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47 comments:
I earn exactly $28,000 a year INCLUDING my housing allowance. If they taxed my housing I'd have to get another job to pay my taxes!
I wish they'd simply cap this benefit--there is no reason for any minister to be putting more on their house than my total salary.
(Welcome back Drury--I'm glad your vow of silence was only one week this time!)
-Chad
I'm about to benefit from a mid-level income plus a generous housing allowance (in Canada, though). I understand the allowances made by the governments, but I think we all need to be honest about MANY non-profits getting breaks from the government.
As for pay by the government, I think we should be careful. Those paid by the government eventually will hear the government knocking with demands. How long will it be before our government attempts to dictate the Lord's message? To me, however, this will happen whether or not the government gives financial breaks. It's predicted in the Bible, after all.
I believe that ministers, like everyone else making $15,000 to $500,000/yr, should pay taxes. It used to be that ministers provided a public service. That is no longer the case. They serve their own congregations and religious businesses.
By the way, how come a college professor gets the breaks????? You are not preaching clergy if you are a college professor????
The only reason the government need regulate religious organizations is to protect the general public. Now that the church is seemingly dangerous, that may need to be a future consideration. However, were the church to again become the church, that would eliminate any regulatory oversight necessity.
I guess that the message christianity preaches consistently about choice is very applicable here. It will be the church's choice what happens in the future!
I pay taxes on $7,800 each year, the "fair rental value" of the parsonage I live in. I don't pay taxes on utilities. I don't feel bad about that at all, I have had untaxed benefits at every place I have ever worked (usually insurance coverage).
The New York Times leans pretty far to the left, so it is no surprise the gray lady is concerned over the many financial advantages of being a pastor. (I laugh all the way to the bank, comfortable in my new Lexus LS 460). I would agree with Chad, there ought to be some way to eliminate abusers.
One thing that is seldom if ever mentioned in any discussion about taxes; everyone pays too much. No one ever suggests that the government could get by on less money. What is a fair rate? How should we be taxed? I personally favor consumption based taxes, after all, it works for my denomination!!!
Remember, when personal income taxes were brought before Congress about a hundred years ago, it was "shot down" as being unconstitutional. Shortly thereafter (@WWI, I think) they were introduced at a very low rate. I am not against paying taxes, we must render unto Caesar, but Caesar wastes a lot of money. As one wag said, I don't mind extravagance, but I hate waste.
I never heard about these breaks. I've been a youth apstor for two years and pay taxes on all the salary I get--is it really legal to not pay taxes on my rent?
To anonymous:
College professors can only take the housing break if they are training ministers, not if they are teaching other subjects. Also District Superintendents, evangelists, and denominational officers get these breaks too so the IRS's three primary rules for "who is a minister" is intrepreted broader than "pastor."
One other item, if we are in a denominational pension plan the pension can also be designated as housing providing tax-free retirement housing too.
I am thankful for the break--we could barely have survived without them.
The issue with the pension is tricky so anyone planning to use that should talk to a competent tax advisor. The Wesleyan pension itself is likely fine since the Pension likely issues a statement that pensioners can take their pension as housing allowance. In some instances, with the right fund manager, a retired pastor may also be able to receive IRA or 403(b) distributions as housing allowance. Timothy Plan advertises this benefit however their returns have not always been the best either. One option may be to grow the money elsewhere and roll it over to Timothy Plan (if you qualify)right before you are ready to start taking distributions.
I am a minister and supremely grateful for the housing allowance.
But one thing that is not brought up much is that (for solo pastors, at least) we pay ALL of our payroll taxes (15.3%) on ALL the salary, including the housing allowance.
When you are employed in a "regular" job, your employer pays half of this, you pay the other half. But ministers are considered to be self-employed for income tax purposes, so we have to pay it all.
It's true we don't have to pay INCOME tax on the housing allowance, but we do pay the social security/medicare taxes it.
Does it speak to the state of tithing in the church when the IRS has to make salaries livable?
In New York State, the tax assessor’s office requires an annual application to exempt the parsonage from property taxes. The application form requires pastors to validate their credentials by listing the ordination date, the ordaining denomination, degrees completed, etc.
Good point Brian!
To Brian,
What you can do as a minster with regard to your SS tax is have the church "pay" you the additional 15.3%. This is the method suggested by Bobby Temple, former CEO of the Wesleyan Pension Fund. You still have to pay income taxes on that additional income by claiming it as salary, but it is far less than trying to come up with the $$ out of pocket, especially if you are paying SS on fair rental value of a parsonage but getting no real income for it.
I enjoy not paying income tax and only paying SS by virtue of being a minister. I am willing to, as someone else has posted here, to pay my fair share if we can get everyone to pay their fair share. In those regards, I like the flat tax idea.
This isn't a tax issue, but deals more with pastor salary packages. The thing I hate when working those out with churches is they say, "We've got $XXXXX for your package. You split it anyway you want." No other business in the world does that do they? I found myself having to choose between health insurance and my pension plan because of this mindset. In another church I had to fight to keep my salary because the district raised the insurance rates AFTER the church year began. The board had the audacity to suggest cutting back on my salary to make up the difference. I quickly reminded them that in their jobs if their health plan costs went up their employer did not cut their salary. They didn't like it either. There's somehing about keeping the pastor poor that is supposed to be ok. Why can't churches say "We're going to pay you this much and then provide this benefit package?"
Keith said:
* If we lose the minister’s housing benefit how will the government tax priests who have taken a vow of poverty and have no income—how will they pay taxes on a church-owned manse with church-owned furniture?
Mrs. Clinton says (paraphrased):
Skip the priest and tax the churches! They're sitting on piles of cash.
Mrs. Clinton expresses a widely held view by many politicians commonly labeled as "liberals." The view is that they have better ideas and churches should contribute their fair share. Besides, Hillary recognizes that most organized churches like to keep their pastors poor--its those pesky independent churches like Saddleback that cause trouble. Hillary knows that the churches themselves hold the keys to the kingdom--forget robbing the payroll shipment--she wants the bank.
Perhaps after the Hillary rant above it is important to clarify that all of the republican and libertarian tax reform ideas (such as the "flat tax") all have included fine print that eliminated the tax breaks for ministers and the non-profit exemptions from sales tax.
So, the Republicans say: "Let's take all their money too!"
(This is a parahprase of what Republicans say. I took the liberty to do so since you did.)
As a prison chaplain, I am both paid by the state and take the tax break. Guess that is the best of both worlds! I find it interesting that no one has yet addressed the issue of tithing on the housing allowance. This is something that God convicted me of during our pastoral years and we began tithing on the value of the parsonage and utilities. When we transitioned from pastoring to chaplaincy, we now tithe on the gross of our entire salary. By having tithed on the housing benefit as a pastor, it was less "painful" to tithe on the entire salary amount!
One more thing, I don't see the problem with churches who run competitive service providing enterprises to pay taxes just like the other private competitors. We need to be careful not to abuse the tax privileges.
Tim Hawk
I love the tax breaks too, but I am considerably worried about the implications. Especially troubling is the notion of the government determining what counts as "sacraments" and "worship." It turns out we may still be the chaplains to society, despite our declining rolls.
As for the politics, if this matter gains wings it will be way bigger than vouchers or faith-based-initiatives. Despite Harold's observation (which is certainly true from the more academic wing of the Right), Republicans are in-bed with Evangelical voting block and are not stupid enough to go after ministerial tax breaks head-on (though they may chip away at them). They certainly will not go along with a cap, which would contradict the logic of their capital gains views. On the other hand, provided a cap went through, the Democrats love goverenment subsidies, and have no direct hang up with religious organizations. The Left wing of the Party would oppose tax breaks on issue of religious establishment (ACLU style). But the dominant aristocratic DCC will not oppose tax breaks for needy religious workers (esp. inner city Catholics) but rather expand the breaks to include inner city teachers and social workers. But all these predictions presume that parties are predictable based on pandering to their voting blocks. Who knows, maybe its all up in the air when the passions flair up as they so often do when religion is on the table.
If you are a minister, whatever your view, you should contact your congress-person and senators in order to perceive their views on the matter. This is a legislative, not an execute matter. It concerns minutia that requires action and voting more than just every four years in the general election.
jld
I could not help but notice the question about giving other religions the same tax benefits. I have to say yes with certain criteria, and those criteria should be the meeting of needs. The service of others. If we see that Christ asked us to serve others, we should be with at least a hint of joy that the mission is being met, although it is not by the ones who follow Christ. As far as the government is concerned, we should let the leaders do what they will. If they see that we are benefiting them through service, they will want to reward us or thank us, which says great things about our relationships with a country which desperately needs our Christian influence, not to mention that we are also benefiting a world which needs the same. If they want to show us gratitude, then praise God, but if not, then we must continue on the mission God gave us.
Russell Purvis wants other religions (including Devil worshipers) to be able to get similar benefits IF THEY MEET NEEDS... good idea!
I wonder if his attitude is at the core of the whole questioning of these benefits by the NY Times-- to what extent are secular people looking at the church and seeing it not really meet needs of others but basically using the money to provide a tax-free comfortable place to worship, a tax-free Gym to play in, a tax-free baby sitter, a subsidized Christian school, a tax-free youth leader (who gets housing tax free) to work directly with their kids--all things the secular person pays for.
When they look at the church they see little serious service TO society, thus Russel is right-- that may become the criteria for both the Devil-worshippers the Moslems and the Christian church and ministers--they get tax breaks only to the extent that they show they really do serve society and not just their present customers?. This inspection could be good for us all!
I have a real problem with this....there are those in the lower salary ranges working from home paying their own social security taxes and all other taxes as well! Many of them are in the same salary ranges as ministers and many much lower and also without health insurance. None of which are subsidized by public or religious housing.
Let’s do a work comparison: the average worker, on a daily basis, works 8.5-9.5 hrs (no overtime factored in) with a 1.5-2/hr commute each way for and up to 13.5/hr day.
Average pastors have about the following schedules: 5 minute - 1/2 hour commute each way; office hours of 4 at the most, some are required to put in 8 hours at their desks for a grand total of daily hours expended: 9 hours max. In addition, clergy are generally allowed to leave their offices to run to the bank, get a hair cut, go to the cleaners, get their car serviced, study at their desk if taking classes to improve skills, etc.
In addition, both sets of workers, pastors and lay folks are expect to: be prepared to teach/give lesson/preach on Sunday, attend the same number of classes and services weekly (Sun & Wed), and spend time in prayer.
So, tell me from a purely numerical standpoint, who works harder? Who provides more services?
And furthermore, most clergy do not even know the text which they were hired to expound or for that matter are capable of moving the God of heaven when needed to heal, resolve a conflict, apply the balm to a church or national wound or the like.
Keep in mind, ministers use to "serve" in hospitals, now they are paid clergy. Ministers use to be invited to speak and pray at many public and social gatherings. They no longer provide this service. The extras are no longer expected or provided. Nor is the clergy any longer capable.
Considering there is no respector of persons with God, why should there be a respector of persons with the Government???
I think that now that the office of the pastor has become a playground, benefits need no longer appropriate. Now, if clergy return to their God-given tasks, possibly. But I, like many others, hold out no hope for that!
I have to laugh at the most churches are sitting on wads of cash....look at most church budgets. There are no wads of cash. In fact, it is the smaller church who keep the missionaries on the field, it is the smaller churches running the soup kitchens and the like. There may be some larger church sitting on wads of cash but the average church is not! Maybe that is why the average churches are shutting down!
DEar Anonymous,
I was part of the working poor (my fault, I dropped out of college) for about 12 years, now I am a highly paid professional religious person. I can tell you from personal experience that poor people do get benefits that are not available to all: food stamps at certain levels of income, help on your utility costs, "earned income credit" when filing tax returns which may mean you pay no Federal taxes. I worked hard, sometimes 65+ hours a week, and never made more than mid-teens (one year I worked 500 hours overtime and made $16K.) I do have flexibility in my present job, but I would say that I have never worked harder in my life, it is just a different kind of work.
Some pastors do abuse the position, but that is true in every profession where you have employees with time they don't have to account for. No excuse, of course, we are supposed to be doing Kingdom business and should hold ourselves to a high level of accountability.
But your illustration doesn't really hold water.
One more thing. I took a job in the early '90s making $11,700 a year, and I had to pay $127 a month as my contribution for health insurance. That is becoming commonplace, of course. Yes, of course I am better off now, (many pastors are not) but poor people do get subsidy of different kinds from the government, in fact, the less you make the better in some cases. I failed to mention that the government provides housing at a reduced cost for extremely low income people. I was fortunate not to ever need it, but I had many friends and co-workers who did.
YES, LET’S START TAXING THE PARSONAGE. When the IRS begins taxing the parsonage, then pastors will refuse to live in one. What pastor would pay both income tax and property tax on a parsonage that they do not own? Taxing the parsonage will provide great incentive for a pastor to buy his own home. This may be the only way to motivate a church board to sell the parsonage and give the pastor a housing allowance instead.
When the church owns the parsonage, the pastor is deprived of building any personal equity. By default, EVANGELICAL PASTORS TAKE A “VOW OF POVERTY” by working until age 65 or 70 without building equity in a house. In today’s housing market, a retiring pastor can’t afford to move out of the parsonage. He must now work a secular job to qualify for a 30 year mortgage on a used mobile home. The good news is that IF HE DIES BEFORE AGE 100; he doesn’t need to pay off the mortgage!
SHOULD PASTORS’ KIDS PAY TUITION? If a pastor doesn’t pay property or school taxes, should his kids pay tuition to attend public school? Some politicians see this as loss of revenue for the school. The New York State legislature has proposed a bill requiring such pastors to pay tuition for their kids. By the way, it would be cheaper to pay $5,000 in property taxes, than to pay $12,000 - $15,000 in tuition for each child.
My oh my, lots of action this week--and it is only Tuesday! A few quick comments back to the first posters:
ANON-$28,000—I might accept a cap so long as it accounts for California & Nebraska both.
ERSKINE—Good point hospitals also get these breaks, and the Girl Scouts…and even “non profit” companies who keep all their “non” profits and pay themselves tidy salaries with it—good point. (someone below answered the minister-college professor question)
ANON2—“when the church becomes the church” –oh oh, Purist alert! ;-)
JUSTKARA—sounds like you would accept a cap
JOHN MARK: You should pay SOCIAL SECURITY taxes on the fair rental value of the parsonage but if you are paying INCOME taxes on it you are giving a gift to the government—(George Bush thanks you for this) Your parsonage is exempt if you wish to take the break. (as for less taxes, all of would vote for less taxes)
TREVOR: You've got some homework to do… click search on my column page and type in “minister’s taxes” and read my advice there and the Q&A that comes up save yourself a few thousand a year or more.
BROOKSVILLE: You are right—I added the tiny line “plus some other factors” to the three rules to cover these other categories like training ministers while appointed by the church… And I think you are right about pensions too if they are "denominationally sponsored" I believe.
ANON#3 I think you are right—only denominational pension plans work for housing … and I have also heard of people rolling over other funds into a denominational plan BEFORE retirement to get this break in retirement.
BRIAN LA CROIX Yes you are right—ministers pay SOCIAL SECURITY taxes on all of the salary—even the “fair market value” or the use of a “free” parsonage.. And you are right that we (as self-employed) pay the whole thing (though almost all fair-minded churches “reimburse” the pastor for half of it—though that reimbursement is considered “cash income” and has to be added to the W2 form.
KURT BEARD. Good pont—this break for ministers came when ministers were almost-poverty level. Plenty still are, but plenty now earn more than $50,000 a year, and the double income family has also arrived so there are lots of $100,000+ a year ministers (family income) getting the free housing break too.
ANON-NEXT I didn’t know that about NY. Property taxes are a whole other matter. Since my own church doesn’t pay property taxes we always send a generous “gift” to the fire department any time they come. But we don’t send a gift to the schools or library—well, yes we do: we send them scores of free “world hope tutors” now that I think of it.
CAMEL HAIR You are exactly right in what Bobby Temple advised: so do I, though often the church is only willing to pay half—since that is all lay people get paid by their employer. I agree 10% in your ire against the notion of you have $xxxxx how do you want to split it? It is unwise and short sighted (unless one is SURE Jesus is coming back in 10 years)
CLINTON-LOVER ;-) I would fight that—BUT I also don’t think churches should be piling up and hoarding cash if they have no plans to build etc..churches should be souil-saving stations not banks… I wish denominations would take from these “old people’s banks" who are hiding their $250,000 talents in the ground” and give it to the $10,000 talent church plants!
HAROLD I have heard that too—a true “flat tax” takes ALL deductions away including any deduction for charitable giving…
TIM HAWK: heh heh heh you’re getting a little close in your preaching ;-)
JOHN DRURY: I have those same doubts about the government deciding what a sacrament is… is killing a goat a sacrament? Drawing a pentagram on rock? Foot washing? Do Quakers who practice no sacraments not meet this criteria? Your analysis of the political landscape is clever.
RUSSELL PURVIS: Good admonishment to us to serve more I suppose… the coming generation will make this change in church even if they fail to change anything else… Like Billy Graham was the "evangelical pope of evangelism" of the boomers generation Bono is the "missional pope for service" to the coming one.
JEREMIAH: Ouch…we’re preaching to ourselves here aren’t we?
ANONYMOUS LAYPERSON: YIKES! But I admit I too have seen these “playground pastors” and “lazy missionaries” myself. Maybe you have one in your own church even (I had one once). BUT I have seen plenty –maybe most pastors —to whom a 60 hour week would be a break. When I'd loike to do is get the playground pastors into the playground churches and the hard workers into churches where the laity plan to give more than one hour a week. Then in 30 years these playground churches and playground pastors will all disappear. ;-)
ANON-WADS-OF-CASH. I agree that most churches aren’t sitting on a bundle…BUT there are some. STORY: A buddy of mine in seminary worked at a downtown Philadelphis church with an average attendance of 8 people that had four paid staff people, two full time and two seminary students and the church was completely endowed so that it could operate for eternity with no people at all. He showed up on Sunday mornings and did his homework all afternoon and brought back $250 a week in 1970--what would that be today? On churches like these I might even be willing to do something to turn "God’s money-in-the-bank” loose to your church! (even if Hillary took a 10% cut on the way! ;-)
JOHN MARK Kudos! Thanks for that story. You are right—EVERYONE in the USA gets tax breaks—the poor, the middle class, married, singles, and(especially) the rich and farmers… and you are right about hard-working pastors in most cases. I know a few lazy ones and if I were king of the church I’d make sure they got paid fairly for what they did… and likewise the hard working ones… On pastor's pay I wish a pastor would be paid the average of the full time working people in the church… neither more nor less…same for missionaries, but I’m just spouting ivory tower ideas here, it will never happen probably ;)
ANON-Buying a house instead of a parsonage. Here, here! Amen. There is no doubt in my mind that a parsonage is the most economical plan for the church, but it is invariably at the expense of the pastor. (This is what DSs are for, by the way…dial her up!)
If a church enters the marketplace, let them pay taxes.
Get rid of all the exceptions for all pastors, imams, priests, etc. The money they get already got a break on the way in (tax-deduction, no sales tax for non-profits, etc) - no double dippin'.
The tax code is simply too complicated - get out the Bowie knife and spare no one! (my libertarian bone is squeakin') There may be some weeping and gnashing of teeth, but we can cut millions of expenditures on IRS and H&R Block.
Excuse me, but the benefits the poor get are offered to all Americans, not just the religious!
This illustration hold more water then clergy want to admit!
Keith, two questions:
How much extra would it cost the average church (100-150) to renounce their tax benefits and cut their strings from the government? How much more would the annual church budget need to be increased to cover these costs and would it be a viable choice for such churches?
Second, is there not some benefit to severing ourselves from the government strings? I really don't care at all for churches who treat their services like political pep rallies, but I don't think they should be hounded by the IRS because of it. There's also times where it is very appropriate to speak out on political issues or even to support or oppose a candiate. Certainly the Old Testament prophets of old would not have endorsed the idea of staying silent about the activities of the various corrupt kings. I don't like the idea at all of a church being bothered because they preached an anti-war sermon. So called "conservatives" who are cheering this on are hypocritical and would be justifiably enraged if they got hassled for preaching pro-life messages.
Of course none of this would be an issue if we weren't wedded to the tax exempt corporation status. But is it plausible for a church to go that route even if they wanted to? I'm interested to hear some numbers and analysis on that from others.
One point of clarification on the housing matter. The recipient does not determine the amount of salary that is the considered housing allowance. The Governance Board or Board of Trustees is responsible for setting/limiting this amount. In theory, pastors, college presidents, farm managers, property managers, and armed services personnel were provided with tax free housing since their positions required on-site presence. In similar cases when housing was not available, an allowance(tax-free)was added to the salary. The board has the ultimate responsibility to declare how the total compensation is broken into salary and housing allowance.
Well, let's see. Good idea to ensure you can do what you like, under law, from your pulpits.
But this goes back to my deleted comments re: the functioning of guilt and conscience to achieve the effects of Christ's law in man or the church. (Obviously, it did not warrant consideration the way it was stated. So, let us try again.)
Under Christ and the supposed grace of the NT, man is not only held accountable to the law but also the weightier matters of the law!
That said, let us take a look at your example.....anti-war sermons. I can't recall Christ ever preaching anti-war anything. He preached precepts. He talked about the heart, he talked about so much more than could ever be, or is ever, said in an anti-war sermon.
My point, if the church were the church, if pastors/servants were pastors/servants and not politicians, if they spent their time seeking God, doubtful there would be a need for any anti-war sermons. We would all be in one accord!
Since all leaders and churches have decided to drive toyotas instead of hondas and desire the ways of the world, possibly, that is the way to go.
Forgetting anti-war sermons, nothing is free in life and God wants his people and his organized church to not be beholdened to anyone. So, maybe that is the way to go in the future. The current system cannot be refuted or justified by Scripture!
Wow Adam, we usually don't agree much, but I like your point (must be the libertarian in me). Here are my solutions:
1. I think that we need to get away from the whole Self-Employment aspect of the church (no more 15.3% SE Tax). Churches should operate like any other non-profit by paying all their employees with the direct share of the Social Security taxes. Any fees for services can be paid to the church and then to the pastor or the pastor can create their own business like anyone else. This will also solve the quarterly IRS payment problem.
2. Move to a flat tax (read Forbes book its interesting). Most pastors even under the flat tax system won't pay much federal taxes anyway since there is still a standard deduction.
3. Or push to move back to an actual parsonage system (for any legitimate religious group; which solves the priest question). Here is a current federal tax law for anyone that meets these three requirements:
You do not include in your income the value of... lodging provided to you and your family by your employer at no charge if the following conditions are met:
a. Furnished on the business premises of your employer,
b. Furnished for the convenience of your employer, and
c. A condition of your employment. (You must accept it in order to be able to properly perform your duties.)
(IRS Publication 525) (universities, firefighters, funeral homes and others already use it)
How can preachers really be self-employed when they have district and general superintendents they are suppose to answer to and receive evaluation from?
What would a major financial crisis do to the American church? What if our country went into a depression? What if we lost any tax benefits at all?
I have a feeling that it might be just what we need. I am hopeful that it would spur greater giving. I hope that money would be more outward-focused (less "tithing to ourselves"). Let's hope...
Ask the catholic church what a financial crisis did to them during the sex abuse revelations. They almost lost quite a bit and folks quit giving! They judged with their pockets in the same manner that leadership is judging others by withholding jobs, shunning, and the like.
I think the sexual abuse issue is too complex of a variable to play with. I'm talking a strictly financial crisis (depression, tax law change), not a moral crisis that causes members to leave (with their disappearing financial contribution being secondary).
The issue is not the sex abuse crisis....the issue is the impact of changing funds available. I'm merely pointing out what some of those impacts are.
For those priests, I'm sure it was a depression.
I'm merely making the point, when looking at policy changes, all factors and impacts need to be considered. If you lose the benefit now, what impact will it have on this sector of society in the future???
That is my only point.
ANON.. PASTORS’ KIDS PAY TUITION? Interesting point (I wasn’t ignoring you.. you and I posted about the same time)
THADA-Marketplace=Taxes: Could taxes be the result of our grand business success? What “secular” publisher wouldn’t dream of having Purpose Driven Life?
ANON-poor not religious only. True.
BILLBARNWELL – The answer to your question might be the answer to THIS question: How much money would people stop giving without the tax deduction? I do not think it is as much as we might think. Here’s why: The percentage rate for the rich has fallen enough so that the value of a gift still costs even a millionaire about 65% . The middle class it costs maybe 80% or so and the poor get no value—which is why so much cash is given in poorer church—they don’t need the write off. It is a good question. And (while I hate to hear people like Hagee do his rightest bloodthirsty tirade from the pulpit) I too believe preachers are obligated to address moral issues from the pulpit—which means when moral issues are political issues then we must speak.
(Some Canadians will have to speak to the issue of what preachers do when they can not preach “against” homosexual behavior.
JIM KRAAI: You are absolutely correct—the board must do it, and it must be done in advance of any expenses. But, you probably know in practice it is common for the board to ask the minister “How much of your salary do you want us to designate next year as housing?”
ANON- anti-war sermons? how about anti-abortion sermons? Would you ban anti-homosexual practice sermons? Would you want all preaching to never deal with any issue that is considered “Political?”
RYAN SCHMITZ is there a new “ Christian consensus” emerging that has strains of libertarian (low taxes, live-and-let-live approach to legislating morality, pro guns, low regulation, hands-off-policing the world) mixed with “Creation care” and real and permanent help for the poor, from the Democrats, and pay-as you go finances from the *historic) Republicans? If you think so see the new so-called “Democrat” Brian Schweitzer, governor of Montana—who used to be (still is in his heart I think) a Libertarian
RYAN AGAIN a whole church in Indianapolis is trying that idea of totally self-employed completely… we’ll see what the IRS does (The last time they tries to stiff the IRS they lost their church building)
RYAN YET AGAIN: I can do live with flat taxes. And parsonages work IF pastors will get paid enough and IF they will save sensibly.
ANON_ Good question—we don’t SEEM self-employed do we?
THADA AGAIN See above—I really don’t think it would kill us. But BIG gifts of multi-million dollar levels could suffer. THEN AGAIN what is Bill Gates and Warren Buffett going to do with BILLIONS anyway—buy more steaks? More suits? Cars? They are stuck giving it away anyway… it is all dust in the end… so maybe even the bezillionaires will still give ?
I'm pretty libertarian in my politics, so I don't mind if you take away my tax breaks. It's not an issue I've ever spoken up about, but if I had to take a position, I'd say churches ought to be treated like any other non-profit organization, and that goes for how their pastors/employees/directors are paid, too.
So don't bother trying to decide what a fair cap would be (too much variation in housing costs). Just treat us all the same. The church doesn't need to be propped up by the state to survive. In fact, those props might be hobbling us...
Keep in mind that if you are no longer a religious/charity status group, you are then a business, I think, and the laws governing your hiring, firing, work, health insurance and the like will be governed differently as well!
The catholic church is facing this issue now with health insurance purchased for workers @ catholic charities. The courts have deemed that catholic charities a business which hires non-catholics and therefore they are required to provide birth control coverage in their health insurance policies even though the church as a whole does not believe in using it.
If such benefits are removed, there needs to be some status category which still allows religious organizations to remain religious and protects their rights to their beliefs.
All laws related to this issue need to be examined closely by well-qualified folks.
Ok let's wrap this one up... Thanks for the interesting comments. A few comments got interpersonal and I deleted them. Not because they were not interesting, but because they were between two people--and on this site we ask that you "to take it outside" if you want to fuss or argue too much between two people.
I believe that when we accept government favors we open the door for further manipulation. Much of the writing in this column addresses this issue.
I think the church and preachers should pay every tax due and remain unhindered in proclaiming the Truth. In the process of weaning ourselves from the government, I believe we'll find a few of the great Wesleyan preachers we are looking for.
The best leaders have graduated from the School of Muddy Boots. Lead from the front.
Fluffy
You asked lots of questions. I'll answer them individually:
QUESTION: Is this tax break a remnant of “old Christendom” where most everyone (including people who don’t attend church) considered themselves “Christian” and supporting ministers through the tax code just made sense?
ANSWER: Probably partly. The old stereotype is that clergy members aren't well paid. Many aren't well paid (my TOTAL copmensation package--INCLUDING housing for a home that is NOT a church-owned parsonage, medical premiums paid for a more or less catostrophic insurance policy with a $5000 per person deductible, and contributions into a retirement account--is less than $30,000 per year), but of course the media will focus on the "big names" of ministry and therefore the whole issue will be skewed.
Question: When a church operates a business competing with private enterprise should the church pay taxes on their business?
ANSWER: No
QUESTION: Should there be a “cap” on housing allowance eliminating a minister from using their allowance to purchase multi-million dollar homes tax free (then sell the house a five years later tax-free from capital gains)?
ANSWER: I believe that the cap should be determined not so much on the value of the home, but rather on a certain dollar-amount. I don't know exact figures, but say for instance an average mortgage throughout the country is $900 per month, average utility spending is $200 per month, and average upkeep and maintenence is $100 per month. That comes to $14,400 per year and (although in this scenario, admittedly these numbers are probably not realistic) therefore the allowable housing allowance ought not be able to exceed $14,400 per year (or whatever the actual "average" amount is determined to be). The government COULD make it easy and simply allow an automatic $14,400 deduction for all ministers, but then again, this IS the government we are speaking of, and the government almost never does anything the easy way.
QUESTIION: Should our housing benefit be extended to other people who serve society at low pay—inner city workers, aid workers, para-church workers and non-ministerial missionaries? To all people?
ANSWER: No.
QUESTION: If we lose the minister’s housing benefit how will the government tax priests who have taken a vow of poverty and have no income—how will they pay taxes on a church-owned manse with church-owned furniture?
ANSWER: The government would tax priests to the greatest extent it can. But basically, since I am a pastor who doesn't live in a church-owned parsonage, I am vieing thins from my personal perspective. Basically I believe that if the church owns the property, nobody should be taxed because they live on church proprty, and staying on that property should not be considered as income in any way. In the secular world, this would be somewhat like taxing someone who spent all night at the office working on a project based on how much a hotel would have cost for the night.
QUESTION: To be a “minister” and get these benefits the IRS says a clergy person must 1) Administer sacraments; 2) Conduct worship and 3) Direct the spiritual life of the congregation (plus some other factors) is it OK with us for the IRS to decide what a legitimate “sacrament” is?
ANSWER: No, it is not OK for the government to decide what a sacrament is, and therefore this doesn't seem to be a good way to distinguish between legitimate and illegitimate uses of the clergy title. However, there has to be SOMETHING used to make this judgment, and if was up to me, number one would simply be eliminated from those three requirements. I might add something else, but right now I don't have anything specific in mind.
QUESTION: Switching from taxes to tithe, since we expect lay people to pay their tithe on money they spend for housing should ministers pay tithe on the value of their parsonage/housing allowance?
ANSWER: Yes.
QUESTION: Should Moslem religious leaders get this benefit too? Should it be given to the priests of Wicca, the various Devil-worshipping religions the cults? Or should the government decide which religions are valid ones and which aren’t?
ANSWER: Unfortunately, the government is already deciding what are and what are not legitimate religions in many issues. I would think that anything that legitimately falls under the current 501(c)(3) status would have to be included from a government standpoint. However, from a Christian standpoint, I would not like to see the benefit extended to non-Christian religions. But then that opens another whole can of worms. Would the government consider 7th Day Adventists, Christian Scientists, Mormons, or Jehovah Witnesses to be Christians? How about Nazarenes and Wesleyans, since we don't hold to some of the same beliefs as do Baptists, or Catholics? The entire issue is bigger than just the minister's tax discount.
QUESTION: Is tax law in and of itself always “unfair” and thus the rich, Congressional representatives, single people, farmers and ministers alike get benefits and this business is in the category of “get whatever we can” and thus we should fight to keep whatever we can even if it looks unfair?
ANSWER: There have always been and probably always will be inequities in the tax system. We can't go by what "looks" fair or unfair, because an exception to the "normal" can almost always be found.
QUESTION: Is opting out of Social Security an honest act (3 of 10 ministers do) when we must swear that we are opposed to all government sponsored insurances and support programs?
ANSWER: Only the individual can say whether or not it is an honest act on his or her own part. But one thing that should hold true is that no one who opts out of Social Security for this reason should ever be allowed to qualify for any other government insurance or aid--including federal flood insurance, unemployment insurance, worker's compensation benefits and the like.
I'm sorry I signed in as "Anonymous" but I don't remember my "Blogger" name or password, so I will happily state my name here:
--Pete Vecchi
Hey Pete! I should get you to write the wrap up entry every time! thanks for that--pretty much represents my views too... Great having your entry!
I own a farm and if I chose I could get enough money from government subsidies to make a preacher blush. Yes it is legal, but I feel it is wrong to accept it because it was taken by the government from someone who earned it. What right do I have to accept what is rightfully theirs?
The Greeks despised manual labor but Paul said,"Surely you remember, brothers, our toil and hardship; we worked night and day in order not to be a burden to anyone while we preached the gospel of God to you." I Thessalonians 2:9.
There! Paul said it better than I did.
Fluffy
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