Separation of church & state – NOT!
Let’s talk about vulnerabilities we might not notice. The U.S. government underwrites our churches in ways that might not last forever. Some are shaky as I write.
Neil Cole, in his book Rising Tides, puts this eloquently. But I can summarize pretty well. Much like the church in Russia before the Soviet Revolution, we are vulnerable to changes in our government in at least three ways, and I’m not talking about freedom of speech.
No Tax on Clergy Housing
I’ve personally benefited from the clergy housing allowance as a government-supplied tax shelter. It enabled me to purchase houses I could not otherwise afford. And we bicycled those houses to an even more significant advantage by buying and remodeling homes in need of repair when we were young and had more energy. Each time we sold, we pulled some money out of the transaction to invest in stocks, then we purchased another home in need of repair—all of this underwritten by the IRS tax code.
The church also benefited wonderfully. Because of the housing allowance, they could pay staff pastors less, which allowed us to grow larger teams.
No Tax on Church Buildings and Land
In Hermosa Beach, California and Kaneohe, Hawaii, we were blessed with properties commanding incredible ocean views—views that would result in much higher property taxes than similar properties lacking the view. But, because of laws written many decades ago, we paid no property tax.
No Tax on Church Income
Every time I visit my favorite restaurant (the one with those golden arches), a few cents get dispersed between city, county, state and federal governments. Business income is taxed while church income is not. Again, the church thrives on a huge benefit. But what if these three evaporated?
BTW, I favor all three subsidies, so don’t get mad at me as if I’m lobbying for their removal. I just think they represent vulnerabilities.
We live in a divided nation, and much of the division hinges on people’s views of religion, not just Christianity but religion in general. All religious entities rely on these benefits. Consider the animosity toward the church and then consider that everyone outside a religious organization pays a little extra tax because of our advantages, and you get the picture.
So, the problem isn’t the benefits, but the possibility that they could go away. While I lived in Hawaii, one governor tried to tax church income, so this is already on the table. It turns out he would have had to tax all non-profits if he came after churches, so he failed. For that reason, this particular benefit would be the last to go if we came under pressure.
But what would happen to your church if you had to pay property taxes? They do in most countries. What about the clergy housing allowance? Would taking that away shrink your staff and programs as much as an applied property tax?
I’ll admit to being a little hypocritical here. I favor these benefits, while I also favor separation of church and state. Again, I’m not lobbying for us to lose them. However, it is time to consider the possibilities, which lead me to several questions:
- Do you have deep enough financial reserves to survive an unexpected long-term hit?
- How could social media plus the advent of interactive video help you become less dependent on large buildings and drive-to programs and events?
- Are you utilizing new technologies for maximum impact? Paul used the mail to a far more significant effect than the rabbis who went before him. The church jumped all over Gutenberg’s invention to a vast cultural advantage. The third radio station built in Los Angeles was owned and operated by a church. Exponential taught me to use Zoom several years before I could see it benefiting our churches—the pandemic caught me up.
- What would happen if one of the Covid-19 variants nullified the vaccines which now protect us?
- Can your church survive a massive fire if you live in the western United States? Or a hurricane in the south or even the northeast? Would your church still be church if you lost your building to any disaster?
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