Religious leaders are furious that the sloppy, wasteful Republican tax bill that passed in 2017 (and gave enormous tax breaks to the wealthiest Americans) inadvertently instituted a tax that houses of worship are supposed to pay.
The GOP wants churches to pay taxes. And religious leaders are now asking Congress to repeal that part of the bill before it’s too late.
This all began in 2017 when the GOP passed a tax bill with virtually no debate or discussion. They ignored Democrats when making changes to the bill, even going so far as to include handwritten notes in the margins to squeeze items in at the last second. They were desperate for a “win” at any cost, so everyone in the party got on board, ultimately giving wealthy people a tax break they didn’t need at the expense of the rest of society.
But as POLITICO noted last summer, one of the big changes, meant to offset other parts of the bill, was that there would no longer be a tax break for “fringe benefits.” Companies could no longer write off employees’ meals on their taxes, for example. But because non-profits don’t usually entertain clients, Republicans decided on a flat 21% tax on their “benefits.”
The main benefits affected are transportation-related, like free parking in a lot or a garage and subway and bus passes. It also targets meals provided to workers and, in some circumstances, may affect gym memberships.
The problem with that rule, in the eyes of religious leaders, is that a lot of churches rely on those perks for their own employees:
“What we’re talking about is an income tax on the church for providing parking to its employees — that’s what we’re talking about,” said Mike Batts, chairman of the board of the Evangelical Council for Financial Accountability, which is circulating the petition denouncing the tax. “It’s absurd.”
Batts added that while all for-profit and non-profit groups are affected by this, for-profit groups have other tax breaks unavailable to churches. So this rule disproportionately affects them. (Actually, it affects all non-profits the same, but religious groups have always been allowed to play by a special set of rules, so they hate the idea of being placed on an equal playing field.)
While some legislation was proposed to eliminate this provision of the bill, the law had already seriously affected some congregations.
The Jewish Federations of North America is looking at a new $75,000 tax bill this year because of the change.
“A lot of people are just finding out about it and the more people find out about it, the more pressure there will be on Treasury and Congress to either delay implementation or consider changing this,” said Steven Woolf, senior tax policy counsel for the group.
The irony in all this was that the Party of Religion, because of its own irresponsible and ignorant actions, was going to hurt the very people they constantly say they want to help. The Religious Right, especially, had no one to blame but themselves. This is the party they propped up.
Now, as Tax Day approaches, they’re asking Congress once again to undo that part of the bill.
In a letter March 1 to Democratic and Republican leadership on the House Ways and Means Committee, the religious leaders cited the conclusion of an Evangelical Council for Financial Accountability official who determined that the provision “effectively creates an income tax on churches for the first time in U.S. history.”
The signers said they welcomed the Dec. 10 guidance from the Treasury Department that they said “offered some relief” to entities facing the new tax, but that it remained cumbersome because it required the organizations to follow a four-step process to determine the amount of tax owed, which could vary month to month.
… two Catholic bishops said that they still held concerns that even with the guidance, the “unjust” tax provision remains a concern because houses of worship and nonprofits still will be required “to file tax returns for the first time in our nation’s history and will impose a new tax burden” on them.
Maybe they should stop voting for conservatives who don’t even read what they sign…
It’s tempting to just let them deal with it. House Democrats aren’t obligated to do anything here. Let the churches pay taxes, and then just blame it on the Republicans who passed the bill. It’s their fault, after all. At least the country would finally benefit from all the perks given to religious groups over the years.
If they do repeal the provision, though, they might as well fix the law so that all non-profits are treated the same way. As we’ve posted about before, houses of worship have a special set of rules that allow them to remain opaque about how much money they take in and where it all goes.
(Image via Shutterstock. Thanks to Tom for the link. Large portions of this article were published earlier)