Exempting the Churches / An Argument for the Abolition of This Unjust and Unconstitutional Practice

by James F. Morton

A CHURCH MASKS A SALOON.

Of the many queer things that can be done by virtue of tax exemption laws, a recent episode in New York city furnishes an apt illustration. A saloon keeper had for some time a monopoly of trade in one of the less settled but growing districts. With the opening of a new boulevard, houses began to go up; and a rival was not slow in taking advantage of the opportunity to set up in opposition to the first comer. The newcomer was an energetic business man, and knew how to draw custom, so that he at once made considerable inroads on the patronage of his older competitor. The latter, however, was a man of resources. Among the few lots of land not yet occupied for building purposes was one in the neighborhood of the second saloon. This was quietly purchased by the older saloonist, and the other awaited results, expecting to see a third saloon established with a view to stealing some of his trade. His wily rival, however, knew a trick worth two of that. Almost over night, a rude shack was erected, with a slight steeple which pointed heavenward, though not with what usually pass for heavenly aims. This was turned over free of charge to a handful of persons, to hold meetings of a nominally religious nature. Having no taxes to pay on property thus dedicated to holy uses, and being thus able to hold it indefinitely at practically no expense, the original saloon keeper straightway appealed to the police department to enforce the law forbidding the existence of a saloon within a certain distance of a church, and thus, at the latest report, was on the eve of triumphantly driving his rival from the field. The next move would naturally be to purchase the abandoned saloon at a low figure, allow the "church," having served its purpose, to give up the ghost in an unobtrusive manner, and to resume business with the second saloon, where the discomfited competitor had been compelled to leave it off. Whether the ingenious scheme worked out to the finish or not, the writer is not informed. At least, it went far enough to demonstrate the remarkable possibilities under legislation encouraging the juggling with religious things for purposes of private advantage.

ANOTHER VULNERABLE DEFENSE.

The apologists for church exemption find themselves in a position of great embarrassment when the nature and amount of the exempted property are called into question. In the difficulty of securing accurate and complete figures they attempt at once to minimize and to magnify the amount involved. In pleading for the country churches, they raise the cry of poverty, and solemnly aver that these feeble institutions are so dependent on state help for their existence that without it they must inevitably perish. The claim is both false and irrelevant. It is false, because the taxable property of the country churches, as may be readily seen from the preceding discussion, and may be learned by any person through direct observation, is of extremely low value, and bears far less proportion to the available income of their aggregate membership than the holdings of the city churches. The few dollars of taxes which an honest fiscal policy would impose on the average country church would be raised without the slightest difficulty. As a matter of fact, it is not the "poor and struggling country churches" which are lobbying against the removal of exemption; it is the wealthy city corporations, which use the "poor country church" argument as a means of drawing a red herring across the track, and diverting attention from their own handsome pickings. The claim, even if true, would obviously be irrelevant, since it is not the business of the state to keep churches alive.

Forgetful of their professed fear on behalf of the struggling country churches, however, the apologists for religious graft lay tremendous stress on the assertion that the amount which the state loses through the churches is a mere bagatelle, and that the taxpayers would not gain enough to help them much, if it were reclaimed. A pat retort, of course, is that if this be the case, it is amazing that the churches have become so terrified at the idea of handing over so small an amount to the state. Wealthy as they are, if the sum is as trivial as they say, they will never miss it, and can afford to be honest, and to conciliate the favor of those who are now driven away from the gospel by the greed and grafting spirit of the agencies which represent it. Like the fiction of the dying country churches, however, the claim is both false and irrelevant. It is false, as will presently be shown by some of the figures which have become available; and it is irrelevant, because the moral character of a thief is not to be graded according to the amount of loot which he has succeeded in acquiring. The recognition of the right of the church to receive a subsidy from the state, and thus to make the separation of church and state a dead letter, would remain as serious a crime against the democratic principle, if not more than a single dollar were involved.

NEW YORK'S BLANKET EXEMPTION LAW.

Before taking up the subject of statistics, it will not be amiss to quote the exemption law of New York as typical of church graft at its worst. It will be seen that references to religious uses and purposes are ingeniously smuggled in, side by side with much verbiage as to institutions serving a public purpose, so that they may appear to fit naturally among such bodies as so minister to the collective needs of the community that they deserve to be subsidized by the state. For this reason, it is best to cite the germane portions of the statute in full, instead of isolating those that relate solely to the churches. Incidentally, it will be noted that the churches are not once mentioned by name. It is the nature of graft to seek shelter under evasion, and to avoid clear expression of its intentions. The following, then, is drawn from Section 4, subdivision 7, of the Tax Law of New York:

"The real property of a corporation or association organized exclusively for the moral or mental improvement of men or women, or for religious, bible, tract, charitable, benevolent, missionary, hospital, infirmary, educational, scientific, literary, library, patriotic, historical or cemetery purposes... and the personal property of any such corporation shall be exempt from taxation. But no such corporation shall be entitled to any such exemption, if any member or employee thereof shall receive or may be lawfully entitled to receive any pecuniary profit from the operations thereof except reasonable compensation for services in effecting one or more of such purposes, or as proper beneficiaries of its strictly charitable purposes; or if the organization thereof, for any of such avowed purposes, be a guise or pretence for profit... or if it be not in good faith organized or conducted exclusively for one or more of such purposes. The real property of any such corporation or association entitled to such exemption held by it exclusively for one or more of such purposes, and from which no rents, profits or income are derived, shall be so exempt, although not in actual use therefor by reason of the absence of suitable buildings or improvements thereon, if the construction of such buildings is in progress, or is in good faith contemplated by such corporation or association.... Property held by any officer of a religious denomination shall be entitled to the same exemption, subject to the same conditions and exceptions, as property held by a religious corporation."

In the comprehensive list of exempted classes of property enumerated above, it will be observed that all save those of a religious nature have at least some show of claim to be regarded as ministering to public aims, or as essential to the existence of a civilized community, and therefore deserving of public encouragement. Whether the claim is in all cases sufficient to warrant exemption from taxation, need not be here discussed. In the opinion of many students of the problem, nearly all exemptions are illicit. Whether that be the case or not, it has been made clear that the argument for taxing churches is stronger than that for taxing any of the other classes, and the argument against it weaker. This results from the fact that religion is more distinctly a matter of the individual than is literature, science, education or philanthropy. Hence, even if it be good public policy to subsidize these agents of social progress, it by no means follows that the same is true of the churches; while, conversely, the taxation of churches need not logically embrace the taxation of any of the other classes. Each must stand on its own merits; and in each case enter considerations that make it improper to draw the fate of any one of them into that of any other. That a mischievous and loosely drawn statute has bracketed them all together should not blind us to the radical differences that exist among them, or to the fact that none of the grounds on which exemption of most of the others is defended apply in any degree to the churches.

LAND SPECULATION INVITED.