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Nov 24 2013

Important legal victory involving tax breaks for religion

The way that religious people get tax breaks in the US is a disgrace. But Barbara B. Crabb, US District Court judge in Wisconsin, ruled yesterday that the tax exemption given to clergy for their housing allowance is unconstitutional. This allowance is taken advantage of by about “44,000 ministers, priests, rabbis, imams and others” and “some clergy members could experience an estimated 5 to 10 percent cut in take-home pay.”

The suit was brought by the co-founders of the Freedom From Religion Foundation who argued that it was unfair that clergy got this benefit while the heads of secular organizations (like them) did not, and that this practice violated both the Establishment Clause and the Equal Protection Clause.

You can see the text of the ruling here. The judge relied heavily on the argument that the constitution requires neutrality in the way that it treats religious and non-religious organizations, using a modified version of the Lemon test to judge Establishment Clause violations.

Plaintiff Freedom from Religion Foundation, Inc. and its two co-presidents, plaintiffs Annie Laurie Gaylor and Dan Barker, brought this lawsuit under the Administrative Procedure Act, 5 U.S.C. § 702, contending that certain federal income tax exemptions received by “ministers of the gospel” under 26 U.S.C. § 107 violate the establishment clause of the First Amendment and the equal protection component of the Fifth Amendment.

With respect to the merits, I conclude that § 107(2) violates the establishment clause under the holding in Texas Monthly, Inc. v. Bullock, 489 U.S. 1 (1989), because the exemption provides a benefit to religious persons and no one else, even though doing so is not necessary to alleviate a special burden on religious exercise. This conclusion makes it unnecessary to consider plaintiffs’ equal protection argument.

Some might view a rule against preferential treatment as exhibiting hostility toward religion, but equality should never be mistaken for hostility. [My italics-MS]

It is important to remember that the establishment clause protects the religious and nonreligious alike. Linnemeir v. Board of Trustees of Purdue University, 260 F.3d 757, 765 (7th Cir. 2001) (“The Supreme Court has consistently described the Establishment Clause as forbidding not only state action motivated by a desire to advance religion, but also action intended to ‘disapprove,’ ‘inhibit,’ or evince ‘hostility’ toward religion.”). If a statute imposed a tax solely against ministers (or granted an exemption to everyone except ministers) without a secular reason for doing so, that law would violate the Constitution just as § 107(2) does. Stated another way, if the government were free to grant discriminatory tax exemptions in favor of religion, then it would be free to impose discriminatory taxes against religion as well.

The judge rejected the argument that Gaylor and Barker could also be considered ministers and atheism a religion and hence they could have taken advantage of the tax exemption if they had wanted to and thus has no basis for suing.

This is an important ruling but of course will be appealed by religious groups. Religious groups may love their gods but they love their tax breaks more and will fight to the death to keep them.

40 comments

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  1. 1
    Al Dente

    Religious groups may love their gods but they love their tax breaks more and will fight to the death to keep them.

    Money and power are the motivations for all too many religious leaders.

  2. 2
    Randy Lee

    It’s interesting that the judge didn’t just rule that denying the heads of the secular organizations the same equal tax deduction that religious leaders recieved was unconstitutional. That way everyone would be a winner. It appears this judge prefers to aid in the collection of as much tax/theft under color of law as possible. Just goes to prove another “collectivist” is at work under the guise of justice.

  3. 3
    Chiroptera

    Actually, what it goes to prove is that people should pay their taxes regardless of their job title. Whether or not the current tax rate is too high may be a reasonable thing to debate; arguing that “religious leaders” should have a special exemption that others do not is silly, in my opinion.

  4. 4
    machintelligence

    Sorry, Randy. Taxes are not theft; they are the dues we pay for civilization.

  5. 5
    Mano Singham

    I think that it should be fairly obvious why. Religious groups have been given special tax exemptions under under interpretations of the provisions of the Establishment Clause that do not apply to other groups. The judge could rule that all taxes are unconstitutional but that was not the argument made before her so the issue is moot.

  6. 6
    Vicki

    Interesting but entirely irrelevant. The judge did not say that it would be unconstitutional for Congress to amend the law to give everyone an income tax credit equal to their housing expenses. (They won’t do it, of course, and it would almost certainly be bad policy to do so–but being bad policy doesn’t make something unconstitutional.) But there is no reason why “ministers and certain employees of 501(c)3 nonprofit organizations” should be a privileged class either.

  7. 7
    AsqJames

    This is an important ruling but of course will be appealed by religious groups.

    Do religious groups have standing to appeal?

    My understanding was that the defendant(s) in the case were the US government (and/or its agents – i.e. the IRS), not any religious body. If the IRS start implementing the ruling, I can envision a new suit claiming that taxing them the same as everyone else amounts to a breach of the free exercise clause (which I disagree with), but can they appeal a ruling in a case in which they were not directly involved?

  8. 8
    smrnda

    Wow, that ‘collectivist’ label getting thrown around, as well as the usual “tax == theft” rhetoric. I should write an AI for generating these things.

  9. 9
    raven

    This is an important ruling but of course will be appealed by religious groups.

    I’m sure it will be appealed. To the US Supreme court if necessary. The churches have huge amounts of money and lots of law firms to advance their cause. Which seems to be collecting as much money as possible without paying taxes on it.

    As soon as the religions get over their shock. They are so used to xian privilege that it always stuns them when they lose it. Hard to say how the US Supreme court will rule.

    (“The Supreme Court has consistently described the Establishment Clause as forbidding not only state action motivated by a desire to advance religion, but also action intended to ‘disapprove,’ ‘inhibit,’ or evince ‘hostility’ toward religion.”).

    The reasoning behind this ruling seems simple and sound. I can’t see what arguments and claims the churches will make. But I’m sure they will think of something.

  10. 10
    raven

    You have your John Galtian free will to just walk your talk and leave for one of the Loonytarian paradises with low or no taxes. With 220 countries in the world, there are always a few of those.

    Try Somalia, the current Loonytarian leader. Taxes are about zero.

    What you trade for low taxes is electricity, clean running water, police forces, and most of all, lifespan. The average lifespan in Somalia is 47 years. But so what, trading 30 years of life for low taxes has to be attractive to someone.

  11. 11
    raven

    Given the dollar figures at stake, Gaylor expects clergy members to pressure the White House to appeal the decision to the 7th U.S. Circuit Court of Appeals in Chicago.

    Ironically the FFRF is suing the Kenyan, Moslem, terrorist atheist adminstration over this tax exemption and they are likely to appeal.

  12. 12
    Randy Lee

    Oh! what hypocrisy. If the gun of government wasn’t in the room 99 plus percent of the people wouldn’t pay taxes. They do it because of the sociopaths in uniforms with guns. This is no voluntary system. People pay and give allegiance to their master government out of fear . What you are really talking about when you start talking about the collection of taxes is pointing guns at people who are acting peacefully. You are discussing the initiation of force against another human in order to collect some of their property. What makes lawyers in dresses (judges) think themselves so wise as to be so arrogant as to engage in such immorality and then to spread such political philosophy as if it is the only way society should be organized.

    Watch http://www.youtube.com/watch?v=NwztaQgv3-Y

  13. 13
    Randy Lee

    Well while you’re at it, try watching the following

    http://www.youtube.com/watch?v=NwztaQgv3-Y

    then within that context explain why you can logically declare that the comparison of taxes with theft is mere rhetoric.

  14. 14
    Randy Lee

    Tell me why it would be bad policy for real people to be able to deduct the cost of their housing expense, living expenses, etc. when artificial persons (corporations) are allowed to deduct all their expenses before determining their gross income. (as distinguished from gross reciepts). Where is the equal protection under the law for these persons?

  15. 15
    Chiroptera

    Rany Lee: Oh! what hypocrisy.

    What hypocrisy do you see in that comment? Do you know what the word means?

  16. 16
    raven

    why you can logically declare that the comparison of taxes with theft is mere rhetoric.

    This isn’t even wrong. It is just really stupid.

    Because there is a quid pro quo, a trade. We pay taxes and in return we get a modern Hi Tech nation state and a civilization. This is a democracy. We consent to be governed and vote on our leaders.

    No taxes = No country.= No civilization

    I see you haven’t managed to realize you can leave for one of the Loonytarian paradises any time. Or just head out into the outback, which people do occasionally like Chris McCandless. They usually end up dead but that is your Loonytarian freedom. Oh well, I’m bored already with SICOTI, Someone is crazy on the internet.

  17. 17
    Randy Lee

    Depending on your data source the US is somewher between the 29th and the 50th in lifespan. Do we really want history to record that our increased lifespan, the fact that we have electricty and running water is the result of our organizing society by the initiation of force at the point of a gun? Your taxes go to murder people all over the world, including right here under color of “LAW”. Since you are so proud of your affluency will you take responsibility for your part? How immoral does our governmental system have to become before you are able to see the lunacy of this violent approach?

  18. 18
    Randy Lee

    The hypocrisy is to believe that if I come to your house with a gun and collect money for a cause that I and others think is good for society then that is a crime, but if government enforcers in uniforms with some words on paper call “law” as their justification and proof of supposed authority come and take your property then that makes it ok and we should all defer to that line of thought, by calling such a fiction a “social contract”.

  19. 19
    dickspringer

    If you think government taxation is bad, try anarchy. I can suggest places to go to check it out, such as rural Somalia.

    I believe laws should serve the general welfare. I see no justice in permitting the accumulation of inherited wealth and present wealth inequality in the US is the source of many of our problems.

  20. 20
    Randy Lee

    Who says this is a democracy? Two wolves and a lamb deciding on what to have for dinner????

    It is apparrant you either didn’t watch the short video I posted, you didn’t listen, or you are just incapable of understanding that no group of people are vested with authority to violate the sacred and unalienable rights of life, liberty, and property of any individual. Might of majorities does not make right.

  21. 21
    dickspringer

    Yes, but longer-life populations are all in countries with general health insurance supported by taxes.

  22. 22
    Randy Lee

    I can see that you fail to understand what anarchy really is. Didn’t you listen closely to the video I posted? True anarchists believe that it is never proper to initiate force against another human being. For a better understanding of this go to http://www.freedomainradio.com/

    There are many resources there on how a stateless society would operate. I would recommend to first read or listen to the book Universally Preferable Behavior.

    By the way, would you advocate the initiation of force under color of law against me if I am conducting myself peacefully?

  23. 23
    Randy Lee

    I wonder what portion of my last post your response of “Yes” fell into agreement with. At this point I will assume you are in agreement.

  24. 24
    Mano Singham

    The defendants were the Treasury Secretary and the IRS commissioner and they, as the losing side, automatically have standing to appeal since they had standing in the lower court. The Appeals Court can rule that they don’t have standing but I doubt that happening.

    If they don’t appeal and start taxing religious groups equally, those religious groups can go back to lower courts and sue the government that taxing them violates the Establishment Clause.

  25. 25
    smrnda

    Randy, the US exists because people with guns showed up, shot a lot of people, and then decided to found a government which treated their property claims as legitimate. At some point in time, all political power comes from the barrel of a gun.

    Civilization requires things like laws, infrastructure, services like police, fire, health care. There is no way anyone can exist in a world where they agree 100% to all rules, laws, taxes and conditions to which they are subjected because reality doesn’t work that way. Civilization requires necessary compromises since self-reliance is a fiction, and the notion of a totally free and voluntary exchange is a fiction since, state or not state, we’re all subject to conditions and limitations we cannot avoid beyond our control. If you’d prefer no State, move to Somalia. I hear it’s a great Stateless Libertarian Paradise.

  26. 26
    smrnda

    The idea of property is a social construct – property rights are defined by rules that have, can and do change. Rights are social constructs and are a product of a social contract where we end up having to make some compromises. Given that I do not believe in a Supernatural World nor a World of Ideal Platonic Forms, the idea of ‘inalienable’ and ‘sacred’ rights is just nonsense. We thought up the rights we wanted and claimed them.

    If you wish to share a country with me, we will have to bargain on rights and responsibilities. I have no problem with the existence of citizens being assigned obligations, provided that an open discussion takes place and that no citizens are subjected to worse requirements than others. I know quite a few Israelis. Israeli foreign policy aside, Israel requires that citizens do mandatory military service. Are they all slaves because of that? No, they have agreed to different trade-offs than in the US. they also get some perks we don’t.

    In a democracy people will end up disagreeing. This is also why we have laws defining what rights people have and why we have a judicial system, to protect rights which are enumerated. You have your own vision of what government should do, but why do you get to impose it on other people who disagree? Civilization requires compromise.

    Anarchism might be cool to talk in the mosh pit, but I’m unwilling to abandon civilization to worship abstract concepts. The only rights that really exist, in my mind, are ones you can eat, the rest is empty rhetoric.

  27. 27
    Chiroptera

    That’s not hypocrisy. I’m not sure what the proper word for it is since I’m not sure why you don’t see the distinction, but it definitely isn’t hypocrisy. Hypocrisy involves saying one thing while hiding one’s true beliefs or one’s actions. If one is open that one believes in taxation while supporting laws against robbery, then that, by definition, isn’t hypocrisy.

  28. 28
    smrnda

    Your ‘point of the gun’ rhetoric is just rhetoric. If we didn’t have that, we’d be Somalia.

    I would prefer that my taxes quit going to support war and mass incarceration, but living in some sort of state-less wilderness without infrastructure and such is deciding that since occasionally governments can be bad we should go back to the stone age.

    On some level, all governments have to be willing to use violence since people do decide to do things like kill people, beat people up, fire pregnant women for throwing up on the job, drive cars while drunk, beat their kids and serve food made in a filthy rat infested kitchen to unwitting diners. Civilization *HAS TO* subject people to rules that certain people may disagree with because negative behaviors have to be prohibited. Total freedom is a pipe dream. I live in the real world.

  29. 29
    thewhollynone

    This is an interesting case! Thanks, Mano, for bringing it to our attention. I will send the FFRF a small monetary donation and a note of thanks. If every secularist would do that when one of these cases comes up to trial, then FFRF, ACLU, and other “progressive” legal outfits would be encouraged to file these suits whenever they can find plaintiffs with standing.

    With this judge’s ruling, this case could get to the SCOTUS with its majority of five practicing Catholic males. Upholding this ruling would impact the Catholic Church the least as its clergy, being nonfamilial, are most often housed on tax-exempt church property, and even those who do not take vows of poverty are usually paid so little that they owe no income taxes. Protestants, Mormons, Scientologists, Muslims, and most other religions will be much more severely impacted and disadvantaged in relation to Catholics if this ruling is upheld. So there’s a chance that the SCOTUS may go our way on this. And if that happens, the Evangelical-Catholic coalition may be severely strained, if not outright busted. We can hope!

  30. 30
    Randy Lee

    It is extremely sad that you can speak so nonchalantly of the genocide/democide of the Indian peoles of this continent as if such methodology is acceptable in the establishment of the political power of this nation.

    You speak of the requirements of civilization as if such can only be provided by the power of the gun; as if without bands of robbers known as government, humanity would not have ever progressed. You state “Civilization requires necessary compromises”. If you are familiiar with the legal fiction known as the “doctrine of necessity’ then you know it is axiomatic that “necessity knows no law”. So you claim it is necessary to steal/tax those who do not consent in order to protect them from such things as theft.

    What sort of morality do you hope to instill in people if you exhibit double standards? Tell your kids never to initiate force, then teach them it is somehow okay if those in uniforms with claims of authority do it. Just who authorized them to act immorally and initiate force? Was that your fictional social construct of delegated authority where you yourself never had any authority to delegate.

    For instance where does government obtain the monopoly authority to generate fiat money out of nothing when none of the principals of government (statists like you) do not have authoity to create money. You seem to like double standards when they suit your political ideals.

    You want to think yourself civilized, while at the same time advocating the initiation of force against your fellowman who only desires to live in peace. What hypocrisy! Is this the sort of morality you wish to impose in your vain attempt to establish your political ideals? Talk about lunacy.

  31. 31
    Randy Lee

    You state “Civilization *HAS TO* subject people to rules that certain people may disagree with because negative behaviors have to be prohibited.”

    Does that include subjecting those persons claiming authority to the same rule of law that is imposed upon everyone else?

  32. 32
    CaitieCat, in no way a robot nosireebot

    Oh, Mano, I’m so sorry to see you’ve got an infestation of libertarianism in your comment threads! That really sucks. S. randii is a persistent and insidious infection, too.

    Take two cc of Marxism, and call me in the morning.

  33. 33
    left0ver1under

    I can see three inevitable results of this:

    (1) False claims of “oppression” of religion, the pretense that taxable income isn’t. NBA referees tried this same stunt back in the 1990s (pocketing benefits without claiming them) and the IRS nailed them to a backboard (as opposed to a cross).

    http://www.nytimes.com/1995/02/13/sports/irs-investigating-nba-referees.html

    (2) Cults countersue and/or religious “leaders” refuse to pay up. They’ll call it an “issue of conscience” but that won’t fly.

    (3) There will be a number of arrests, of priests, pastors, rabbis, imams and their ilk. They will start dipping into their religions coffers to “suppliment their income”, or they will personally pocket money that was supposed to go to charities, food banks and the like. There will be investigations and arrests when the religions start noticing a drop in revenues. Like all organized crime, religions are thieves who hate it when other thieves steal from them.

  34. 34
    Raging Bee

    If the gun of government wasn’t in the room 99 plus percent of the people wouldn’t pay taxes. They do it because of the sociopaths in uniforms with guns.

    No, we do it because we know it’s necessary. That’s why we elect a government that uses force to collect taxes.

    People pay and give allegiance to their master government out of fear .

    People organize and support governments because we know we need them. If you don’t understand this simple and obvious point, then you have no clue how humans function outside of your momma’s basement.

    You want to think yourself civilized, while at the same time advocating the initiation of force against your fellowman who only desires to live in peace.

    No, we advicate the use of force against those who DON’T want to allow the rest of us to live in peace.

  35. 35
    Raging Bee

    There are many resources there on how a stateless society would operate.

    Then how come we never see a stateless society actually operating?

  36. 36
    Raging Bee

    Randy, if you want less government, MOVE TO SOMALIA!

  37. 37
    Raging Bee

    Shorter Randy Lee: “Thief! Thief! Thief! Taxes! We hates it! We hates it! We hates it forever!”

  38. 38
    Randy Lee

    Chiroptera wrote on
    November 24, 2013 at 8:21 pm

    “That’s not hypocrisy. I’m not sure what the proper word for it is since I’m not sure why you don’t see the distinction, but it definitely isn’t hypocrisy. Hypocrisy involves saying one thing while hiding one’s true beliefs or one’s actions. If one is open that one believes in taxation while supporting laws against robbery, then that, by definition, isn’t hypocrisy.”

    Ther are different forms of hypocrisy. Imagine a Christian or Jew that claims to believe in the commandment “Thou shall not kill”. But then double-mindingly, such a man says it is okay to kill if the God of the Bible says to go kill. The Bible is full of such hypocrisy. Such a man is a hypocrite because he seeks to make exceptions to the principle he claims to believe. In this instance it is the ‘God” exception. You have chosen to make the “government” exception.

    The same is true with respect to the taking of another’s property. And if you were to allow yourself to be faithful to first principles you would be able to clearly see that since it is immoral for you as an individual to force me to make a tax contribution for some purpose you deem worthy, then the fact that you and others may outnumber me, and call your association a Democracy, your strength in numbers, your political might, does nothing to justify or moralize your corporate actions.

    This is why it is Hypocrisy. Government is at its very core sustained by double-standards. But in actuality government is merely a concept and doesn’t even exist in the real world. What exists are men and women with guns and pieces of paper containing words called revised laws that these men and women delude themselves into believing grant special privileges or monopolies to those in uniform to act in ways that are deemed criminal for everyone else.

    And you and people like Raging Bee, and others here are so brainwashed that you are incapable of seeing your own hypocrisy. I was once just like you, arguing steadfastly the statist position. But thankfully I came to see that First Principles of morality needed to be applied universally. Hopefully one day you too will come to see.

  39. 39
    Randy Lee

    Cat, you should know that S.Libertii has been historically confirmed and proven to be much more persistent and infectious than S.randii. S.randii is merely a carrier gene. None of the isms ever prescribed have been successful in completely eradicating the primal desire incurred by this infection. Only weak minded patients are controlled by the power of the isms. The strong will finally overcome and the transformation to Libertopia will finally emerge.

  40. 40
    Randy Lee

    RBee, don’t you know I don’t want less government; I don’t want any men and women with guns initiating force against either me or my fellowmen. Too bad you suppose the initiation of force to be moral.

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