Republicans have shoehorned one of President Trump’s campaign promises to evangelicals into the tax bill: overturning the Johnson Amendment requiring churches to abstain from political activity if they want to maintain their tax status.
This has long been on the wish list of conservative churches, and the Trump administration may help them realize that dream.
Which means the rest of the country must decide whether this is a good idea. To decide that, we should first think about why churches are forbidden from campaigning in the first place.
I don’t mean the actual reasoning behind the Johnson Amendment, which appears to have been motivated by President Lyndon Johnson’s desire to hamstring opponents who might otherwise have succeeded in forcing him out of office.
Over the years, people who think about tax law have articulated a reasonably consistent set of principles for restraining churches from campaigning from the pulpit. These have nothing to do with the reasons you will normally hear bandied about, like separation of church and state. Rather, they involve the basic principles of good taxation, which start with the idea that in most cases, income should be taxed once, and only once. Let’s consider what this principle means in practice.
Say you want to put up flyers around your neighborhood to support a presidential candidate. You’re doing some of the things businesses do, buying paper and staplers and printing services. Should you be taxed like a business? Of course not, tax experts say, because you’ve already paid taxes on the income that you’re using to print the flyers. It’s your money now.
Now let’s say your rich friend loves your flyers and wants to help you print more. You set up a joint bank account so your friend can deposit money whenever funds are running low. Now you look more like a business, so should you be taxed? Nope, for the same reason: Both of you have already paid taxes on that income.
Now add more rich friends . . . dozens, hundreds, thousands. At what point should this become a taxable activity? As long as you are still doing basically the same thing — pooling private funds to pursue joint personal goals — the answer is arguably “never.”
A church resembles that large group of friends hanging out, doing some worship, having bake sales to support missionary work. Why, then, should they not be able to add “political campaigning” to the list of stuff they do together?
Because churches are not just exempt from taxation themselves; donations to churches count as a charitable deduction, which means any amount you donate reduces your taxable income by that amount.
That money has not been taxed at all, which means that donations are no longer simply an instance of private consumption. They are being subsidized by the government — and the government has the right to decide what sort of activity it wants to subsidize.
Charitable groups are often the beneficiaries of government money aimed at various public ends, like providing lunches to school children and helping care for the needy. Allowing those groups to enjoy a large tax subsidy while campaigning for politicians would encourage the growth of a sort of perpetual-motion money machine, in which tax-exempt donations are funneled into lobbying the government for more tax money.
Alternatively, we could just strip away the charitable deduction and let churches and other groups do as they like with their donations. This would get the government out of the business of deciding what counts as a “real” religion and what sorts of sermons count as “political activity.” It would be scrupulously fair. And it would be unpopular with churches.
In fact, the best arrangement is probably the status quo, in which we forbid churches from politicking, and then don’t enforce it too tightly. Churches are, like the rest of us, quite free to do “issue advocacy.” They are not free to campaign for candidates.
But the legal restrictions keep them from going hog-wild to become an official arm of some political party. And those who don’t attend a church, mosque, synagogue or temple have to pay for their flyers with no help from the government — but also get to sleep in on the Sabbath.
© 2017, Bloomberg View