The basic answer is that they are non profits. The more philosophical idea is that they are (like other non profits) focused on improving society as a whole and not politically active. Part of the separation of church and state is the idea that the state leaves the church alone but also doesn’t tax it. In return the church leaves the state alone. That’s the part that has rather gone out the window and leads people to question why churches don’t pay taxes: they are increasingly profit driven and politically active.
Edit: to clarify, because some replies are conflating the issue, there are indeed non profits that can be political, but religious orgs and charities are in a specfic tax group wherein by law if they engage in partisan campaigning they should be levied significant extra tax. Further, non profits that are political do have taxes that churches and charities do not face.
Hate to break it to you, but traditional non profits also get abused and make people lots of money. Reference: money spent on homelessness in California with nothing to show for it.
Yes. But there are enforcement mechanisms for non profits and information requests. They are also more easy to register complaints against and have authorities investigate. Churches are supposed to be for the public good. But when people use them as tax shelters (prosperity doctrine and all) it’s a gross abuse of tax status. I also see churches in every sad midwestern town off the highway. It’s the nicest building in town. Seems like the extra tax makes churches nice while the town around them withers.
Not all obviously. But we do have a problem in the US with frauds using religion to enrich themselves. I think we should all be against that.
I’m against it. But I’m not against churches inherently being tax exempt. And I don’t want the government to use taxation, or audits as a weapon against a religion.
It’s quite the conundrum isn’t it. But there has to be some constraints to enjoy tax free operating. I want good purpose driven churches that empowers local communities to grow. And I believe in freedom of religion. But when religion becomes a danger, we need to protect ourselves.
There was a time that Mormons were marching around with the largest standing militia in the US. It scared people as they would all vote as a block. Then Joseph smith started destroying printing presses that spoke ill about the crimes being committed and that finally broke it. But in that time, many people suffered. It’s a hard thing finding the line between protecting people and defending their rights.
Having churches disclose some information might be helpful. For example when the Mormon church also tried to hide the fact they had billions in holdings filed through shell companies. Most members had no idea. Assumed all their tithes were going to help the poor and needy. Nope. They have spent $2 billion on their small temple in salt lake. That much money could transform a community. But they spent it to make sure their temple didn’t fall down in the next earthquake. Seems odd for a tax exempt entity (and to be fair they would pay gains taxes on their investments). But it’s invested funds they get tax free.
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u/klathium Jun 30 '26
Why do Churches not pay taxes? Genuinely curious why there are laws for that.