Why are churches exempt from paying income and property taxes? This is an affront to the principle of separating church from state.

According to US and Canadian law (probably law throughout the English-speaking world, at least), any religious organisation which does not promote illicit activities can apply for exemption from income tax and property tax. Otherwise, they are considered a corporation and must pay these taxes just like any other corporation.

Why is this done?

A religion is a religion. That's a private matter. But a church is an incorporated company that provides a service. Whether that service is defined in terms of enlightenment, salvation, celebration, or whatever, a service is a service. In exchange for providing these services, churches accept tithes, donations, gifts, and fees. This is income. They use this income to buy and administer churches. This is property. These are the two basic resources that can be taxed. And yet, in the case of "churches," they aren't. Why?

Is the service that a church provides special in any way? What is that service but peace of mind? But psychiatrists also ostensibly offer peace of mind to their clients, but they still pay their taxes. What's the difference?

I challenge all religious organisations to go through the gauntlet and cancel their tax-exempt status. The people will vote for their salvation with dollars.

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VT_hawkeye: Can the government select which corporations it wishes to tax on a company-to-company basis? If there were no such thing as tax-exempt status, all religions would pay tax. That's my point.

Charging a different income tax rate for religious organisations as opposed to other businesses would still be acknowledging a difference between the two. I'm saying that this has to go. It in no way impairs the free practice of religion, because as I said already, a religion is a personal matter; a church is a body organised to promote that religion and provide services based on the beliefs set forth in that religion. Treating different religions differently would be a discriminatory matter; taxing all churches as businesses, however, is not only not descriminatory, it is the final and logical conclusion to the separation of church and state upon which the free English-speaking nations are supposedly based.

In any event, I'm exhorting the churches themselves to take the initiative and prove that they don't need special treatment to survive as legal entities. I'm emphatically not stating that people shouldn't have freedom of religion, a basic freedom that I not only believe in firmly, but actually exercise every day by virtue of belonging to a minority religion. What I'm saying is that religious organisations should be treated like the businesses they are.

Furthermore, the McCulloch vs. Maryland case deals with the state's attempt to tax federal banks and thereby the citizens of other states. I fail to see how that might be relevant to religious institutions, all of which are privately endorsed.

"Religious organisation" does not mean "religion." As tomwhore points out, you can't destroy a religion with taxation — you can only destroy an organisation, but no private organisation is constitutionally protected. The First Amendment to the US Constitution — as well as the French Declaration of the Rights of Man, and Canada's own constitutional list of human rights — protects freedom of religion. That means the freedom of personal conscience, not institutional support. If you go and say that the organisation of your church is essential to its operation, it does not logically follow that the organisation should be afforded special status simply because your personal choice is respected — any more than we'd let you murder somebody just because your religion said it was okay.

blaaf: Churches, much like political party fronts, are not subjected to sufficient scrutiny regarding exactly what happens to their profits. I say, "Churches should be taxed because they are profiting." You point to your slew of "special-interest tax-exempt non-profits."

Go ahead. Tax them too.

And as for your statement that "in general, churches (as well as synagogues, mosques, and monasteries) are very positive influences on their communities, whatever your belief" — well, that's just not true. It does depend on your beliefs. Even in Ottawa, the most cosmopolitan and international city in all of Canada, I get flak for being a member of a "stupid" religion. If what you are makes people "uncomfortable," even if you flat-out tell them you just want to live and let live, their agenda will nevertheless switch from "building community" to "building our kind of community." Churches are an organised base of operations for this — not just Christianity, but Scientology and even Hasidic synagogues.

"The power to tax involves the power to destroy."
-- U.S. Supreme Court Chief Justice John Marshall, in McCulloch vs. Maryland (1819)

I don't know the formal reasoning behind it in Canada, but this legal opinion states why religious organizations of any sort are tax-exempt in the U.S.

Were government to be given the power of taxation over religious organizations, it could run roughshod over them with discriminatory tax laws. It could even pick and choose which religions it wanted to tax -- not a good thing for minority sects. Either of these would inhibit the free exercise of religion, as guaranteed in the First Amendment of the U.S. Constitution.

Religious organizations are not businesses as defined by American law (nor, I believe, under English common law). Treating them as businesses doesn't work. CtF, you and I are just going to have to agree to disagree on that point.

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CtF: sure, the government can select which corporations it wants to tax. It does it all the time, based on business type and size. But that's not really the point. Any power of taxation over religious organizations, even non-discriminatory by type or size, would involve the power to destroy them all (100% income tax, say?). That's why they aren't taxed.

True, McCulloch vs. Maryland itself didn't deal with religious organizations -- Maryland wanted to tax The Bank of the United States, and thus destroy it by that taxation. That principle, of destruction by taxation, has to be avoided with religious organizations, because they are specifically protected from governmental interference in the First Amendment.

A religion can not be destroyed by taxation though more than a few have been created because of the special tax status.

A religion is a more often than not set of faith driven behaviors focused on either a god or gods (gender tbd) or way of living.

A church is the organization that guides the followers of a religion in keeping to their focus or faith.Churches are in the business of faith/focus.

Now how special tax status has anything to do with a persons faith is questionable at best and corruptible at worst. How it impacts the business of faith I can clearly see. It turns personal systems of faith and focus into businessof profit which, IMNSFHO, diminishes the foundations of faith.

There are already special tax laws for Not For Profit entities which should be more than enough to cover churches if indeed they are not in the business of money making and are truly just in it for the guidance of the faithful .

Some churches are far from non-profit. How else could they expand so rapidly, with churches all over the country? Also, either all churches are taxed the same amount, or they're not taxed at all. That's the only way to make sure the government isn't favoring a certain religion or church.

Not taxing the churches works better. Why? Because by making the churches apply to be tax exempt, you don't have to deal with the subjective problem of the government deciding what should/shouldn't be taxed, because there are hundreds of variations of churches.

Religious organizations shouldn't be tax exempt because they are religious; they're not needed for someone to practice their belief. However, if they are non profit, they should be entitled to all of the benefits that any other non profit organization does.

I'd like to reiterate what Infinite Burn said. The key point is that churches are non-profit. Heard of 401(c)? All registered charities in the United States are tax-exempt. Even the Free Software Foundation is tax-exempt--opinions differ as to whether GNU is a religion or not, but you get the idea. If you exempt the FSF, can you honestly say it is okay to tax, say, the Presbyterian Church? Incidentally, it is not true that all "religious" organizations are tax-exempt. They must be non-profit. Many "Christian" businesses and para-church groups are treated no differently from other businesses. Zondervan, even when it was independent, was rightfully taxed. Yet Zondervan is closely allied to Christianity. I believe it only employs Christians, at least at most levels. It is one of the primary disseminators of Bibles and Christian literature in America. But it is for profit, shows it, and is taxed.

Nanosecond states:

Some churches are far from non-profit.

Absolutely true.

How else could they expand so rapidly, with churches all over the country?

Absolute, utter BS. For one thing, churches have rather withered in comparison to how they were before, at least proportionally. America is less of a church-going, Christian nation now than historically. Secondly, this is an absolutely stupid, offensive assumption. I suppose you would say that Falun Gong is spreading so quickly because it is profitable. (I suppose that's why they're immolating themselves on Tiananmen Square too!) Even the worst, most cultish, most corrupt churches can hardly be said to spread due to profit. Scientology is probably the worst example, the one "religion" closest to a money-driven scam. Yet the driving force behind Scientology is ideology, not money, at least at the grass-roots level.

Regardless, churches are not "for profit" businesses either legally or generally in practice. Some people profit from churches, and some churches do function remarkably like corporations. But the minute you say we should tax churches because they are profiting, I can point to a whole passel of other special-interest tax-exempt non-profits closely allied to no religion but rather to some business, industry, or political faction.

Finally, in general, churches (as well as synagogues, mosques, and monasteries) are positive influences on their communities, whatever your belief. There are the exceptions, your Westboro Baptists, your rabid political evangelicals, and your Jihad-crazed Hamas, but the top agenda for most churches is to build community, reach out to the poor and suffering, and so forth.