A modest proposal

President Bush says that he is going to spend some of the political capital he amassed in the recent campaign on, among other things, reforming Social Security (more on this in a future blog post) and the tax code.

Reforming the tax code is an excellent idea. The current tax code is riddled with loopholes and exceptions that favor a whole panoply of special interests, notably corporations; any effort at making the distribution of the tax burden more fair and equitable, and simplifying the code overall, is laudable indeed.

There is one special interest group in particular that I'd like to single out for consideration.

It is high time that we did away with tax exemptions for religious organizations and churches (and mosques, synagogues, temples, etc.)

I am not anti-religion... mine, yours, or anybody else's. In fact, I think religious faith is by and large a very fine thing.

But every dollar that a church or religious organization fails to pay in taxes--and there are billions and billions of dollars in tax-free donations flowing through the religious economy every year, and billions more in real property and investments controlled by religious organizations--must be made up for by other taxpayers, individual and corporate, rich and poor.

This amounts to an indirect but very real taxpayer subsidy of religion, and unless you are a pantheist it is dead certain that you are subsidizing groups in whose doctrines you do not believe and may in fact disagree with strenuously.

Moreover, the exemption for churches (and other houses of worship) is automatic under Federal law; it need not be applied for, and churches must make no formal disclosure of their financial records, as other exempt organizations are required by law to do. That this invites abuses and gaming of the system is self-evident.

Another issue with the tax-exempt status of religious organizations: it perpetuates an increasingly unsustainable "polite fiction," which is that churches and religious organizations do not endorse or oppose political candidates or use their resources in partisan campaigns because it's prohibited by the tax code.

Well, of course they do, from both the right and the left, and it's folly to pretend that they don't. Changing the tax code would remove the fetters on the freedom of speech of our religious leaders and let them fully speak their minds.

Abolishing religious tax exemptions will provide a powerful new revenue stream for government, allow religious institutions to take on increased financial responsibility for the services they use, and increase their freedom to maneuver within the American polity.

It's a win-win situation.