Secular Victory: Religious Income Tax Exemption Ruled Unconstitutional
November 23, 2013
In a
victory for secular Americans, a federal court has ruled a religious income tax exemption that allows “a minister of the gospel” to not pay income tax on a portion of their compensation to be unconstitutional.
On Thursday, U.S. District Judge Barbara B. Crabb for the Western District of Wisconsin issued a strong,
43-page decision declaring unconstitutional the 1954 “parish exemption” that allows “a minister of the gospel” to not pay income tax on a specific portion of their compensation.
About her decision Crabb wrote: “Some might view a rule against preferential treatment as exhibiting hostility toward religion, but equality should never be mistaken for hostility. It is important to remember that the establishment clause protects the religious and nonreligious alike.”
The
decision could have far-reaching financial ramifications for pastors, who currently can use the untaxed income to pay rental housing costs or the costs of homeownership, including mortgage payments and property taxes.
The unconstitutional law, passed by Congress in 1954,
allows a clergy member to use the untaxed income to purchase a home, and then, in a practice known as “double dipping,” deduct interest paid on the mortgage and property taxes.
The 1954 bill’s sponsor, Rep. Peter Mack, argued ministers should be rewarded for “carrying on such a courageous fight against this (godless and anti-religious world movement).”
The
Freedom From Religion Foundation (FFRF), which brought the lawsuit along with their co-presidents, Annie Laurie Gaylor and Dan Barker, consider the ruling a significant victory with far-reaching ramifications. Gaylor
called the lawsuit “a sleeper,” saying it has received little media attention and may not be widely known by religious organizations. That will no doubt change with this win, she said. Given the dollar figures at stake, she expects clergy members to pressure the White House to appeal the decision to the 7th U.S. Circuit Court of Appeals in Chicago.
“The Court’s decision does not evince hostility to religion — nor should it even seem controversial,”
commented Richard L. Bolton, FFRF’s attorney in the case. “The Court has simply recognized the reality that a tax free housing allowance available only to ministers is a significant benefit from the government unconstitutionally provided on the basis of religion.”