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Taxing Churches Would Marry Church And State


A spate of articles in prominent venues (such as Time and the Washington Post) have argued we should do away with “tax exemptions” for churches. In the most recent volley, David Niose claims that religious tax exemptions equal religious subsidies. Since fewer Americans are going to church, he suggests it’s time to stop subsidizing religion.

The claim that tax exemptions for churches (or for religious organizations more broadly) are just the same thing as subsidizing religion is absurd. As our friend Francis Beckwith points out, that’s a lot like saying the government subsidizes each of us because it doesn’t tax our income 100 percent (there is a formal equivalency in the two positions). But for the sake of argument, we’ll put the absurdity of the position to the side.

The argument that so-called “tax exemptions” for churches are exemptions from taxes that might otherwise be legitimately imposed rests on a fundamental misapprehension of the understanding of church and state that is part of the fabric of our constitutional order. The very language of “tax exemptions” connotes a permission or indulgence of the state that—as sovereign—possesses the right to tax religious organizations but has instead chosen to refrain.

Taxing Claims Jurisdiction

The problem with the notion that the state can tax churches comes acutely into focus when we consider John Marshall’s opinion in McCulloch v. Maryland. In that case, the State of Maryland had enacted a tax on all banks not licensed by the state legislature. The Bank of the United States branch had, of course, not been licensed by Maryland’s legislature. So Maryland sought to tax it.

To tax someone or something is to exercise sovereign power over that person or thing.

The cashier for the branch of the national bank, one James McCulloch, refused to pay the tax. So the state of Maryland brought a suit against him. Maryland won the suit in Maryland court. McCulloch then appealed to the U.S. Supreme Court. In his opinion for the Supreme Court, Marshall rejected Maryland’s argument that it could tax the bank. Maryland predicated its claim on the sovereignty of the states over the federal government (which Maryland held to be the creature of the states).

Marshall acknowledged that taxing is an exercise of sovereign power—for “the power to tax is the power to destroy.” But he rejected the proposition that Maryland possessed sovereignty over the national bank or its branch in Maryland. The people of the United States were sovereign relative to the bank and its branches, not the state of Maryland. So Maryland could not tax it.

What matters for our purposes is the essential connection—in Marshall’s reasoning—between taxing and sovereignty. To tax someone or something is to exercise sovereign power over that person or thing. As we see it, there is no way around this claim. But then, quite obviously, any state or federal taxation of churches or religious organizations would constitute an exercise of sovereignty by the state over the church—that is, over religion. To maintain that government has the power to tax religious organizations is to affirm the sovereignty of state over church. To affirm that proposition is to reject any meaningful distinction—much less separation—between church and state. In short, those who advocate the right of the state to tax religious organizations are abandoning the separation of church and state.

This Idea Is Anti-American

The American experiment was founded upon a very different conception of the relation of church and state. The American founders and framers grounded religious free exercise (which is certainly more than holding certain beliefs and meeting, occasionally, to affirm them with others) in the rights of conscience—rights they took to be natural and inalienable.

The duties and rights of conscience are prior to civil society and government. They come before it.

In his “Memorial and Remonstrance against Religious Assessments” James Madison held that the duty to worship according to the dictates of one’s conscience “is precedent both in order of time and degree of obligation, to the claims of Civil Society.” Every person who “becomes a member of a particular society” “must do it . . . with a saving of his allegiance to the Universal Sovereign.” Consequently, “Religion is wholly exempt from” the authority of “Civil Society.”

Moreover, “if religion be exempt from the authority of the Society at large, still less can it be subject to that of the Legislative Body.” For legislative bodies “are but the creatures and vicegerents of the former [Civil Society]. Their [legislative bodies’] jurisdiction is both derivative and limited.” Government in general and legislative power in particular can never possesses any authority or right except for what civil society gives it. And what civil society does not have (in this case, it cannot have), it cannot convey. In all this, Madison echoes Pope Gelasius I’s claim that civil rulers “have no competence [meaning jurisdiction or authority] in divine affairs.”

Madison’s position is quite obviously that religion (“the duty which we owe to our creator,” as he says, quoting the Virginia Declaration of Rights of 1776) is entirely outside the jurisdiction of both civil society and government. The duties and rights of conscience are prior to civil society and government. They come before it. They trump. Government can never acquire authority over them.

‘Religion is wholly exempt from’ the authority of ‘Civil Society.’

In short, Madison resoundingly denies the very possibility of the sovereignty of the state over religion. The occasion for his argument was a tax Patrick Henry proposed to support teachers of the Christian religion. Madison opposed such a tax. But his argument necessarily entails the serious wrongness of the state taxing the church (or churches or religious organizations).

Indeed, we could say Madison gets to the wrongness of taxing to support teachers of the Christian religion from the wrongness of government or civil society exercising authority or jurisdiction over religion and the free exercise thereof. Because civil society and government may not exercise authority over religion (a position which entails the wrongness of taxing religious entities), it would be wrong to use taxation to support religion.

Where Government Restraint Ends

Some will criticize this idea that civil society and government have no “cognizance,” “jurisdiction,” “authority,” or “competence” over “religion” or “divine affairs.” What if a religion includes sacrificing humans at the vernal equinox? Or, more aptly, what if some person or group claims their religion requires them to take some action that constitutes an injustice towards others?

If someone injures another, he should be punished, whatever his motive or reason.

Our answer is the same as Roger Williams’s. If someone injures another—that is, commits an injustice against another person—then the person causing the injury, whatever his motive or reason, should be punished for injuring the other person. If someone commits murder, whether or not he claims religious motivation for the act, then he should be punished for murdering. Government must uphold justice and protect natural rights.

We readily concede that there are normative requisites for “religious exercise” and that this includes, minimally, not harming another in his natural rights. But this is perfectly compatible with Madison’s position that government has absolutely no jurisdiction or authority over religion or its free exercise. Indeed, to hold otherwise is adopt the position Thomas Hobbes advanced in his “Leviathan”—that the sovereign must control what moral and religious doctrines may be taught in the state.

Religion Isn’t What You Think It Is

Our point is this: not taxing churches is not a permission or indulgence the state grants religion. Rather, as centrally important framers such as Madison maintained, the state has no jurisdiction over the church (or churches or religion) at all. It follows, necessarily, that the state has no right or authority to tax churches or religious entities.

Anyone claiming government may or should tax religious organizations has either abandoned the separation of church and state or fails to apprehend the meaning of ‘religion.’

Any taxation of churches and religious organizations would simultaneously violate the free exercise and the establishment clauses of the First Amendment. Not taxing churches and religious organizations is a matter of constitutional principle as well as of a proper understanding of the limited jurisdiction of the state. Anyone claiming government may or should tax religious organizations has either abandoned any intelligible conception of the separation of church and state or fails to apprehend almost completely the meaning of “religion”—which, when put in terms of the right to believe whatever you want in religious matters or to worship when and where you want with other likeminded individuals, is thereby conceived in exceedingly reductionistic terms.

Madison considered rulers who exercise authority beyond delegated power “Tyrants.” He considered those who submitted to such encroachments “slaves.” As should be apparent, he also considered any attempt of civil society or government to exercise “authority” over religion to be an encroachment of the worst variety. As a matter of deductive logic, he considered rulers who attempted to exercise authority over religion to be tyrants. Those who encourage government to do so, therefore, encourage tyranny.

With Madison, we deny on moral and constitutional grounds that government can exercise authority or jurisdiction over religion. We therefore deny that government has any authority (moral or constitutional) to tax it. Any such tax would be blatant government encroachment, and such encroachment would violate our deepest constitutional principles. Like Madison in his day, we remonstrate.