With seven words—“It is going to be an issue”—the U.S. government signaled to orthodox Christians that if they don’t drop their opposition to same-sex marriage, their religious institutions could lose their tax-exempt status—or worse.
Those words came in 2015, when the Supreme Court heard oral arguments in Obergefell v. Hodges, the case that legalized same-sex marriage throughout the United States. One exchange highlighted how the ruling could affect religious liberty. Justice Samuel Alito asked Solicitor General Donald Verrilli how it would affect educational institutions that opposed same-sex marriage:
JUSTICE ALITO: Well, in the Bob Jones case, the Court held that a college was not entitled to tax-exempt status if it opposed interracial marriage or interracial dating. So would the same apply to a university or a college if it opposed same-sex marriage?
GENERAL VERRILLI: You know, I . . . I don’t think I can answer that question without knowing more specifics, but it’s certainly going to be an issue. I . . . I don’t deny that. I don’t deny that, Justice Alito. It is . . . it is going to be an issue.
In the 1983 case of Bob Jones University (Bob Jones University v. United States), the Supreme Court’s ruling was clear: the religious clauses of the First Amendment’s do not prohibit the IRS from revoking the tax-exempt status of a religious university whose practices contradict a compelling government public policy.
The policy at Bob Jones was indeed loathsome and contrary to Scripture, which the school later admitted when it apologized for its racist past. But opposition to same-sex marriage is not the same as racial animus. Yet the government, through its representative, signaled that Christian schools may soon be treated like racists and pariahs for refusing to give up the view of marriage shared by almost all people throughout history prior to the 1990s.
It’s not merely that Christian schools will have to choose between accepting federal funds and keeping their religious views about sexuality. If the choice were to follow the example of schools like Hillsdale College or New Saint Andrews College and forego taking any federal money, the decisions about what to do would be painful, but obvious.
But what it being proposed is to revoke non-profit status not only of schools but also of churches, a move that would destroy many religious institutions. According to the IRS, if an organization’s tax-exempt status is revoked, it is no longer exempt from federal income tax and is not eligible to receive tax-deductible contributions. As Albert Mohler, president of The Southern Baptist Theological Seminary, noted in 2015, “The loss of tax-exempt status would put countless churches and religious institutions out of business, simply because the burden of property taxes and loss of charitable support would cripple their ability to sustain their mission.”
Beto Follows Obergefell Logic
On Thursday, during a CNN town hall devoted to LGBTQ issues, Democratic presidential candidate Beto O’Rourke was asked, “Do you think religious institutions like colleges, churches, charities—should they lose their tax-exempt status if they oppose same-sex marriage?”
“Yes,” O’Rourke said without hesitation, drawing applause from the Los Angeles audience.
“There can be no reward, no benefit, no tax break for anyone—or any institution, any organization in America—that denies the full human rights and the full civil rights of every single one of us,” he added.
“So as president we’re going to make that a priority and we are going to stop those who are infringing on the rights of our fellow Americans.”
Only four years after Obergefell, O’Rourke is showing Christians that the threat posed by legalized same-sex marriage is more real—and more radical—than they may have yet realized.
Why Churches Should Be Exempt
Churches in the United States received an official federal income tax exemption in 1894, and they have been unofficially tax-exempt since the country’s founding. All 50 states and the District of Columbia also exempt churches from paying property tax. Changing that status would have an immediate deleterious effect on churches and pastors, many of whom are already struggling financially.
A 2015 survey by the Hartford Institute for Religion Research found that almost one in five congregations (16 percent) suffer serious financial difficulty. Adding the burden of taxation would swiftly put them under. Additionally, revoking tax-exempt status would likely eliminate the “parsonage exemption” on ministers’ housing. This would cost American clergy members $2.3 billion over five years. And it would be damaging to pastors who make an average salary of $39,146 a year.
Yet while agreeing the policy would have a damaging effect, some Americans think the policy is reasonable. After all, isn’t giving tax-exempt status to churches an unfair advantage? There are two reasons it is not.
First, many people believe tax-exempt status is reserved only for churches and charities. In reality, the IRS exempts a broad array of organizations, including labor unions, trade associations, horticultural organizations, and social clubs. As Dimitri Cavalli has pointed out, other organizations that are tax-exempt include Americans United for the Separation of Church and State, American Atheists, American Humanist Association, Freedom from Religion Foundation, Richard Dawkins Foundation for Reason and Science, Planned Parenthood Federation of America, Secular Coalition for America Education Fund, Council for Secular Humanism, Catholics for Choice, Feminist Majority Foundation, Center for Reproductive Rights, Ayn Rand Institute, Southern Poverty Law Center, Clinton Global Initiative, the Gay and Lesbian Alliance Against Defamation (GLAAD), and PETA. Churches are not being given special treatment.
Second, the typical justification for the tax exemption is that such institutions provide vital charitable benefits to society. While that is undoubtedly true, the benefits argument is not the strongest reason to support tax exemption. A better reason is that we need to maintain a distinction between the state and the church. As Richard W. Garnett—a law professor at the University of Notre Dame_explains, the separation of church and state is not a reason to invalidate or abandon these tax exemptions, but is instead a powerful justification for retaining them:
The point of church-state “separation” is not to create a religion-free public sphere. It is, instead, to safeguard the fundamental right to religious freedom by imposing limits on the regulatory—and, yes, the taxing—powers of governments. After all, as Daniel Webster famously argued in the Supreme Court (and the great Chief Justice John Marshall agreed), the power to tax involves the power to destroy, and so we have very good reasons for exercising that power with care—especially when it comes to religious institutions.
Should LGBT Issues Trump Religious Liberty?
Indeed, the power of destruction through taxation is the reason O’Rourke and others are threatening to revoke tax exemption. In 2005, Jonathan Turley, a law professor who supports LGBT rights, warned this would happen:
The debate over same-sex marriage represents a coalescing of rights of free exercise, free speech, and expressive association. With the exception of abortion, same-sex marriage is almost unique in blurring neat divisions between these rights. Many organizations attract members with their commitment to certain fundamental matters of faith or morals, including a rejection of same-sex marriage or homosexuality. It is rather artificial to tell such groups that they can condemn homosexuality as long as they are willing to hire homosexuals as a part of that mission. It is equally disingenuous to suggest that denial of such things as tax exemption does not constitute a content-based punishment for religious views. . . . The denial of tax-exempt status presents a particularly serious threat to these organizations and puts them at a comparative disadvantage to groups with contrary views.
When Turley made this claim 14 years ago, many assumed he was overstating the case. Surely, same-sex marriage would not require people and organizations to give up their deeply held religious beliefs. But now, as we’ve seen time and time again over the past few years, the threat to religious freedom is all too real. What is significant about O’Rourke statement is not the novelty of the idea, but that the Democratic Party no longer believes it will be punished for being open about how LGBT issues trump religious liberty.
Are supporters of same-sex marriage—including many misguided Christians—willing to let Christian high schools, colleges, seminaries, and churches be put out of business simply for holding a biblical view of marriage?
Sadly, I suspect they will follow what Rod Dreher calls the law of merited impossibility: “It’s a complete absurdity to believe that Christians will suffer a single thing from the expansion of gay rights, and boy, do they deserve what they’re going to get.”
Joe Carter is an editor for The Gospel Coalition, author of The Life and Faith Field Guide for Parents, the editor of the NIV Lifehacks Bible, and the co-author of How to Argue Like Jesus: Learning Persuasion from History’s Greatest Communicator. He also serves as an executive pastor at the McLean Bible Church Arlington campus in Arlington, Virginia. You can follow him on Twitter.