Religion and Taxes in the United States

In modern society, we pride ourselves in thinking we have a well-adapted government.  But then, technologies like the internet or cellphones are making sweeping changes to the world around us.  Along with those technological wonderworks is the ever-present, ancient and headstrong religion.

In the 18th and 19th Century, religion was the mainstay of most households.   The bible arguably outnumbered all other books combined in the United States.  What is the effect of a largely religious population base?  Firstly, churches are going to acquire a large amount of money and influence.  Secondly, the population being mostly religious, is going to approve of this.

In the 20th Century, the vast majority of those churches have not grown, but a few of them have flourished.  Catholicism is as strong as ever, Protestants have quite a foothold, and particularly LDS, or Mormons, have a very large impact on the United States.  They even founded the great State of Utah for us.

Over time, from their first buildings in the USA, to their now present and dominant churches in nearly every town, religion has lost its luster amongst the population, but definitely maintained a growing membership.  In most of these churches, tithing and donations are collected (billions of dollars a year, added to what is already billions, if not trillions, of dollars a year) and are used to either convert more members, build more buildings, or influence politics to the church’s interest.

Now, wait a minute.  Wasn’t the idea seperation of church and state?  What do you call it when a church can donate tens of millions to a charity or a cause, and not another?  That can easily be turned into a political tool.

At the same time, churches are humble, honest, good-hearted and moral and all that.  They make people happy, make amazing citizens, and are a major cause of quite a bit of good for the country.  Why tax that?

The arguments are all well-made and quite honorable.  The largest issue to me, however, is given a long enough timeline, a church, when untaxed in a closed economic circuit (at this point, the global village), can proceed to gain tithes, or income while being thrifty, and if they have a large enough percentage of the population, can slowly acquire a recognizable percentage of the entire currency.  This would cause deflation, possible economic collapse, and possible political unrest or control.  It would not even be the intention of the church to become the economic leader, and therefore the political leader, but it would happen automatically due to this effect of being untaxed and well budgeted.

This argument would make it seem as if churches of a particular size, especially global ones that take the money out of the country, should be most definitely taxed. Since not only could they cause deflation, but by completely exiting the country with the funds (for example, taking tithes or donations and offerings to a church in Europe, or a mission in South America) they can cause economic crisis for the government without even realizing it.

At the same time, most religious persons or leaders are fairly big spenders on their churches and congregations.  This creates economic benefits, as the zero tax allows the money to be turned over again without the government (or whoever the government owes money to) getting their hands on it, and with that low tax comes lower rates of unemployment and discouragement.  However, this is only applicable at the small scale.  Large scale churches never spend more than they gain.  It is a standard fiscal policy among any large entity.

In the end, some could say the best route might be to create stipulations that 1. all money earned, that the church does not want taxed, must be spent within a specific period of time, 2. all money earned over a specific amount, as per the best interest of the economy, must be taxed, and 3. all money that a church or religion wants to transfer out of the country must be taxed as if earned by a corporation, to also help protect the economy and welfare of the state.

Or the best route may be to not change a thing at all.