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Religious Freedom and the IRS


Recently, a coalition of right-wing pastors decided to make a frontal assault on the long-standing policy that charitable institutions, including churches, are prohibited from endorsing candidates if they want to keep their tax-free status. These pastors defied that law by explicitly endorsing John McCain from the pulpit.

Their argument, as developed by the Alliance Defense Fund, is that they are exercising their First Amendment right to speak from the pulpit about the moral qualifications of candidates for public office, notwithstanding the tax law.

ADF Senior Legal Counsel Erik Stanley, says, “Pastors have a right to speak about Biblical truths from the pulpit without fear of punishment. No one should be able to use the government to intimidate pastors into giving up their constitutional rights. If you have a concern about pastors speaking about electoral candidates from the pulpit, ask yourself this: should the church decide the question, or should the IRS?”

So, what’s the problem? Stanley points out that it was only in 1954 that the law was changed to prohibit churches from direct advocacy for candidates. He holds this law to be an unconstitutional restraint on free speech. He further argues that “Churches are exempt from taxation under the principle that there is no surer way to destroy religion than to begin taxing it.” But on this point he’s shifted his ground from a constitutional argument to a prudential one: if we value churches and religion, we shouldn’t tax them. He’s not necessarily saying that taxing them is unconstitutional, just unwise.

If the ADF position prevails (and with our present Supreme Court, it just might), it effectively ends the distinction between charitable organizations and political ones. If churches and other charitable entities are permitted to engage in political advocacy, what distinguishes them from parties or political action committees? Why should some be taxed and not others? Why should donations to churches be tax-deductible while political donations are not?

Suppose we decide to tax them all, and deny tax deductions for donations to all? This is scarcely what ADF wants, but a decision specifically to exempt churches from taxation would on its face be a “law respecting the establishment of religion,” which is specifically prohibited by the First Amendment. The government is not permitted to discriminate in favor of religion in general, any more than it may establish a particular religion over others. If churches and other charitable organizations are permitted to engage in the full range of political action, then they should be no more immune from taxation than any other entities.

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Taxing all organizations, whether religious, educational, or political, would certainly have negative consequences for one of the most distinctive aspects of American society: our willingness to support private charities with our time and our money. Alexis de Tocqueville remarked on how Americans organize to accomplish collective goals without waiting for the government to take care of them. Would we be so eager to support such efforts if our donations were not tax-deductible?

Conversely, we could decide to treat all the same by taxing none: neither charitable nor political donations would be subject to taxation, nor would the organizations receiving such donations. Since the Supreme Court has already ruled that it violates free speech to limit the size of donations, if they were also made tax-deductible, it might well further increase the pernicious power of money in politics. And pastors might find themselves tempted in new ways by big politically motivated donations to shade their religious preaching in favor of the donors.


I think the ADF should take care what they wish for.

John Peeler

John Peeler is a retired professor of political science at Bucknell University, specializing in Latin American and international affairs. His op-ed essays have appeared in The Christian Science Monitor and USA Today, as well as many in local papers here in central Pennsylvania where he lives. He has had letters published in both the New York Times and the Washington Post.

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