English communities secretary, Eric Pickles, has proposed that the government may want to withdraw tax breaks for the Church of Scientology — noting controversies over the Church’s activities and alluding to the general view in England that it is more of a cult than a religion.
Scientology is not treated as a religion in England but still receives financial benefits as a charity. In 1984, the organization was described as a cult by a high court judge.
Yet, the City of London Corporation has asked Scientology to pay only one-fifth of the tax rates for its London headquarters near St Paul’s cathedral.
Pickles questioned whether Scientology can be described as beneficial for society to justify the saving of millions in tax payments: “The Church of Scientology is not a registered charity, since the Charity Commission has ruled that it does not provide a public benefit. Nor are its premises a recognised place of worship.”
Indeed, in 1999, the Charity Commission ruled that the church did not pass the “public benefit” test required for advancing religion as a charitable purpose. He also cited the negative views of Scientology by a majority of English citizens.
I am not familiar with English law on the subject but such a basis for rescinding tax exemption would be rejected in the United States – particularly the unpopularity of the Church with the majority of citizens. Such a test would invite a dangerous level of subjectivity and majoritarian control in the denial of benefits.
Source: Guardian
Skip the country club analogy, how about H&R Block?
They sell no physical product, they sell a service. I pay with after-tax dollars. They have to pay taxes on their income after expenses for salaries, rent, and internally consumed products (like furniture, fixtures and equipment).
What’s the difference between H&R Block and a church? In my view, H&R provides a benefit to society too. But its workers pay taxes, and the company pays taxes, because that is their fair share of the expenses of society, like infrastructure, police protection, military protection, and essentially free courts.
Churches and church personnel take advantage of all of the free use and services too. I disagree with the whole idea that government should be in the business of favoring some services over others.
If something is truly a public benefit to all, the government should run it, like they run the police and run the courts and the military and build and maintain the important roads, and should run the prisons. At least in theory, a government run operation can be subject to the political will of the people.
If it is not that important, or government is explicitly prohibited from it (like religion) it should be left alone. In my view, government should have absolutely nothing to do with religion or churches, and that includes not recognizing any special status that does them any financial favors.
Rob
Churches and other non-profit groups don’t, usually, use their income to produce a goods or service to be sold; they use what they need to function and give the rest to missions, local and international.
Country Clubs and other for-profit groups do not, as far as I know, use their profits for missions to the community. They could, I suppose, arrange for unfortunates in the community to play golf or attend a Club dinner dance, but I don’t see that happen very often. Any charitable expenses they do make are tax deductable, I assume.
I said earlier that the church’s income is from parishoners who already claimed their donation as a tax deduction – not one they paid taxes on.
This is why the church taking their income (donations) and sending it on in charitable expenses is not like a business using a profit to make more goods or services (and more profit) and deducting the costs incurred as a deduction.
And why I said, any profit from fund-raising that is not passed on as charity should be taxed. This is also why churches should pay property taxes. Not all their income is spent in charity; some goes to expand their physical facilities. Those should be taxed because they use the community’s roads and utilites just like any home or business.
I worked as a financial analyst for the City of Boston in the late 70s. Most of their income was from property taxes as they had no city income tax. More than half of the property value within city limits was exempt — the state and federal offices, the universities, the museums etc. Most of their users and employees lived outside the City of Boston.
We used the theory that only the core functions should be tax deductible. Many non profit organizations run units that are almost identical in function with those operated by private organizations. Examples are restaurants, stores, health clubs, printers, parking garages, concerts, insurance companies, ski resorts. The City of Denver owns a ski resort.
We approached management and explained the city’s financial problems and asked them to make voluntary payments in lieu of services and were quite successful.
I heard too that Columbia University in New York City pays property taxes but I don’t know the detail.
I have long believed that the whole Scientology thing is a crock, but then I also believe the same about most other “religious organisations who fail when it comes to the “Practice what you preach” test.
http://africanrecord.com/lets-talk-about-religion-in-africa/
“If it is true that “religion is the opiate of the masses” then religion should surely be unlawful unless prescribed”
Whilst I have no leaning towards any religion, I love the idea of http://www.jedichurch.org/
The comments on this particular post have cheered me up tonight.
Buckeye
What I was saying is that I don’t see the difference between a Country Club and a Church. So why does one pay taxes and the other not.
What you originally said was that the church shouldn;t pay taxes on their donations because the members already paid taxes on that money.
But if I belong to a country club I have already paid taxes on the money I use to pay my dues, so what is the difference?
Buckeye
To my knowledge, country clubs are considered commercial ventures and their dues are subject to standard revenue accounting. The amount of dues, golf/swimming/tennis, dining expenses that are tax deductable for members has changed a lot over the years. I seem to recall significant changes in the 1984 Tax Act and I believe such deductions are now at or very near zero much like taking a client to dinner is no longer 100% deductable.
Rob
What about a country club? The members pay their dues and the CC is taxed on the income of those dues.
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I’m not sure the members can take a charity deduction – maybe a business expense – to avoid taxes. I’m not sure the country club is taxed on the dues. I’ve never belonged to a country club, but it seems the fees work differently – they are a “loan” to the club, not income. Not sure about that, though.
http://www.sbnonline.com/Local/Article/919/82/0/Country_clubbed.aspx
I do think churches should pay property taxes and the country clubs have an interesting take on that, also.
http://www.sbnonline.com/Local/Article/919/82/0/Country_clubbed.aspx
All of which tend to modify the adage “It takes money to make money” to “It takes money to keep money”.
As long as religious organizations attempt to influence our politics? It’s only fair that they be taxed. Most of the larger ones have ignored the entire spirit of the Separation Doctrine in their from the pulpit politicizing. The injury they do to this country can be seen in the highly dubious influence of organizations within our government like C Street and The Family.
And while we’re at it? Organizations that want to flaunt laws like pedophilia is illegal? They should be taxed doubly. With a surtax for silly hats.
[America’s tax laws are designed to favor non-profit and charitable institutions which presumably benefit the community. The buildings of private schools and universities, for example, are exempt from property taxes. Donations to charities like the Red Cross are tax deductible. Organizations which engage in medical or scientific research can take advantage of favorable tax laws. Environmental groups can raise tax-free funds by selling books.
Churches, however, tend to benefit the most from the various tax exemptions available, in particular because they qualify for many of them automatically, whereas non-religious groups have to go through a more complicated application and approval process.
…………
Some groups, like the American Jewish Congress, have made donations to local governments in place of the taxes which they do not have to pay. This shows that they truly are concerned with the entire local community, not simply their own members or congregation, and that they are interested in supporting the government services which they use. ]
http://atheism.about.com/od/churchestaxexemptions/a/churchexemption.htm
Agree with Blouise and rcampbell.
I was piggybacking on rcampbell …
I have never really understood why churches were granted tax exemption and I don’t understand why charitable giving is deductible. Does anyone know the history?
This is the first paragraph of a piece I found on the subject from a site called Heal Our Land Ministries:
“Most churches in America have organized as “501c3 tax-exempt religious organizations.” This is a fairly recent trend that has only been going on for about fifty years. Churches were only added to section 501c3 of the tax code in 1954. We can thank Sen. Lyndon B. Johnson for that. Johnson was no ally of the church. As part of his political agenda, Johnson had it in mind to silence the church and eliminate the significant influence the church had always had on shaping “public policy.”
From there the article went on to claim that churches never needed the tax exemption because churches, they say, are already Constutitionally outside the government’s taxxing jurisdiction as a result of the phrase “..shall make no law restricting…etc.”
So, which is it? Are they finally acknowledging a formal seperation of church and state? If that’s the case, let them speak all they wish, but keep 100% away from our schools, government buildings, out of our secular Pledge of Allegiance and off our money.
Buckeye
The only problem is that their income is almost all from parishioners, who have already claimed it as a tax deduction for charity, so it’s not exactly the same as a business producing something and deducting expenses.
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What about a country club? The members pay their dues and the CC is taxed on the income of those dues.
I really don’t see the difference.
Tony C
what moneys they expend on charitable causes should be treated as deductible from income like any normal cost of doing business
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I agree that the churches should not be tax exempt, in general.
The only problem is that their income is almost all from parishioners, who have already claimed it as a tax deduction for charity, so it’s not exactly the same as a business producing something and deducting expenses.
When the church does do something that produces a profit, like Bingo or other fundraising activites, then your deduction should apply and the church should be taxed on the remainder.
I guess I don’t understand how giving churches tax exemption in the USA is allowable under the separation of church and state. Freedom of religion doesn’t mean *preference* for religion, and tax exemptions based on belief systems provide a monetary benefit and therefore a preference for the belief system. Isn’t it an “endorsement” of religion?
Churches should be treated like any other business; what moneys they expend on charitable causes should be treated as deductible from income like any normal cost of doing business. A bakery deducts the costs of its ingredients (and salaries) from its revenue to compute income, and pays tax only on that. Churches should do the same.
I cannot organize a bunch of physicists around the belief that string theory is fundamentally flawed and loop quantum gravity is the only true path and thereby claim tax exemption; because that is not a church or religion or supernatural belief.
I believe tax exemption confers financial benefit upon churches and religion and supernatural belief and puts the government in the position of advocating for religion over science and violates the separation of church and state.
What is the difference between a cult and a religion?
That would get some of the churches in a real pickle….I can think of a few…
The important thing to note here is that the UK has no equivalent of first amendment protection for religious practice, so a vast amount of American jurisprudence related to protecting religions from unequal treatment by the state simply does not apply.
In fact, the opposite case applies in the UK. Not only is the state not forbidden to establish a religion, it has official established churches in England and Scotland (Parliamentary acts over 100 years ago disestablished the church in Wales and Ireland). In England, the monarch is the titular head of the established church (a different arrangement applies to the Church of Scotland owing to the presbyterianism of the latter).
There is a potential issue here related to Article 9 of the European Convention on Human Rights, incorporated into UK law as the Human Rights Act 1998. I would expect to see the scientologists take this case eventually to the European Court of Human Rights in Strasbourg, though I don’t think they could win on a question of charitable status.