In the wake of the Supreme Court’s decision on same-sex marriage, a font of fanciful think pieces have sprung up to explain what it means going forward. Both the Left and the Right have jumped into a debate over tax-exempt status for churches. Felix Salmon argues at Fusion that if a church refuses to marry people of the same sex it should lose its tax-exempt status in the same way that Bob Jones University lost its tax-exempt status for banning interracial dating.
Charles Cooke at NRO takes on that assertion: “If we are to have such a thing as a ‘nonprofit’ group, the federal government surely cannot decide who is eligible and who is not on the basis of whether they happen to agree with the present constitutional order.”
Salmon, perhaps sensing that he was being accused of bullying the religious, clarified his position on Twitter:
Truth is, if I was in charge I’d abolish ALL tax exemptions and deductions. Force all subsidies to be explicit.
— Felix Salmon (@felixsalmon) June 29, 2015
This is where it gets interesting, because Salmon’s solution doesn’t merely threaten the houses of worship of the religious Right. It threatens the houses of worship of the secular Left, as well. Almost every museum, library, theater, concert hall, university, abortion advocacy group, and transgendered outreach program is a non-profit.
The Milwaukee Museum Art has given us a good example this week. They accepted the donation of a work of art that depicts Pope Benedict XVI made entirely of condoms. Conservatives immediately called for the museum to lose its tax-exempt status. In a blog post, the archbishop of Milwaukee said:
Some may want me to be more upset at the museum for their callousness – calling for boycotts, suppression of donations or picketing. God, religion and faith have been insulted by others throughout the ages and by autocrats and movements far superior to our little local museum. But, still God rules supreme, the Church is here and will be until the end of time, and faith continues to inform and form.
Good for the archbishop. Crushing and punishing dissent, even of a platform one has dedicated his life to, is not justified. The Left, once dedicated to the idea of dying for the right of those they disagree with to express themselves, now wants to cut off tax exemptions for those they disagree with. Salmon and others want to go a good deal further, to do away with tax-exempt status across the board. For universities as well as churches and, one must imagine, arts organizations. In Time magazine, Mark Oppenheimer argues that “Yale University has an endowment of about $25 billion, yet it pays very little to the city of New Haven, which I (as a resident) can assure you needs the money.”
Ending Tax Exemptions Would Defenestrate Cultural Institutions
But in all this heady, hot-take talk of doing away with 501(c)3 status, there are few things that haven’t been mentioned. Almost every arts and cultural institution in the United States is a 501(c)3 non-profit organization. Let me express in one word what would happen to those institutions if the feds revoked their tax-exempt status: Chaos. Nothing short of that. For better or worse, arts and culture in the United States is so dependent on non-profit status that most of its organizations would collapse without tax-deductible donations.
The very first article I wrote for this site suggested the arts suffer from too much reliance on contributed revenue. In later articles, I argued that the National Endowment for the Arts and the tax-exempt status of arts and culture institutions are a tax on the middle class to enable the entertainment of the wealthy.
But I have never called for an end to tax-exempt status for arts organizations, even though I think in the long run it would benefit art, because without donated money our arts and culture infrastructure would collapse. For better or worse, this is how our country has decided to fund artistic expression. It’s not an accident that it is also how we deal with funding religious expression.
Arts Institutions Have Powerful Friends
When The New York Times decided not to show the Charlie Hebdo cartoons, it came under attack for a double standard about insulting religious beliefs. This was its response: “Here is how I made the call, and it wasn’t easy…We have a standard that is pretty simple. We don’t run things that are designed to gratuitously offend. That’s what the French cartoons were actually designed to do.”
What is the image of Pope Benedict made of condoms designed to do? What was Andre Serrano’s “Piss Christ” that opened these wounds in the late 1980s designed to do? Why has The New York Times never wavered in its commitment to offer these images to its readership? The short answer is that the Catholic Church doesn’t cut people’s head off or immolate them anymore for expressing opinions that counter its teachings. For this reason, a cowardly New York Times feels comfortable celebrating its humiliation in condoms on canvas.
The Left would be wise to tread carefully on tax-exempt status. Many of its totems are built upon tax-deductible contributions. I humbly suggest this is not a thread they want to tug on. Quite frankly, it’s not even a realistic political possibility. The wealth and political power of the boards of directors of Lincoln Center, the Museum of Modern Art, The Goodman Theater, the Wilma, the Museum of Natural History, the Smithsonian, et al., makes any super PAC look like a guy sticking lawn signs in the ground for a candidate. Which is to say, it’s not going to happen.
The 501 tax-exempt codes are bizarre, counterintuitive, inefficient, and prone to corruption. But it’s what we have. To take it away would throw humanitarian, arts, culture, and some political institutions into a state of disarray that would take decades to resettle. It’s not a serious suggestion. And we should stop talking about it. What’s good for the goose is good for the gander, and at the end of the day, the liberal goose needs these tax exemptions much more than the conservative gander does. The death of non-profit status would destroy non-profit arts organizations. It would not destroy the Catholic Church. So if this is the fight the Left wants, go for it. But they should be careful what they wish for.