Is there a neutral way of deciding whether or not to treat churches as charitable organisations and therefore tax exempt?
An interesting discussion broke out over at M and M recently about a guest post by bethyada on whether or not the tax exempt status of churches directly costs taxpayers. I’ll let his piece speak for itself and won’t really get into the actual subject of it, because in the comments section a different issue came up that I’d like to put out there for your consideration.
One of the correspondents was insistent that the tax exempt status of churches amounted to a “privilege” that nobody else gets, and that no organisation should have tax exempt status by virtue of of being a church – they had to actually be charitable.
As many readers will know, a lot of churches have food banks, they run programmes for children, they might provide counselling, among other things. But are churches already charitable, regardless of what else they do? According to New Zealand law, a charitable purpose (for tax exemption purposes) “includes every charitable purpose, whether it relates to the relief of poverty, the advancement of education or religion, or any other matter beneficial to the community” [Charities Act 2005, Section 5(1)].
Complaining about the tax exempt status of churches, this fellow said “a lot of their work is not really charitable, but religious.” Now, there’s a clear legal error here. According to New Zealand law the advancement of religion is a charitable purpose. But that aside, it was clearly being suggested that the advancement of religion should not be regarded as a charitable purpose. Important to note is that this was not merely being offered as a personal view that other people could legitimately not hold. Instead, what was being made was the claim that we should have a legislative change so that the advancement of religion is not regarded as a charitable purpose according to law – the law must exclude religious purposes as being “beneficial to the community.”
Having some experience in the issue of religion in the public square and the question of state neutrality, I have found it surprisingly common for people to advance a law or policy with obvious religious implications, while being quite certain that the policy is religiously neutral. Part of the problem is the natural insularity that many of us have – if something doesn’t affect us personally, then we’re much less likely to be sensitive to the implications that it has for others. For example, a person who ostensibly rejects religious belief and wants churches to be stripped of tax-exempt status might not be as bothered by the fact that the New Zealand Humanist Society has tax exempt status. According to the information they give the world on “who we are,” “The Humanist Society of New Zealand (Inc) is an organisation that promotes Humanist philosophy and ideals.” That is the only stated goal on that page. Similarly, the New Zealand Humanist Trust is a separate tax exempt charitable organisation. Its goals are unambiguous:
The purpose of the Trust is to:
Provide funding for seminars and other educational activities to promote public understanding and discussion of ethics and Humanism;
Assist any charitable activities by any Humanist Group within New Zealand;
Make loans or advances to any Humanist Group or similar non-profit body in New Zealand for projects similar to the above.
This qualifies as something of benefit to the community for tax purposes, allowing these organisations charitable tax exempt status.
Can tax exempt laws be neutral on religion?
It’s possible that the application of a law like this one, in reality, must take some stance on religion. Let’s imagine that the law were stated more simply, and all the examples of charitable purposes were excluded. Imagine that it said that a charitable purposes for tax purposes “includes every charitable purpose, any matter beneficial to the community.” This, after all, is what it clearly means. It only mentions religion, education etc as examples of this general class of purposes. Now ask: Does this definition include the purposes that make a church a church? Set aside things like feeding the poor, running employment training programs and so on. Just think of those things that are more or less unique to churches of one sort or another: Worshipping God, providing Christian teaching and Christian counsel. Add to the list if you need to, but you get the idea. The question only has two possible answers: Do these things provide benefit to the community?
If Christianity is really true then the benefit to the community cannot be overstated. Churches share a way to be reconciled to God and have eternal life!
Granted, some people who reject religious belief will still say yes, because they take an anti-realist stance to religion. Regardless of the truth of its claims, they might think, religion offers moral guidance, hope and so forth. And as you’d expect, Christians themselves will be very likely to say yes. Of course these things are beneficial to people. Those who say “no” are almost certain to be people who reject religious belief. And it is obvious at once that to make this claim about these religious activities – that they offer no benefit to the community – is not religiously neutral. If Christianity is really true then the benefit to the community cannot be overstated. Churches share a way to be reconciled to God and have eternal life! If Christianity is false then it might offer benefit to the community, and it might not. But to say that these things do not benefit the community is to take the religious stance that Christianity is not true.
Of course it’s not just about Christianity. For better or worse, pluralism is a fact, so the government doesn’t discriminate between religions. Any church, or faith community can make use of tax exempt status. The question is: How can we refuse them the ability to do so without enshrining an anti-religious belief in law?
Your comments are welcome.