Organized religion, federal law, and America’s endlessly convoluted tax code have collided in Wisconsin, via a court ruling that does away with a benefit the clergy have enjoyed for over half a century.
Fox News and the Associated Press report that U.S. District Judge Barbara Crabb sided with the Madison-based Freedom From Religion Foundation and struck down a federal law enacted in 1954 that exempts “ministers of the gospel” from paying income taxes on parts of their compensation designated for housing allowances — a perk that adds up to $800 million a year in tax savings for clergy of multiple religions.
The FFRF argued that the law was unconstitutional for extending a benefit to religious employees but not secular ones in similar situations (or at least that secular employees had to meet more stringent criteria), and that clergy could exploit the benefit to double dip — i.e., buy a home with their untaxed income and then deduct the home’s interest payments from their mortgage and property taxes.
“In reaching this conclusion, I do not mean to imply that any particular minister is undeserving of the exemption or does not have a financial need for one,” Crabb wrote. “The important point is that many equally deserving secular employees (as well as other kinds of religious employees) could benefit from the exemption as well, but they must satisfy much more demanding requirements despite the lack of justification for the difference in treatment.”
Crabb also struck down the law in 2013, but the 7th U.S. Circuit Court of Appeals reversed the ruling, saying the co-presidents of the anti-religion group who challenged it didn’t have standing to bring the lawsuit because they had never been denied the parsonage exemption.
So in 2015, Freedom from Religion’s co-presidents requested the tax benefit and were rejected by the IRS, leading them to file a new lawsuit last year.
U.S. Department of Justice spokeswoman Lauren Ehrsam declined to comment Monday.
FFRF co-president Annie Laurie Gaylor celebrated the “huge” ruling and predicted it would withstand appeals, maintaining that “everybody knows we’re right, they just don’t like changing the law.”
Crabb’s ruling did not include a decision on whether tax benefits already in the pipeline should be blocked from taking effect. She set an October 30 deadline for both parties to present their arguments on that point.
Jeremy Weber at Christianity Today has a good rundown of background and analysis on the issue.
At first glance, this particular issue doesn’t seem to be as clear cut as either side would make it out to be. On the one hand, let’s not pretend that government regulations don’t give a litany of benefits to secular employees and entities, too, or that it doesn’t harm the religious, too. I think it’s safe to say that if most Christians had to choose, they’d pick the freedom to not be involved in abortions or same-sex marriage ceremonies over tax breaks.
On the other hand, the fact remains that this particular one is a federally-backed religious advantage. Say, here’s a crazy thought: why don’t we get rid of all groups’ special breaks and loopholes and tax-exempt statuses, and simply make everybody’s income tax rate smaller, so that everyone can more easily afford housing (or whatever else they’d spend their own money on) without the government wading into the weeds of who “deserves” what most?
Crazy, I know….