Top Pro & Con Arguments
Most churches follow the rules and would struggle to exist without the tax exemption. The IRS should enforce the rules rather than eliminating the tax exemption wholesale.
Small churches, already struggling to survive, would be further endangered by a new tax burden. A 2020 survey by the Hartford Institute for Religion Research found that the median income for churches was $120,000, down from $150,000 in 2010. However, 46% of churches have annual revenues of $100,000 or less. If these churches were obliged to pay taxes, their existence would be threatened and government would thus be impeding religious expression.
Withdrawing the “parsonage exemption” on ministers’ housing would cost American clergy members $2.3 billion over five years, which would be a major blow to modestly paid people who dedicate their lives to helping people in need. According to the National Association of Church Business Administration (NACBA), the average American pastor with a congregation of 300 people earns less than $28,000 per year. The NACBA also states that one in five pastors takes on a second job to earn extra income, and that only 5% of pastors earn more than $50,000. D. August Boto, Executive Vice President and General Counsel of the Executive Committee of the Southern Baptist Convention, explains, “the housing allowance is critically important for making ends meet—it is not a luxury.”
Plus, the vast majority of churches refrain from political campaigning and should not be punished for the actions of the few that are political. The Internal Revenue Code (IRC) gives churches the freedom to either accept a tax benefit and refrain from political campaigning like all other nonprofit charities, or reject the exemption and speak freely about political candidates.
There are 450,000 churches in the US, yet only 500 pastors made political statements as part of Pulpit Freedom Sunday on Oct. 2, 2011. The tax exemption should remain in place to benefit the vast majority of churches, while the IRS should enforce the Johnson Amendment so churches not following the rules are no longer tax-exempt.Read More