Taxing Churches? The GOP Did It... By Accident

Why did Donald J Trump sign a bill to tax churches 21%

Academic, seminarian and monk, Mike Hertsenstein, shook up the evangelical world this week with a lost passage from an infamous Nixon tape. "Bill Graham can be heard," he wrote, "defending anti-Jewish conspiracies and admitting Hitler was right about some things to President Richard Nixon on a newly-released portion of an infamous Oval Office tape. The long-censored passage of the 1972 conversation confirms certain comments reported hitherto only second-hand, and adds to the historical record shocking new words and beliefs of the evangelist, whose legacy had already been damaged by the earlier, redacted releases of the tape.

During “the Latter Days,” Graham is heard to say, Jews will be divided into the “Remnant of God’s People” and “the Synagogue of Satan.” The second group consists of those Jews in league with the devil, Graham says, who “have a strange brilliance about them” and are behind “all your religious deceptions.”

Nixon’s ranting against Jewish “domination” of media is by now old news, so also Graham’s fervent assent, and the evangelist’s already-disturbing contributions to this discussion. Graham has been long known to have warned Nixon to break the “stranglehold” of Jewish influence. But that comment takes on even darker tones in context with the new material, a bizarre speech that climaxes with references to Nazi Germany. “You see,” the evangelist explains to Nixon, summing up their exchange about Jewish influence, "Hitler of course… they had a stranglehold on Germany. On the banking of Germany, on everything in Germany. And the media. They have the whole thing, you see. But he went about it wrong…"

...Hearing America’s one-time beloved “pastor,” a regular atop “most-admired” lists, speak from beyond the grave of evil Jewish conspiracies also comes at a particularly fraught moment for such a revelation. The late evangelist’s traditional constituency has become associated with movements that threaten to mainstream once-repudiated prejudices against out-groups, including Jews. Even more critically, leadership for such radical views feature the current President of the United States and Billy Graham’s own evangelist son.

...Graham confessed "[the Jews] swarm around me and are friendly to me because they know that I’m friendly with Israel. But they don’t know how I really feel about what they are doing to this country. And I have no power, no way to handle them, but I would stand up if under proper circumstances."

This may be an inconvenient time for this to have come out in light of Congress accidentally having embroiled itself in a debate about taxing churches by having rushed through the Republican tax scam through both houses of Congress without anyone having had time to read it thoroughly. (And, of course, Trump can't read and just looks at pictures, but signed it anyway... with a clauses that taxes churches.)

First off, it's worth mention-- because the McClatchey report certainly doesn't-- that there are people who believe churches, especially churches that operate as businesses, should be taxed, just like any other business. But that isn't want the GOP stumbled into. Emma Dumain reported that the GOP tax scam "accidentally" included a 21% tax on the value of certain employee benefits and that Jim Clyburn (D-SC) is rallying Democrats around new legislation to repeal the provision.

e can’t do it without help from Republicans, and calling their tax bill the “GOP tax scam” isn’t going to win over lawmakers who are fiercely protective of this congressional session’s biggest legislative achievement.

“(Democrats and Republicans) are describing the problem in very different ways,” said Galen Carey, vice president of government relations for the National Association of Evangelicals. “One side is saying ‘this is an oversight,’ the other is calling it Republicans’ war on religion … overheated rhetoric probably won’t help us get a solution.”

Short of legislative action, a public relations nightmare could be awaiting lawmakers who voted for the tax bill back home.

“This is an issue that will not go away,” said Dan Busby, president of the Evangelical Council for Fiscal Accountability. “When you stir up 100,000 houses of worship, and then hundreds of thousands of nonprofits on top of that, you have a pretty mighty force that is going to get attention on this issue.”

Tucked away in the new tax law congressional Republicans passed late last year with no Democratic support is a provision slapping certain nonprofits and charities, including houses of worship, with a 21 percent tax on the value of some employee benefits.

The expectation is the tax would relate to parking spaces and public transit passes. But those affected by the provision are genuinely unsure what exactly would qualify as a taxable expense because they still haven’t received official guidance from the Treasury Department.

“Treasury is aware of the change... and we have been talking to the impacted constituencies about the concern,” said a Treasury spokesperson in a statement to McClatchy. “We are working to address the issue and provide clarity for taxpayers.”

The new tax on the value of employee benefits means that many institutions are going to have to prepare tax forms for the very first time-- a convoluted and potentially costly exercise.

“Most churches do not have the sophistication that’s necessary to deal with the tax code,” Clyburn told McClatchy. “Small churches that exist in communities I represent... don’t operate as businesses. They’ve never operated as businesses.” Churches also help pay for transportation expenses for employees who would might otherwise have a tough time paying for it themselves. If institutions had to pay a tax on providing these perks, they might rescind them, Clyburn suggested.

The new requirement was not discussed in the lead-up to passage of the “Tax Cuts and Jobs Act” and has since caught virtually everyone off guard, even members of Congress.

“Had we had hearings, I can assure you I would have been testifying or screaming,” said Rep. Emanuel Cleaver (D-MO) a United Methodist pastor.

Clyburn said he had only just learned about the provision from faith leaders in his district when he received a phone call from Rep. Mark Veasey( D-TX) who described being “accosted” by ministers at an event in his district.

Clyburn’s bill currently has 31 co-sponsors, including Cleaver and Veasey. All are Democrats and predominantly fellow members of the Congressional Black Caucus who tend to have strong ties to churches.

Referring to the Republican tax bill as the “GOP tax scam” in a press release announcing the introduction of his bill, Clyburn said he’d be glad to work with GOP lawmakers to repeal the 21 percent tax, but had not talked to any yet.

When asked how he might reconcile calling the tax bill a scam with his desire to work across the aisle, Clyburn chuckled.

“They know it’s a scam,” he said.

Republicans’ appetite to act seems tepid. As Republicans looked for ways to cut costs in their bill late last year, they decided to eliminate tax breaks for employers of for-profits who hand out perks to their employees. They decided to apply the same standard for nonprofits, too.

Legislative tax-writers were reluctant this week to pan the provision or suggest there could be adverse effects.

“People call it a tax on churches and charities. There is no tax on churches and charities,” said Rep. Tom Rice (R-SC). “What we’ve said is, ‘We’re trying to make things fair across the board. So organizations-- all organizations, for-profit, nonprofit, everybody that gives their employees free stuff, we’re trying to make it equal.’”

Rep. Carlos Curbelo (R-FL) was noncommittal, saying, “I do think it’s something that at the very least requires the committee’s consideration.”


...Though the Congressional Joint Committee on Taxation did not provide a revenue estimate for this provision, it calculated the cost of the policy as part of a larger estimate for the “repeal deduction for qualified transportation fringes, including commuting.” That came out to $17.7 billion over 10 years.

The Congressional Budget Office estimated in April the entire tax bill would cost $1.9 trillion over the time same frame.