PolitiFact Debunks Viral Claim Over Church’s Tax-Exempt Status
Removing religious tax exemptions from churches would not reduce the personal income tax rate in the United States, according to a recent analysis by fact-checking website PolitiFact.
In August, a Facebook post went viral by claiming that the annual cost of the religious tax exemption was $ 71 billion and that “if the church paid taxes, everyone would only have to pay 3% in taxes.”
However, Tom Kertscher of PolitiFact posted a fact check Tuesday who rated the claim “bogus”.
Noting that the post ignores multiple aspects regarding churches and taxation, Kertscher explained that “the post was flagged as part of Facebook’s efforts to tackle fake news and disinformation on its news feed.”
âTax-exempt organizations are still subject to certain taxes. For example, the exemption does not apply to payroll taxes that cover Medicare and Social Security costs for their paid employees,â Kertscher wrote.
“Tax-exempt organizations that have paid employees are required to pay their share of these payroll taxes and withhold their employees’ share as well.”
Jared Walczak of the Tax Foundation told the point of sale that the actual cost of the federal church tax exemption was $ 2.4 billion, not $ 71 billion. Additionally, Walczak argued that stripping churches of their tax-exempt status would add only 0.06% to federal revenue.
“Even if governments went all-out on church taxation, rejecting all ordinary tax rules, they could only generate a few billion dollars, a drop in the bucket in a system with $ 3.8 trillion in federal tax revenue and about $ 1.8 trillion in national and local tax revenue, âWalczak added.
âEven if we applied the logic of treating churches as for-profit entities and assumed an ordinary rate of profit for them, the little extra income that this would generate would not move the effective tax rate of individuals at all. “
The idea of ââeliminating the tax-exempt status of churches has gained traction among Democrats in recent years.
In 2019, then-Democratic presidential primary candidate Beto O’Rourke told a CNN town hall that if elected he would end the tax exemption for churches, schools and charities that oppose same-sex marriage.
âThere can be no reward, no benefit, no tax break for anyone or any institution, no organization in America that denies all human and civil rights of all of us,â O said. ‘Rourke at the time.
While O’Rourke received widespread applause for his position, his remarks also sparked backlash from both Liberals and Conservatives.
O’Rourke’s main openly gay opponent, Pete Buttigieg, claimed that O’Rourke did not understand “the implications of what he was saying.” Buttigieg warned of the potential consequences of adopting such a policy.
âIt means going to war, not only against churches, but I would think of mosques and many organizations that may not have the same view of various religious principles as I do,â Buttigieg said.
“If we want to talk about an anti-discrimination law for a school or an organization, absolutely, they should not be able to discriminate,” he added. “But tackling the tax exemption of churches, Islamic centers or other religious establishments in this country, I think it will only deepen the divisions that we already live.”
More recently, the debate over eliminating tax-exempt status has resurfaced as the Catholic Church continues to reflect on communion restraint from pro-abortion Catholic politicians.
In response to the approval by the United States Conference of Catholic Bishops of a document âOn the Meaning of the Eucharist in the Life of the Churchâ at its general assembly earlier this year, Representative Jared Huffman , D-Calif., Suggested withholding church tax-exempt status on such a policy.
“If they are going to politically arm religion by ‘berating’ Democrats who support women’s reproductive choice, then a ‘rebuke’ of their tax-exempt status may be in order,” Huffman wrote on Twitter.
While the document approved by the bishops will provide guidelines for receiving Communion, it leaves “decisions to deny Communion to each bishop.”
Following criticism, the USCCB issued a statement stressing that “whether or not to deny Holy Communion to an individual or group was not on the ballot.” Stressing that “the document being drafted is not supposed to be of a disciplinary nature, nor that it does not target an individual or a category of persons”, the press release specifies that “the bishops have taken no decision to ban to anyone to take Communion “.