Tax Subsidized Politicking

Paul Sherman at the Center for Competitive Politics directs our attention to a "problem" discussed by Dan Gilgoff in the USA Today. Gilgoff contends that the failure of the IRS to enforce the no politicking from the pulpit rule casts such a serious shadow upon the political landscape as to require immediate attention from the already overworked tax man.

The law banning tax-exempt organizations, which include churches, from partisan politics was engineered by then-Senate Minority Leader Lyndon B. Johnson. Its detractors, mostly Christian conservatives, have argued that Johnson was seeking retribution against a non-profit group opposed to his re-election.

While there is some truth to that claim — Johnson's language was attached to another, unrelated bill as an amendment with reportedly little or no debate — the law has been upheld by the courts. And even before its passage, the U.S. government had long tailored tax exemptions to charities that confronted problems such as poverty because such groups provided a clear benefit to the public and saved the federal government time and money.

That's why American taxpayers should be concerned about the IRS enforcement vacuum: Tax exemptions for non-profit groups were never intended to offer tax relief to partisan political advocacy.

By failing to enforce the 1954 rule, however, that's exactly what the IRS is doing.

But is it. Paul Sherman notes:

[E]ven if that was the "purpose" behind the law, it's difficult to imagine "reform" advocates rallying behind that principle today; if a pulpit endorsement is an example of illegitimately "subsidized partisan politics," then the direct funding of partisan activity through presidential public financing and "clean elections" statutes must, a fortiori, be illegitimate.

The op-ed gets a little closer when it argues that failure to enforce the law will "offer tax relief to partisan political advocacy." In the abstract, this is a more plausible concern, and it fits with the general principle that funds used for politicking "consist exclusively of dollars that have already been taxed." Gregg D. Polsky, A Tax Lawyer's Perspective on Section 527 Organizations, 28 Cardozo L. Rev. ___ (2007). The editorial cartoon accompanying the article subtly reinforces this argument; the bag held by the preacher is undoubtedly filled with untaxed donations, filthy lucre when applied to partisan advocacy. But this is also where to argument fails, for what is being complained about doesn't really cost money.(Citation and link in original)

Here is where the govnernment and reform advocates get into a little logical trouble.

By necessity, preachers and pastors are paid a stipend by their church, a church that is a tax exempt organization, which I don't think anyone would argue is an improper state of affairs. Therefore the speech, any speech, by a pastor or preacher is by its very nature subsidized by the government. What is the functional difference between whether the preacher makes his endorsement before the pulpit to his parishoners or by appearing on the steps of state house or court house and publicly endorses a candidate via the media? Is not the endorsement by members of the clergy, a practially required right of passage for many candidates, still an endorsement by a member of the clergy, a tax subsidized professional calling? No one would deny the preacher, as a person, his right to talk about candidates. Why then do his First Amendment rights end when he steps into the pulpit, his place of work? Does a doctor, a lawyer or a reporter's First Amendment rights get altered when they engage in their profession? Indeed, Mr. Gilgoff and the preacher are doubly protected? What makes the reporter's speech that much more important than a preacher's?

On another note, politically active, and politically savvy, churches routinely "endorse" a candidate by use of tax subsidized voter guides. These guides, published by the churches, will list a series of issues, such as abortion, gay marriage, or any other number of issues which the church in question considers important and then lists the candidates position on those issues. Only a true dolt would not be able to deduce which candidate the church supports. Because churches are free to discuss issues of the day, i.e. abortion or gay marriage or takings or anything else, what makes that speech different from endorsing a candidate. True, encouraging their parishoners to vote for one candidate over another is clearly "political intervention," but it seems like such a small leap given the reality of today.

Churchgoers vote. That is a simple fact proven time and again by voter studies. In fact, regular attendence at church is a much greater predictor of voting activity than any other social circumstance. The fact that clergy endorse candidates is not all that surprising. But just because a clergy member endorses a candidate doesn't mean that the parishoners will vote for that candidate any more than all readers of an op-ed page will vote for the newspaper's endorsed candidates. In the end, this is much ado about nothing.