Imagine owning this $1.75 million mansion and not having to pay any property taxes. Reverend Randy White does, and you are subsidizing his lifestyle. Under the“parsonage exemption,” Ministers are allowed to deduct the cost of their living arrangements from their taxable income (e.g., mortgage or rent, utilities, furnishings, upkeep, etc.). The total number of ministers in this country is about 600,000. If you take an average salary for those individuals of $85,037 and assume an average parsonage exemption of $8,000, you arrive at a subsidy of about $1.2 billion for the living arrangements of ministers in America every year.
The parsonage exemption is only one form of subsidy that religion enjoys in the United States. Other government subsides include: tax deductions on donations, no income tax (federal, state, and local), no property tax, no investment tax, no sales tax, direct subsidies (Faith-Base Initiatives), related business income tax subsidy, volunteer labor subsidy, and the SECA (self-employment) tax exemption. According to a report by the Council for Secular Humanism, Americans subsidize religions to the tune of $71 billion every year.
Religions get tax breaks because people mistakenly believe that they are largely charitable institutions engaged in beneficial services for the community. This is not the case. As the report explains:
Religions are quick to trumpet when they do charitable work—ironically for Christians, since the Bible explicitly says not to (Mathew 6:2). But they don’t do as much charitable work as a lot of people think, and they spend a relatively small percentage of their overall revenue on such work. For instance, the Church of Jesus Christ of Latter-day Saints (the LDS or Mormon Church), which regularly trumpets its charitable donations, gave about $1 billion to charitable causes between 1985 and 2008. That may seem like a lot until you divide it by the twenty-three-year time span and realize this church is donating only about 0.7 percent of its annual income. ... One calculation of the resources expended by 271 U.S. congregations found that, on average, “operating expenses” totaled 71 percent of all the expenditures of religions, much of that going to pay ministers’ salaries.The report breaks down the subsidies in the table provided below. Note that $71 billion is a conservative estimate because it only takes into account six of the fourteen major government subsidies to religion.
Are religions more like charities or entertainment services? One only needs to watch Joel Osteen in action to realize that entertainment is a huge component of religion.
People pay to be energized, inspired, coached, and entertained, but religion does not receive the tax treatment of other forms of entertainment.
Imagine the benefit to this country if religions paid their fair share. At the local level, police and firefighters, who provide services to churches, might not need to make budget cuts year after year. Likewise, states could fund education and prevent the decline of our schools.
The sad reality is that people would rather give money to their church than the government, and the government gives them a tax break (up to 50% of their income) to incentivize this behavior. As a result, we see religions like the Mormon church amass the wealth of a small country, while governments at the local, state, and national level are struggling to perform their vital functions.