Tax the Churches: Because Why Shouldn’t They Pay for Their Private Jets Like the Rest of Us?

The United States has long upheld the separation of church and state, a principle designed to keep religious institutions from influencing public policy. But in one ironic twist, it also means that some of the richest organizations in the country are untaxed—despite often being some of the wealthiest entities around. We're talking about churches, of course! Yes, those holy havens of goodwill that are also sitting on massive, tax-free fortunes, all while you, the hardworking taxpayer, are left footing the bill.

It's time we had an open conversation about whether churches—many of which have huge financial reserves, luxurious real estate, and multi-million dollar assets—should be receiving a tax exemption. This sacred loophole has allowed these institutions to amass wealth, influence, and power, all without contributing to the very system that supports them. It’s time for the churches to pay their fair share, don’t you think?

The Tax-Free Status: Holy Money, Batman!

Churches in the U.S. are exempt from taxes under Section 501(c)(3) of the Internal Revenue Code. This means they don’t pay income taxes, property taxes, or even sales taxes on donations, making them one of the only groups in the country with an all-access pass to tax avoidance (IRS, 2018). The justification? Their charitable work supposedly makes them immune from contributing to the general fund. But let’s not kid ourselves—some of these organizations are more business than blessing.

Take the Church of Scientology, which has been involved in multi-million dollar lawsuits over the years, despite collecting hundreds of millions annually in tax-free donations (Goodstein, 2017). And let’s not forget about those mega-churches with millions of dollars in assets, sometimes even operating like full-fledged businesses. How much of that tithe money is actually being used for charity versus building lavish headquarters? The disparity is jaw-dropping. And here’s the kicker: as taxpayers, we are subsidizing their operation. You’re essentially helping build the holy empire of some very wealthy religious leaders who claim to be humble servants of God.

How Much Are We Really Giving Them?

Let’s break it down. In 2019, the Catholic Church alone reported assets of more than $10 trillion, much of which is untaxed (Swanson, 2019). Meanwhile, many mega-church pastors like Kenneth Copeland, Joel Osteen, and Creflo Dollar live in multi-million dollar mansions and travel the world in private jets—all funded by donations from their flocks. According to the National Taxpayers Union (2020), tax exemptions for religious organizations cost U.S. taxpayers around $71 billion annually. That’s 71 billion dollars we could use to fix infrastructure, fund education, or, hey, provide healthcare. Instead, it’s helping build palatial homes and lavish lifestyles for some of the wealthiest people on the planet.

And then there are those who claim these riches are being used for good. Really? It’s one thing if every penny was going to feed the hungry, house the homeless, or provide medical services. But the reality is that much of this money is funneled into private enterprises and used for opulent real estate projects that have little to do with community aid.

What About Charitable Work?

You might ask, “But don’t churches do a lot of good in their communities?” Sure, some do. Many provide food pantries, shelters, and community outreach programs. But let’s not romanticize the idea that churches are all benevolent organizations. In fact, according to the Nonprofit Quarterly (2017), many churches operate as businesses with lucrative partnerships with companies and often avoid accountability when it comes to how they spend their tax-free revenue. Some even use donations for aggressive lobbying to influence public policy. Charitable work? Sure. But let’s not ignore the profits they’re raking in.

In 2019, the Hillsong Church in Australia (which also has operations in the U.S.) reported revenues of $80 million and used some of that money to build luxury properties for its leaders. Their financial reports, though technically under scrutiny, are often murky at best. The charitable work of the church is clear, but how much of that wealth is actually going back into the community, and how much is being used to create an empire of wealth for its leaders? That's the question.

The Real Cost of Church Tax Exemptions

The real kicker is that while churches reap financial benefits, taxpayers are left to foot the bill. According to the IRS, around 10% of all 501(c)(3) organizations are religious groups, and they are not required to disclose their financial records like other nonprofits (IRS, 2018). Without the requirement for transparency, it’s impossible to know how much of their wealth is used for charitable purposes versus lining the pockets of their top-tier clergy. All the while, the rest of us are burdened with the social safety net costs they could be covering.

How many schools, hospitals, and social services could be funded by taxing these religious organizations? In fact, some argue that taxing churches could generate billions of dollars that could go toward public welfare programs that are consistently underfunded (Goodstein, 2017). Instead, churches collect donations tax-free, while we continue to pay for basic services out of our pocket.

The Hypocrisy of Religious Exemptions

Let’s also point out the hypocrisy of it all. Churches, by their very nature, are involved in politics, whether it's endorsing specific candidates, campaigning for laws that align with their religious beliefs, or making political statements from the pulpit. So, shouldn’t they be held to the same standards as every other organization in terms of taxation? If a church can influence public policy, raise millions of dollars, and operate as a business, then it should be treated as such by the IRS.

Conclusion: Time to End the Church Tax Exemption?

It’s time to take a long, hard look at the tax exemptions given to religious organizations in the U.S. Churches, many of which are incredibly wealthy, are receiving massive subsidies from the taxpayers without giving back proportionally. The notion that they’re working for the public good while sitting on multi-billion-dollar assets is an outdated fantasy. Taxing these entities isn’t just a good idea—it’s a necessary step toward creating a fairer, more accountable system where the wealthiest organizations contribute to society in a way that is consistent with the values of equality and fairness we hold dear.

Perhaps it’s time to ask: if these organizations are truly focused on helping others, what’s the harm in them paying their fair share?

References:

Goodstein, L. (2017). Churches and the tax exemption loophole: Time to end the favoritism? The New York Times. https://www.nytimes.com

IRS. (2018). Tax-exempt organizations: Understanding tax exemptions for churches. Internal Revenue Service. https://www.irs.gov

Nonprofit Quarterly. (2017). Transparency in the nonprofit sector: The issue of church exemption. Nonprofit Quarterly. https://www.nonprofitquarterly.org

Piketty, T. (2014). Capital in the twenty-first century. Harvard University Press.

Saez, E., & Zucman, G. (2020). The triumph of injustice: How the rich dodge taxes and how to make them pay. W.W. Norton & Company.

Swanson, A. (2019). The Catholic Church's wealth and its role in the American economy. The Atlantic. https://www.theatlantic.com