Top Pro & Con Arguments


Exempting churches from taxation is constitutional and maintains a long American tradition.

Exempting churches from taxation upholds the separation of church and state embodied by the Establishment Clause of the First Amendment of the U.S. Constitution. The U.S. Supreme Court, in the May 4, 1970 majority opinion written by Chief Justice Warren E. Burger in Walz v. Tax Commission of the City of New York, stated: “The exemption creates only a minimal and remote involvement between church and state, and far less than taxation of churches. It restricts the fiscal relationship between church and state, and tends to complement and reinforce the desired separation insulating each from the other.” [5]

Requiring churches to pay taxes would endanger the free expression of religion and violate the Free Exercise Clause of the First Amendment of the US Constitution. By taxing churches, the government would be empowered to penalize them if they default on their tax payments. The US Supreme Court confirmed this potential in McCulloch v. Maryland (1819) when it stated: “the power to tax involves the power to destroy.” [12] [13]

Further, a tax exemption for churches is not a subsidy to religion, and is therefore constitutional. As explained by Chief Justice Warren E. Burger, “The grant of a tax exemption is not sponsorship, since the government does not transfer part of its revenue to churches, but simply abstains from demanding that the church support the state. No one has ever suggested that tax exemption has converted libraries, art galleries, or hospitals into arms of the state or put employees ‘on the public payroll.’ There is no genuine nexus between tax exemption and establishment of religion.” [5]

The only constitutionally valid way of taxing churches would be to tax all nonprofits, which would place undue financial pressure on the public charities that aid and enrich society domestically and abroad. If only churches were taxed, government would be treating churches differently, purely because of their religious nature. [20][21]

Besides, American churches have been tax-exempt for over 200 years, yet there are no signs that America has become a theocracy. If the tax exemption were a serious threat to the separation of church and state, the US government would have succumbed to religious rule long ago. As the Supreme Court ruled in Walz v. Tax Commission of the City of New York, “freedom from taxation for two centuries has not led to an established church or religion, and, on the contrary, has helped to guarantee the free exercise of all forms of religious belief.” [18]

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