A central focus of churches is caring for the poor and marginalized. They also provide services for the community. A church tax would force these institutions to channel less money into providing these services. The relationship is direct because the money has one source and competing destinations: a church's income is what funds its charitable work, so anything taken from that income comes out of the work rather than out of a surplus held somewhere else. As a result, the poor and marginalized would suffer from a lack of these previously offered resources. The cost of the tax would therefore fall not on the institution being taxed but on the people it currently serves, who are by definition the people least able to obtain those services from anywhere else. There are many charitable organizations who largely rely upon donations from church, including the National Christian Foundation and Catholic Charities USA (which serves 10 million people every year through 2,500 different agencies). The effect extends past the churches themselves, since a church is also a source of funding for other bodies, and reducing what it has to give reduces what they have to spend. The scale of that second organisation indicates what is at stake in the transmission: a service reaching that many people through that many agencies is not a marginal supplement to public provision. Taxes would seriously undermine the hard work that these organizations do and take away money meant for charity work and donations. Through providing these services, churches earn their tax-exempt status by contributing to the common good. This is the principle the argument finally rests on. Exemption is presented not as a privilege attaching to religious status but as the ordinary treatment of an organisation performing work the public benefits from, on the same basis by which any charitable body is exempt.

Premises

[P1]A central focus of churches is charity — caring for the poor and marginalised and funding organisations like Catholic Charities USA, which serves 10 million people a year. [P2] Taxing churches would divert money away from these services, so the poor and marginalised would suffer. [P3] By contributing to the common good in this way, churches earn their tax-exempt status. [C] Therefore, because their tax-exempt status enables charity work, churches should not pay taxes.

Counter-arguments

It is difficult to see the inner workings of church's funds and how much of them go to charities and the "common good." Many huge churches across the world, especially those formed around televangelist personalities, make boatloads of money but do not contribute significantly to charity or their local communities. Charity and the "common good" could be seen as an excuse for these churches to exploit their patrons without answering to the government, their organizations funding nebulous purposes, either for their own pockets or the pockets of their wealthy constituents.

Rejecting the premises

[Rejecting P2] Paying taxes does not automatically mean churches cannot give to charity and give back to their local communities. If they are a larger church with a lot of revenue, they could still contribute significantly while being taxed at a slightly higher rate than zero. [Rejecting P3] This is not necessarily true - taxes are guaranteed to go into projects like schools and infrastructure, while charity work is not guaranteed by churches. [Rejecting P4] Churches should not necessarily be exempt from taxes.