New York Times’ religion columnist recently argued in Time Magazine that churches should lose their tax-exempt status. Patheos columnist and Southern Baptist Theological Seminary professor Owen Strachan was among those who responded forcefully to Oppenheimer. I had Oppenheimer on Monday’s show to discuss his radical proposition which would in fact result in the deaths of at least tens of thousands simply by the crippling of one agency’s work –World Vision– and untold suffering at home and abroad:
HH: Joined now by Mark Oppenheimer, who writes the bi-weekly Beliefs column for the New York Times. He is also the editor-at-large at Tablet, and he writes for the Atlantic, the Nation, This American Life, elsewhere. Last week, he wrote for Time Magazine a column that is titled Now’s The Time To End Tax Exemption For Religious Institutions. He includes in that the statement rather than try to rescue tax-exempt status for organizations that dissent from settled public policy, on matters of race or sexuality, we need to take the more radical step. It’s time to abolish or greatly diminish their tax-exempt status. Mark, welcome back to the Hugh Hewitt Show.
MO: It’s great to be back. That was an epic conversation we had a couple of years ago about sports and Christianity, and I’ve been waiting to come back ever since.
HH: Well, this is, you wrote quite the throw down on taking away tax-exempt status for churches. Have you rethought your position since you wrote this?
MO: Well, first, I want to back up and say that as you know, because you read the piece, unlike lots of people in the so-called blogosphere who seem to read only the headline, I don’t say take away tax-exempt status for religious, for conservative or traditionalist religious institutions. I don’t even say take away the tax exempt status of churches and religious institutions. I say non-profit institutions. So we should be clear that mine is an argument on principle that this is a tax loophole that you can drive many, many trucks through – left wing trucks, right wing trucks, and that it doesn’t make sense in the logic of our economy. So to answer your question, which I always want to do, certainly all the feedback I’ve gotten has caused me to refine my position and nuance it, and I’ve thought about other exceptions I would made, and I’ve thought about exceptions I wouldn’t make. It’s been a thrilling ride, because apparently, this touched a nerve. But the important thing to note is this isn’t actually a piece about churches and synagogues. It’s a piece about non-profits.
HH: Well, one of my friends who read your piece says that may be special pleading, because you clearly start out by talking about churches, though you do talk about Yale in this piece as well, so you broaden it out. But let me ask you, as a matter of just factual, do you know how many congregations there are in the United States?
MO: I don’t. Can you tell me?
HH: 350,000 congregations. Those are just churches.
MO: So I’m guessing those are, that’s a number from the IRS in terms of the number that have asked for tax-exempt status?
HH: No, that’s from the Hartford Institute for Religious Research.
MO: Okay, good people. I used to teach at Hartford Seminary, so I would trust that.
HH: So 350,000 churches would lose their tax-exempt status.
HH: I asked earlier in the last hour the executive director of a parachurch ministry that operates for military kids, Military Committee Youth Ministries, how much would he think he would lose in donations. He said 50% or more, and he also pointed out that many foundations can only give to tax-exempt institutions. So you’d be devastating this sector of the country, wouldn’t you?
MO: Right, well, I’m not going to answer that question of whether I’d be devastating this sector of the country. What I am going to do is say first of all, because this exemption has been in federal tax law since 1913, and in fact, goes back in common law even farther, we have absolutely no way of knowing what percentage of donations would or wouldn’t be lost. The second thing I want to say, so anyone who pretends to know, I mean, they’re guessing.
HH: Oh, well let me stop for a second.
MO: Wait, wait, wait.
HH: No, Mark, Mark, let me challenge you. We know that, we know, though, that a significant amount of drop off would occur. Can you not agree to that?
MO: We know that unquestionably some drop off would occur.
HH: Not some, a significant amount?
MO: Well, again, you know, I’m all about the facts. I absolutely have no idea whether it would be 5% of 50%. I think…
HH: Oh, I think you could ask any economist going, any economist, that it would be at least 20%.
MO: Well, interestingly, this has never been studied.
HH: Oh, no, it has been.
MO: And I tried to find it.
HH: Actually, it has been, because it’s been studied on the home mortgage interest deduction. They expect an instant 15% devaluation of home prices. I think you could at least say 15% of deductions would go…
MO: So I think a lot of these loopholes are bad ideas, and I would say that the home interest mortgage deduction, which by the way, as a homeowner, I take advantage of, is another bad idea.
HH: Don’t go far afield, though. A significant amount of money would go out. Go back to your second point.
MO: You want to use the word significant, you can. But I’m conceding your point. You don’t have to beat me down here. I have, I concede in the piece, I think, that of course, there would be some drop off. But I want to back up and be a little bit clear about the tax code. There are two things we’re talking about here, right? One is the fact that you can itemize the deductions on your federal returns, and so anything you give to a non-profit, or a 501c3 non-profit, you can then deduct from your taxable income.
HH: If you itemize.
MO: Right. The other one is the tax-exempt status written into state and municipal law of property owned by non-profits. And in some ways, that’s the more problematic one.
HH: But Mark, that’s all beside, though, here’s the key point, is what would your proposal do in the real world? And first of all, is it Constitutional, because McCulloch v. Maryland says the power to tax is the power to destroy. And you pointed out the common law history of this. We have a Free Exercise Clause. We’ve never taxed churches. So you are proposing the most radical tax change in American history, and you did it off-handedly without thinking of the fact that, and I’ll put this out there for you to answer, this is a core thing. People will die if they adopt the Mark Oppenheimer approach, literally. Do you know how much money the World Vision gives each year to the underdeveloped countries of the world?
MO: I’m eager for you to tell me.
HH: Do you have any clue?
MO: You know, when I was a kid, my grandpa always said do you know William F. Buckley’s debate trick? He poses questions he knows his guest doesn’t have the answer to, and then watches his guest fumble around, and then he gives them the answer.
HH: Well, I’m doing the Buckley thing, but I’m going to give you the answer.
MO: I have no idea. World Vision is not my area of expertise.
HH: Do you have an order of magnitude for World Vision?
MO: I’d love for you to tell me.
HH: $981 million dollars in 2013 that would not be spent if World Vision went away. It’s a para-church ministry. It’s not itself a church. That’s $981 million dollars spent in the third world on tents, on water filtration, on food, on basic hygiene, on getting rid of the most easily cured diseases. Do you want that to end? People will die.
MO: I don’t want that to end. But let’s go back to your own figure, right, the figure your friend made up with no evidence of 50%, right?
HH: He’s sitting right here. Marty? Marty, he’s sitting in the studio. Did you make that up with no evidence, Marty?
Marty McCarty of MCYM.org: It is a hypothesis, but it is based on years of experience of how important a donation receipt is to the donor.
HH: All right, go ahead, Mark.
MO: Okay, so, but I’ll accept your friend’s hypothesis, and I’m really about getting at the truth here. I’m eager to learn, okay? I’ll accept your friend’s hypothesis, and you said World Vision, $900 million. So I’m not being glib about this, but I want to point out that you then shifted to it would completely go away, when in fact, your own argument was $450 million of it would still be there.
HH: No, no, no. I would say people will die if you take away $450 million. I will stipulate that. There’s $450 million dollars less tents, water filtration, medical devices, everything you need…
MO: So now, so interestingly, I’m very interested in the charitable non-profit sector, and I would be interested in how we can preserve it, and I think that’s actually one of the areas that bears really, really interesting discussion. But let me ask you a question. Do you know what percentage of church revenues, that is the money they take in, according to sociologists, they end up spending on that kind of direct service, charitable welfare?
HH: No, I don’t. I imagine it’s in excess of 70%.
MO: Oh, no, no.
HH: I mean operating costs are in excess of 70% from my time on a session of a church twice. We spent in excess of 75% on operating expenses.
MO: Right. So one study by sociologists at the University of Tampa looked at the Mormon Church, which to its credit, does enormous good work throughout the world, and I’ve reported on them, and I’ve reported on Latter Day Saints for a long time. And I take nothing away from their authenticity, their integrity, their attempt to do good works. One study was 25 years of spending, and it concluded that they were at about the .7%, so less than 1% going into direct charitable services.
HH: Oh, but now, that’s just definitional, Mark. That’s…
MO: It is. No, Hugh…
HH: That’s just definitional, because you’re saying at that point that all the Mormon buildings that do all the Mormon good, and all the Catholic churches that do all the Catholic good are sunk costs that don’t do any good, have no social capital, and I, Nicholas Kristof, who as no believer would tell you, that’s an insane proposition. I’ll come back with Mark Oppenheimer. By the way, Mark, have you read Owen Strachan’s piece, yet, on your piece?
MO: You know, I haven’t, but he, his, I know that he’s a professor at Southern Baptist Theological Seminary.
HH: I would, we’re going to come back and talk about it, so you might want to read it during the break. It’s over at Patheos, Owen Strachan at Patheos.
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HH: Some fast facts from the Office of Justice Programs at the Department of Justice. “There are 350,000 religious congregations in the United States. U.S. congregations generate an estimated $81 billion dollars annually in revenues, much of which, according to the Office of Justice Program, is used to support social programs that address social needs. Faith-based institutions engage 45 million volunteers, nearly half the total number of American volunteers.” Mark, what Owen Strachan wrote in his piece is “Consider My Safe Harbor in Anaheim, California, which helps single mothers overcome terrible circumstances. Think with me about Hope Christian Center in the Bronx, which ministers to homeless and drug-addicted men. Think about Act Of Compassion Through Service, a ministry of the 10th Presbyterian Church in Philadelphia, which conducts numerous programs for the homeless, imprisoned and sexually suffering. Think with me about Chuck Colson’s Prison Fellowship. Think with me about the Root Cellar in Portland, Maine, which assisted resettled refugees. Think with me about 2nd Presbyterian Church in Memphis, which has adopted a school and provided untold services to it.” Your proposal is the most radical thing I have seen. You would devastate literally millions of American lives, even if you went just simply to the fact that Alcoholics Anonymous meets free of charge in these buildings all across the United States. You’ve really got to rethink this. Simply because they don’t agree with the new sexual norms established by the…
MO: No, now wait, Hugh, Hugh, take that back, and why don’t you restate my actual position. Go ahead.
HH: Okay, I’ll read it. “Rather than try to rescue tax-exempt status for organizations that dissent from settled public policy on matters of race or sexuality, we need a more radical step. It’s time to abolish or greatly diminish their tax-exempt status.”
MO: And then what do I go on to say? Who else should lose tax-exempt status?
HH: You talk about Yale, but you’re specifically beginning…
MO: Wait, wait, wait, and I say Planned Parenthood…
MO: …and I say the NRA. Let’s be fair. Let’s be fair.
HH: Well no, but you began by starting with those…
MO: That was the first paragraph. But actually, you’re an educated fellow. You read to the end. And you know that I am in fact, contrary to what Owen Strachan argued in that piece, I am not talking about conservative churches. I am talking about all non-profits. I’m talking about the National Football League, Planned Parenthood, the NRA, the International Society for Cryogenic Freezing of your brain or something like that.
HH: But not, but the ones that you would allow…
MO: That’s what the piece is about.
HH: Wait, let me focus in…
MO: So can we talk about that?
HH: No, no, but you say the logic of gay marriage rights would lead to a reexamination of conservative churches’ tax exemption. But when that day comes, it will be long overdue. I can see keeping some exemptions, hospitals in particular, an indispensable and non-controversial public good. Would you keep the tax exemption for St. Joseph’s Catholic Hospital, which will hold to the teachings of the Catholic Church with regards to sexuality?
MO: The point is, so this is interesting, right? You want me to examine, you want me to examiner churches to say what’s your ideology.
HH: No, I don’t.
MO: Let me finish. My proposal is to say actually, let’s get the government out of the business of decided what’s a church and what’s not. And let’s never get it near the business of decided…
HH: But you want some public goods…
MO: Let me finish.
HH: No, but you want some public…
MO: Let me finish….who has what ideology and who doesn’t. I’m saying let’s get the government out of the deciding whose church is a business.
HH: I heard that. Everyone heard that. But that’s not what you say. You want to keep some exemptions, hospitals in particular. You want to decide.
MO: So, so….
HH: You want to pick winners and losers, and you want to repeal the Free Exercise Clause.
MO: So, no, you really think I want to repeal the Free Exercise Clause?
HH: Yes, because you want the power to tax [which] is the power to destroy.
MO: Is that a real, Hugh, simmer down, is that a little overheated, Hugh?
HH: It is not, because if you can tax, I don’t know how much you know about McCulloch V. Maryland, or tax authority, or Constitutional Law or the Free Exercise Clause. But if you can tax something, you can destroy it. So if you can…
MO: So right now, right now, in order to qualify for tax-exempt status, you have to, and you want to talk about religious organizations, right? If that’s the status you want under 501c3, you have to say that you’re doing religious work. In order to figure out who’s doing religious work, the IRS got into the business of deciding on a test, it’s like what’s a religion and what’s not.
HH: It’s not hard. I teach these cases every year.
HH: There are a few stray cases, but of the 350,000 congregations, there is less than one tenth of one percent. Indeed, there’s less than one thousandth of one percent controversial cases, Mark.
MO: Now wait…
HH: That’s a straw man.
MO: Now wait a second, wait a second, first of all, it’s not a straw man. It’s a very real situation in which the IRS can go in. And here’s the fact on the ground which you know, as do I, which is in order to stay within the bounds that the IRS sets, because remember, the people on your side want the government granting religious exemption, so there’s in the business of deciding who’s a religion and who’s not.
HH: No, the people on my side want the Free Exercise Clause.
MO: Now wait a second, in order to stay within the bounds…
HH: The people on my side are Constitutionalists. That’s all.
MO: Don’t be afraid of my argument. Let me speak, Hugh.
HH: I’m not afraid of your argument. Your argument, Mark, really…I’m going to give you the last minute.
MO: Let’s just feel…let’s just feel…So listen…
HH: But I’m not afraid of your argument. You just want to get rid of religion.
MO: Hugh, my life is reporting about religion. I report about it, because I love it. I’m on the board of my synagogue, which by the way, would be hurt by the plan I’m suggesting. So let’s have some good faith here. Let’s talk about it, okay? But my point is that in order to stay within the bounds of the IRS, clergy have to promise not to preach on politics. They can’t endorse a candidate.
HH: That is unconstitutional. The Alliance Defending Freedom has had Pulpit Freedom Sunday.
MO: They tie their own mouths.
HH: No, they don’t.
MO: Because of the IRS, because of the Planned…You’re right.
HH: That’s the IRS. That’s the Johnson Amendment that came along in the ’50s. It’s unconstitutional as hell. It’s never been enforced. You know that the black church in America routinely invites political figures into their churches, to their pulpits, and no one ever lifts a finger, and that’s good.
MO: Again, that’s not what I said. The pastors themselves work very hard to stay out of politics. I don’t think they just have to.
HH: Oh, you’ve never been to a black church during election season.
MO: I’m in favor of a robust clergy that can say what they want. And the tax-exempt, look, Cal Thomas agrees with me on this.
HH: It doesn’t, well, Cal might be a legion of one. Mark, come back next week. We’ll talk more when I’m back from vacation, but I can’t believe you hate churches this much, because you would put thousands, tens of thousands of them out of business.
End of interview.