In a 20-minute rant on Last Week Tonight, John Oliver skewered televangelists and the IRS, exposing how easy it is to set up a “religious” tax exempt organization. To illustrate the point, the show actually set up a tax-exempt religious organization of its own: Our Lady of Perpetual Exemption.
When you wade into this subculture, even a little bit, the absurdity of the laws surrounding this issue become immediately apparent. Con artistry, for example, can be prosecuted under fraud statutes. How are televangelists, as a group, different from con artists? They are allowed – publicly, on TV – to solicit people’s money, while promising “miracles”, for which they can provide no evidence or assurance. But, then, on the other side of it, how are televangelists not religious leaders? They preach to people, cloaking themselves in the vague language of Christianity and people seem to believe what they say, so it is difficult to see how they differ from any priest, imam or rabbi.
Whatever they are, they bring in a lot of money, and this is the crux of Oliver’s argument. Personally, I do not agree with the income tax, and believe it should be abolished. But, since the income tax is the system we have, we are left with a problem. The problem is this: the IRS ought to be tasked with collecting revenue, not sorting out philosophical debates. The IRS isn’t really equipped to judge what you do to make your money, they are more equipped to judge how much tax you owe based on how much money you take in.
So in this respect, the IRS rules Last Week Tonight lampooned with Our Lady of Perpetual Exemption are sensible. People debate what constitutes a religion, or religious organization, and the answer is far from clear: is it really the place of the IRS to parse the difference between the Catholic Church, the Church of Latter Day Saints, the Church of Scientology, or Kenneth Copeland Ministries? That would effectively mean that the IRS decides what is and what isn’t a religion, and this is way outside the purview of a tax collector.
Free Inquiry Magazine estimated that in the United States, the total cost to society of tax exemption for religious organizations is more than 70 billion dollars per year. (Keep in mind that amount includes more than just income tax. It also includes other taxes like property taxes, to which churches are also exempt.) To put that in perspective, tax exemption for churches deprives the government of more than enough money to pay for the entire food stamp program which provides food to disadvantaged families. When you realize that defining a religious organization is nearly impossible, and that the amount of money lost is significant enough to make a real difference for society, there is a very obvious solution: tax all churches’ revenue, and stay away from judging how they run their businesses.
(That is, if you’re going to have the income tax to begin with. But perhaps that’s a topic for another day…)