The Case for Organised Religion

Religions Deserve To Be Exempt From Taxation

M. D. Kwak

THEY SAY NOTHING IN THE WORLD IS CERTAIN EXCEPT FOR DEATH AND TAXES. Strangely enough, organised religion has managed to mitigate both. For the former, they offer believers life after death. And as for the latter, most organised religions in the developed world enjoy financial assistance from the government. Obviously, most liberal democracies uphold the bifurcation of church and state as a foundational principle of secular democracy. Yet, this financial assistance often comes indirectly – in the form of tax-free status, and despite its controversy, I firmly believe in its merits.

Opponents to religions’ tax-exemption point to the existence of mega-churches that spend millions of dollars building ostentatious temples or financing the lavish lifestyles of their millionaire ‘pastors’. Televangelist Kenneth Copeland enjoys quite a modest lifestyle; donations to his Christian movement have only managed to provide him with a $20 million private jet and $6.3 million lakefront mansion (what a paragon for religious service, am I right?).

But I would suggest that these worst-scenario cases ought not drag down the vast majority of actual religious institutions. Indeed, many of the largest religious institutions do a remarkable amount of good for the world by operating life-saving charities that aid the most vulnerable. According to the 2017 Australian Charities Report, 30% of all charities reported their main activities to be religion. Religious charities are undoubtedly one of the most impactful in the world and, fundamentally, they are strong because they are driven by religious scripture. Whether it be the Islamic doctrine of Zakat or the service that Jesus inspired within his followers, there is a strong religious basis for charity which manifests on a widespread scale in reality, albeit imperfectly.

On a principled level, charities should be exempt from taxation as they are not-for-profit, instead fulfilling a valuable humanitarian role that benefits society in ways even the government has failed in. But in terms of cash flow, removing tax-free status for religions would dry up donations and significantly reduce the capacity of religious institutions to carry out charitable work and improve people’s lives.

However, the most glaring problem with this justification is that many religious institutions either don’t operate charities at all, or devote a significant portion of their tax-free donations into the perpetuation of their religion – which isn’t directly linked to charity (e.g. renovating their church or paying a stipend to their minister).

But even from a secular perspective, I would suggest that the very existence of religions, itself, is not so terrible. Indeed, places of worship are an important spiritual haven for millions of people who care deeply about their faith and connection with fellow believers. Whilst atheists will often dismiss this by pointing to the symmetrical benefits of connecting with friends or family, in a non-religious environment, the spiritual benefits that religion offers their followers is irreplaceable, and often strengthen friendships and familial bonds. The people who donate to religions do so, because they see the community they are a part of, as something valuable and meaningful to their lives – something they deem worthwhile of being perpetuated. Unfortunately, there have been cases where that trust has been violated – with horrific sexual abuse scandals that rocked the Catholic Church, or those corporation-like mega-churches. But for the most part, religions (even without their charity-operating arm) provide an enormous social good, promoting communal cohesion, offering spiritual comfort in times of crisis and instilling a framework of altruism and service that better our communities. 

Ultimately, whether you see religious institutions as socially utile or not, most organised religions do not operate like a corporation. They exist as a community group. A community group in which members have willingly opted into and chosen to donate their money (which has already been subject to income tax) into funding its existence. In that sense, churches are analogous to community sports clubs or any other community group which are also exempt from taxation. 

Religious institutions that abuse their financial privileges should be investigated and subject to punitive action if necessary. But those are the minority of cases and comprise the very worst of extremist and nonsensical religions. Religious institutions are not corporations. They are a source of community and charity, and they deserve their tax-free status.