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Church Organizations and the Tax-Exemption-Is-a-Subsidy Mistake


The position that a tax exemption is a subsidy has always been wrong. In no way is a person being subsidized when the state simply refrains from seizing a portion of that person's private property. The idea that it is a subsidy relies on the assumption that all wealth is the government's wealth first, and that any wealth held in private hands is somehow being withheld from the proper owners (i.e., the government). 

Matt McCaffrey recently wrote in the topic here and here, and I've explored the topic here

The same line about subsidies is now being paraded around in an effort to massively increase taxes and government revenues by cutting off tax exemptions for religious organizations. Mark Oppenheimer at TIME says

And many churches and synagogues sit on exceedingly valuable tracts of land (walk up and down Fifth Avenue to see what I mean). The property taxes they aren’t paying have to be drawn from business owners and private citizens — in a real sense, you and I are subsidizing Mormon temples, Muslims mosques, Methodist churches.

Just think of all the loot the government could get its hands on if those pesky tax exemptions were eliminated.

It's a safe bet that Oppenheimer doesn't care about private property except when it comes to his particular pet issues (i.e., he believes in a "right to choose" on one issue), so massively increasing the size and scope of government by eliminating tax exemptions is all to the good for him. The fact that it would eliminate numerous schools and other charitable institutions (the ones that are religious) is just icing on the cake.

For those who at least feign in the direction of being pro-private property, however, the correct response to a tax exemption is more tax exemptions — not a call to raise taxes in the name of "fairness."  


Contact Ryan McMaken

Ryan McMaken (@ryanmcmaken) is a senior editor at the Mises Institute. Send him your article submissions for the Mises Wire and Power and Market, but read article guidelines first. Ryan has a bachelor's degree in economics and a master's degree in public policy and international relations from the University of Colorado. He was a housing economist for the State of Colorado. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.