Not all tax exempt organizations are the same.

The Register still has it wrong. (“Churches cross line with political endorsements”, 4/9/2015 – see link below.)  Churches with ministers who advocate for specific candidates should be allowed to be tax exempt.  But donors who contribute to them should not get a charitable tax deduction.

There are two types of tax-exempt organizations. First, there are the Charitable, Religious and Educational organizations, (tax code 501c3 organizations), that pay no income taxes, (and often don’t pay other taxes), plus donors get a charitable tax deduction on their income taxes for the amount of their contribution.  Second, there are all other tax-exempt organizations that pay no income taxes, (and often don’t pay other taxes), but donors do NOT get a charitable deduction. They are properly classified as tax exempt, since they are organized to not make any kind of profit, but their activities are not charitable, so no charitable tax deduction is given.

There are many tax exempt organizations that do not make any profit, but that are not charitable and whose donors don’t get a tax deduction.  They include Rotary clubs, political parties, country clubs, political issue organizations, chambers of commerce, special interest clubs, etc.  None of them try to make any profit, but they are not charitable.

To the extent that any not-for-profit organization advocates for or against specific candidates, that organization is not doing charitable work. It is doing political work. Under the principle of equal treatment under the law, donors to churches that advocate for specific candidates should not get a charitable tax deduction.  If a church wants its donors to receive a charitable tax deduction for contributions made, then the minister should not advocate for candidates from the pulpit, or through any other communication from the church.

Link to Register editorial: http://www.desmoinesregister.com/story/opinion/editorials/caucus/2015/04/08/rgisters-editorial-churches-cross-line-political-endorsements/25500433/

 

Corporations are people, money is speech.

After witnessing the deluge of outside political advertising that inundated Iowa during this latest election cycle, it’s easy to conclude that our government should place limits on political contributions and political advertising.  But our Supreme Court correctly decided in the Citizens United case that governments should not be allowed to limit the independent political expenditures of groups of people, even if they are organized as corporations.
 
Most of the corporations that make independent expenditures for or against candidates or ballot issues are simply groups of like minded people who have come together to promote their common beliefs.  They are not profit-making corporations that run businesses and sell stock on Wall Street.  Citizens United is a group of people who are organized as a corporation explicitly for the purpose of promoting a political agenda.
 
If contributions are given directly to a candidate, there is good reason for concern about bribery and corruption.  But as long as people or groups are independent of candidates and their campaigns, they should be free to spend as much of their own money as they want, and they should not have to disclose the names of contributors.  Our founding fathers published pamphlets and other communications anonymously when they advocated against their rulers and called for a revolution.  They were very much thinking about political speech when they wrote in the 1st Amendment of the Constitution: “Congress shall make no law … abridging the freedom of speech, or of the press…”

 

Churches can speak freely!

On 10/16/2012, The Des Moines Register advocated for allowing churches to speak politically without jeopardizing their charitable tax status. (“Free speech should apply to churches”)   People who contribute to not-for-profit charitable organizations that qualify under tax code section 501c3, including churches, get to take a charitable deduction when calculating their income taxes.  This means that taxpayers are subsidizing these charitable contributions.
Political parties, campaign organizations, lobbying groups, and other not-for-profit organizations are tax exempt, but under different tax code provisions.  Supporters of those organizations do not get a tax deduction for contributions.  That is as it should be.  Taxpayers should not subsidize political speech.
If we simply allow all churches to advocate politically without limit, and supporters are allowed to take a charitable deduction for contributions made to those churches, then expect new “churches” to be established for the primary purpose of advocating politically.
The solution to this problem is already available.  If churches want to advocate politically, all they have to do is elect a different not-for-profit tax status.  They would still be tax exempt, but supporters would not get a tax deduction for contributions.