Via Machines Like Us, I learned of this article that points out that the cost of the tax exemptions granted to religion groups could work out to as much as $71 billion per year. Both articles were based on a study by Ryan T. Cragun, Stephanie Yeager, and Desmond Vega at the University of Tampa that was published in Free Inquiry, put out by the Council of Secular Humanism, so the exact figure may be challenged by those who claim that it is not an impartial source.
But there is no question that the amount must be substantial. What I don’t understand is why religious groups have tax-exempt status at all. There seems to be no justification for it in the least. In fact, this exemption seems to attract numerous charlatans and conmen who use their tax-exempt religious status to live lives of luxury on the backs of their poor gullible followers. But the courts and public opinion have been wary of removing this obvious conflict in the separation of church and state.
One could make the case for tax-exemptions for charitable institutions, though here too there are numerous frauds.
What I would like to see is that tax deductions should be given only for the amount of the donation that actually goes for charitable work and that this should apply to religious organizations as well. Currently charities are required to file paperwork with the IRS that is reported publicly that shows how much of the money collected goes towards actual charitable works and how much goes towards salaries, fund-raising, and other overhead costs. Most donors don’t bother to seek this information, which is what allows some charities to pay huge salaries and incur extravagant expenses.
If, on the other hand, donors are allowed to deduct only that portion of their donation that went towards actual charitable work, and charities were required by law to give them that information when they sought donations, that would shift giving towards the better-run and worthy charities. If one charity allowed you to deduct only 20% of your donation but another allowed 60%, it is clear which one would get more money and this would be an incentive for charities to be leaner.
Religions should not be able to use their charitable work as a justification for making all their income tax-exempt since only part of their money goes for charity and only that should be allowed.