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Lawmaker tries to preserve clergy housing tax break
The Sacramento Bee ^ | March 30, 2000 | Kevin Diaz

Posted on 03/30/2002 11:13:32 AM PST by kritikos

Edited on 04/12/2004 5:34:02 PM PDT by Jim Robinson. [history]

WASHINGTON -- With a California court seemingly poised to strike down a longtime housing tax break for ministers, Rep. Jim Ramstad, R-Minn., is preparing legislation to clarify the provision and "prevent America's clergy from facing a devastating tax increase."

In a case that could have financial repercussions for every church, synagogue and mosque in the nation, the 9th U.S. Circuit Court of Appeals in San Francisco announced earlier this month that it is reviewing the constitutionality of the so-called "parsonage" tax exemption.


(Excerpt) Read more at sacbee.com ...


TOPICS: News/Current Events
KEYWORDS: clergytax; housingallowance; taxexemption
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Is it just me...is it just coincidental...or does it appear to anyone else that the gloves have been pulled off and that it is open season on the "Christian church"?
1 posted on 03/30/2002 11:13:32 AM PST by kritikos
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To: kritikos
Are Islamic mullahs getting a U.S. tax break?
2 posted on 03/30/2002 11:51:10 AM PST by thinktwice
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To: kritikos
Ask a rabbi.
3 posted on 03/30/2002 12:06:26 PM PST by gcruse
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To: thinktwice
Clergy is clergy in the eyes of IRS.
4 posted on 03/30/2002 12:10:05 PM PST by kritikos
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To: kritikos
The 9th circuit court stated:

"If ... Rev. Warren is not entitled to any tax deduction at all, because such a deduction would violate the First Amendment (separation of church and state),"

The First Amendment states:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof;

If the tax deduction violates the First Amendment "establishment" clause, then any tax at all on a religion is unconstitutional because it violates the First Amendment "free exercise thereof" clause.

I say bring it on. Then the churches would not be so "scared" of losing their tax deductions (prohibiting the free exercise thereof) if the pastor's of those churches lace their sermons with political speech, such as whom and who their congregation should vote for.

5 posted on 03/30/2002 12:11:42 PM PST by tahiti
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To: kritikos
This provision has been a totally unjustified tax shelter. It has no valid purpose and should be struck down without further delay.

It has nothing to do with the Freedom of Religion. It is just a way for preachers to hide some of their income, at the expense of honest hard-working taxpayers.

6 posted on 03/30/2002 12:16:04 PM PST by hinckley buzzard
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To: kritikos
Last year the National Education Association took in over $242 million and paid not a dime of income tax. The NEA headquarters in DC is assesed at over $70 million but is exempt from property tax.
7 posted on 03/30/2002 12:22:15 PM PST by LarryLied
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To: tahiti
But what happens to the tens of thousands of ministers who are working with small congregations too poor to pay a livable salary? The loss to the ministers and their congregations would be tremendous. This deduction has allowed churches to exist that would not otherwise exist.
8 posted on 03/30/2002 12:22:25 PM PST by kritikos
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To: kritikos
Government tax exemptions always come with strings attached. The Nazi's were successfull because the German government paid the clergy salaries. As a result, the clergy (with exceptions) remained silent. Churches should reject the tax exemptions, and begin to speak freely.
9 posted on 03/30/2002 12:25:54 PM PST by aimhigh
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To: hinckley buzzard
How are you paying more taxes because someone else gets a break? This is not logical.

The problem is not that someone gets a break...the problem is that politicians are so tax hungry.

10 posted on 03/30/2002 12:26:27 PM PST by kritikos
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To: hinckley buzzard
This provision has been a totally unjustified tax shelter. It has no valid purpose and should be struck down without further delay.

I suppose if one subscribed to the marxian view that all labor and all property is the property of the state one would see it that way. The rest of us believe not being taxed on something is not a "tax shelter" and one does not have to show a "valid purpose" in order not to be taxed on something.

11 posted on 03/30/2002 12:27:08 PM PST by LarryLied
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To: aimhigh
I believe better that... Churches should speak freely. Then if the government takes away the exemptions...so be it!
12 posted on 03/30/2002 12:30:17 PM PST by kritikos
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To: hinckley buzzard
As a Catholic, I think that the exemptions are justified only if the pastor does not use the office as a money-making scheme for their personal financial gain. Abuses of the exemtion, such as Warren's, are disgusting to me, who's priests live in congregation-purchased houses.
Of course, I also oppose property taxes.
13 posted on 03/30/2002 12:34:31 PM PST by Maccabee
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To: Maccabee
Abuses of the exemtion [sic], such as Warren's, are disgusting to me

I suppose Rick Warren should live in a one room shack while the majority of his congregants live in homes that average well over $300,000.

Or is it that you just wish everyone better off than you to be poor?

Actually Warren lives not off his salary (which essentially only covers the cost of his mortgage and upkeep of his home) but rather lives off the income of his book sales--which is taxed to the fullest extent ot the law.

14 posted on 03/30/2002 12:42:16 PM PST by kritikos
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To: kritikos
How are you paying more taxes because someone else gets a break? This is not logical.

Not logical?  Suppose no one paid taxes but you.  Would
supporting a trillion dollar budget be beyond you current
income?  Wake up.

15 posted on 03/30/2002 12:54:56 PM PST by gcruse
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To: gcruse
Suppose no one paid taxes but you.  Would supporting a trillion dollar budget be beyond you current income?  Wake up.

No, you wake up. Where is it written in stone that taxes have to be so high?

Like I said, the problem is not the exemption...the problem is tax-hungry politicians. (And perhaps the pork-loving people who elect them.)

16 posted on 03/30/2002 1:03:42 PM PST by kritikos
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To: kritikos
Interesting point. I understand that the parsonage exemption is declared by the pastor. Up to 80% of their salary can be exempted as a pasonage subsidy.

A couple things jump out at me.

The IRS did not object to his exemption, but only the amount of the exemption. Without knowing his church salary, we don't know anymore about their reasoning, except that their deduction exceeded fair market rental value.

In a state like CA, a $360,000 home might not be such a big deal. Was it worth $360,000 when he bought it? yes. What is its value today? Has he added improvements to the home to bring its value up? In a small town in Nebraska, $360,000 would be a mansion. In parts of CA, it might be a modest ranch style home.

Like many ministers of large congregations, this minister has outside income that is fully taxed. I understand that Bishop T. D. Jakes draws no salary from The Potters House church, but rather earns a good living from his writings.

No matter your opinion on religion, there is no doubt that our freedoms are being eroded by gov't in all its forms.

17 posted on 03/30/2002 1:16:19 PM PST by texas booster
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To: kritikos
                    Like I said, the problem is not the exemption...the problem is
                    tax-hungry politicians.

                      No, what you said was this:

                    How are you paying more taxes because someone else gets a break?
                    This is not logical.
 
                   Just as shoplifters drive up the cost of items for
                   nonthieves, people with tax exemptions mean
                   the taxes of others go up.  That is logic.

18 posted on 03/30/2002 1:16:38 PM PST by gcruse
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To: hinckley buzzard
Kritikos, let's take your logic one step further from the tax exemptions for housing allowances for the clergy. What about the tax exemption for the interest on the mortgage for a person's house? Renters do not get to deduct any of their monthly rent. How about if we all give up the home mortgage interest deduction so that the clergy can have their housing deduction? If the federal revenue vacumn machine (IRS) must have a new dollar for every old dollar that it gives up, then maybe we should all just belly up to the bar.

You see, the church can own the parsonage and thus provide the minister a place to live at no cost to the minister. However, the church then has to buy the parsonage, pay the maintenance, purchase insurance, etc. All of these expenses would be non-taxable by the IRS. So what is the big deal when the minister buys his own place and then gets a tax deduction for doing so. The big advantage to the minister is that his house is hopefully appreciating along with the others, and when he/she retires they will have a place to live. If you always live in a "company house" so to speak, you never acquire a place of your own. Then to, the minister gets to acquire a house that meets his/her needs instead of living in a parsonage that may or may not be suitable.

19 posted on 03/30/2002 1:24:57 PM PST by Saltmeat
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To: texas booster
The IRS is claiming that the value of Warren's home should be based only on the fair rental value of that tax year rather than the value based on actual expense. The difference between fair rental value and actual expense is what the IRS sued Warren for. The opinion of the Tax Court was that exempt valuation is not tied to fair rental value. I.e., Warren won (that round).

The appeal by the IRS before the 9th Circuit precipitated the current article. The question brought up by the 9th Circuit Court on March 5th is: Is this deduction even constitutional?

20 posted on 03/30/2002 1:31:59 PM PST by kritikos
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