Bill Maher: Should Churches be Taxed?

A little more than a year ago, Bill Maher hosted actor Ashton Kutcher, author and editor Jon Meacham, and Florida Congresswoman Ileana Ros-Lehtinen on his HBO program, Real Time. A YouTube clip from the program circulated recently throughout social media circles.

Church leaders might find the clip particularly interesting–and not just because of Maher's well-documented skepticism of religious beliefs (for instance, in 2008, he released Religulous, a feature film with a title combining the words "religious" and "ridiculous.")

Rather, it's a question he raises to his guests.

At one point, Maher asks Meacham, Kutcher, and Ros-Lehtinen whether churches should be taxed. Without hesitation Meacham says yes, offering his own church–one located on valuable New York City property–as an example to support his position. After Maher quips about the "invisible" product churches "sell," Meacham adds they're only open one hour per week anyway.

Kutcher suggests churches should be judged based on their philanthropic worth before determining their tax status, a "luxury tax" of sorts. The congresswoman remains silent on the subject throughout the clip.

Conversations like this only underscore the growing chorus of opposition to the tax-exempt status of churches. One need only read the YouTube comments below Maher's clip to see how hostile that chorus has become.

It's time churches responded, joining the conversation in an active, productive way. Lest Maher or any of his guests think otherwise, churches already pay many types of taxes, despite their exempt status, whether it's payroll taxes for employees, fees for local services, or taxes on substantial amounts of unrelated business income.

As we've previously covered, local cities and municipalities continue to eye more taxes and fees for churches. As these efforts intensify, it's increasingly important for churches to share their stories with their local communities.

Why?

Because if local municipalities and talking heads have their way, taxes and fees will arrive on an unprecedented scale. And they need reminding of the frequent aid churches provide to their local communities.

Churches big and small frequently are on the frontlines to help homeless and transient people through food pantries, soup kitchens, and benevolence funds (the 2011 State of the Plate survey showed many churches increased budgets for benevolence last year, despite financial struggles within some of those congregations). Numerous churches host free vision and dental clinics, and scores conduct food and clothing drives, often after disasters strike at home and abroad (witness recent efforts from Japan to Joplin, and word this week of church volunteers continuing to pay their own way to rebuild New Orleans nearly six years after Hurricane Katrina). Many more provide tutoring and volunteer services to nearby schools, an increasingly valuable effort as school districts with ever-shrinking resources scramble to meet the needs of students.

Even large churches, often subject to the most heated criticism because of their visibility, offer significant philanthropic contributions (for instance, Willow Creek Community Church's untold success battling poverty and AIDS in Africa or Saddleback Church's PEACE Plan initiative).

And these activities happen not just one hour a week, but seven days a week, every week of the year.

The effects of increased taxes and fees on churches will be significant to every community. With higher tax bills to pay, churches will have fewer resources to deploy to meet tangible and intangible needs.

One such example of this consequence emerged this week. A church administrator wrote this letter to the editor of the Bangor Daily News in Maine:

Unfair assessment
The viability of Aldersgate Methodist Church is threatened by tax assessments by the city of Rockland representing a 166 percent increase in valuation of our property since 2003.
The assessor asserted the property outside the footprint of the church is now subject to tax. The city values this land at $625,000 – a twenty-fold increase since we purchased it in 1994. Taxes on that scale threaten our existence, curtailing our ministry to 120 members and services and donations to the local food pantry, soup kitchen, and other local, national and global missions.
The church filed two abatement requests: the high assessment on its parsonage, and seeking exemption on the church's driveway and parking lot, but did not prevail in either hearing. The assessor has broad authority to combine or reconfigure parcels and the board of appeals is predisposed to deny petitions, rarely challenging the assessor. The city determined that Aldersgate is not a charitable and benevolent organization (a designation that would have ensured exemption of the entire parcel), and offered no explanation for the high annual increases in assessments on the church's parsonage property.
We don't understand how our property (rocky, densely wooded, steep hillside and protected wetlands) became the focus of massive tax hikes, or why our church was singled out for canceling the exemption on surrounding property outside the footprint of the church. If this can happen to us, what protections do other churches and private homeowners have in the face of unfair assessments?
Kathy Lane
Chairwoman, Administrative Council

Will communities really benefit by assessing additional taxes on churches? The answer is no. Whatever gains municipalities make in their coffers will likely go right back out the door as the stresses of human need redirect to already-overburdened government programs.

Somehow, though, I'm certain churches would still find ways to provide, just not to the level they have.

But let's not even go there.

It's time to speak up.

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is published with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations."

Recent Posts
Subscribe to Church, Law & Tax
Best Practices for Managing Church Staff

Best Practices for Managing Church Staff

Learn the legal issues involved in hiring, firing, managing and screening workers.
Food Safety Guide: Church Potlucks and More

Food Safety Guide: Church Potlucks and More

Learn how to safely prepare and store foods before your next church dinner.