Pastor/Priest Tax Free Housing Allowance Ruled Unconstitutional.

A Federal Court has ruled pastors/preists must pay taxes on money given them to offset their housing expenses.

Giving a pastor tax free income to obtain housing largely has replaced the older practice of providing a parsonage.  The parsonage model is not affected by this ruling as I understand it.

It is the tax free income that has been ruled unconstitutional.  The Freedom From Religion Foundation brought the challenge.

FFRF’s argument is that when pastors don’t pay taxes on this income, it means the rest of us have to pay more.  Singling out one class of people for benefits is a violation of our Constitution.

Each of us knows a small church that looks to be having trouble surviving.  What we probably did not know is it might already have closed were it not for Government subsidies.

The church building itself should be paying for local government fire and police protection, but usually is not.  It seems inevitable these property taxes will be the next item headed to court.

Using rough calculations, the tax subsidies for a small church with one pastor would be $10-$15,000 per year.  For a larger church it would be $50-$100,000 per year.

It is often said churches perform services the government would need to perform were they not doing it.  It would be much better, however, if they were simply paid when they do this, and, in turn paid their taxes.

Perhaps there is a church somewhere that looks at the Commandment, “Thou Shalt not Steal,” and wonders.

41 Responses

  1. I think your estimate of the tax subsidy is a bit on the high side. A small church would likely have a pastor with a package less than $50,000. If he or she is in the 25% bracket (maybe due to spouses earnings) you need the whole package to be housing allowance to get up to your numbers.

  2. Michael Ross

    “Singling out one class of people for benefits is a violation of our Constitution.”

    So screw everybody. That’s the liberal answer.

    1. Michael 3:12 “So screw everybody. That’s the liberal answer.”

      I’m not in favor of churches or ministers paying fewer taxes so that everyone else’s are higher.

      1. Michael Ross

        Oh heaven forbid that anybody should keep what is rightfully theirs.

        “It is often said churches perform services the government would need to perform were they not doing it. It would be much better, however, if they were simply paid when they do this, and, in turn paid their taxes. ”

        Yes, we must get the government involved in every facet of our lives. They know what’s best for us and they have our best interests at heart.
        That’s the “progressive” way.

        1. Wolfy32

          It’s the same government that you hold with such high disregard that is subsidizing your religion. If churches were taxed normally like everyone else and not given government subsidies, your precious church buildings would not be open….

          So which is it, the government is evil? Or it’s only 90% evil when it’s using it’s influence to subsidize the existence of churches?

          I’m really confused on what your suggesting? No taxes? Hmm. well there goes our roads and interstate? There goes medical and scientific research to improve our lives…. And food. well, we’d all be poisoned by corporate greed as food was no longer inspected and companies could put whatever they want in our foods…

          I’m not for government control, but, I fear the world in which you want to live… It would be utter chaos…

        2. noblindersonme

          please let’s have some ‘grown up’ debate here. Comments like ‘the progressive …(wants) government in EVERY facet of out lives etc…’ is highly disputable and frankly very insulting.
          No progresive I know wants that . and nothing is that black and white sir , why do you think framing an argument in such rigid terms will make your point? You, I doubt, want NO government in your life and you probably enjoy the many benefits thereof that ‘good’ government has blessed you with . Do you dispute that ? or is it easier to debate in the simplistic tea party vernacular so common today. This is the ‘twitter’ culture now , a culture that strives to make it’s point in the smallest time and space possible. No room for doubt right! good or bad ? It has to be expressed in the fewest words . Govt is bad . Liberals love government . Conservatives love freedom ! Yes!
          Well sorry Micheal ,I am old school. I still believe the smartest folks see the gray areas. and yes the bad ole govt does has it’s excesses but goodness don’t we want the ‘stuff’ ( as Carlin would say) that good government brings to us and frankly which most of us take for granted. ( how has that dept of Homeland Security been working out for you Mike? It seems we have been pretty safe the last 12 years, ‘getting involved in our personal lives ‘ sure didn’t hurt keeping the bad guys away?)
          The bugaboo about that kind of debate is defining ‘good government’ and how to implement it. And that is where democracy comes in . Remember Churchill’s comments about democracy being such a lousy form of government ! BUT remember all the rest being so much worse!
          That is what ‘progressives’ want Micheal! Grown up debate .

          1. noblindersonme

            If I twittered , maybe I could post that wanting good govt is like Golilocks ,oh this is too soft – oh this is too hard- oh this is just right ! Oh to the tea party everything is too hard!

      2. Wanna B Sure

        Jon: For many many years, most employees with health insurance provided by their employers was not deducted from their pay check, and was not a taxable event. In fact, it has been used as a negotiating tool in wage determination. (Give them as little as fifty dollar deductible annually, instead of a taxable cash raise. At the same time, self employed people paid their premiums with after tax dollars. In some group plans, the employee had to pay for family members, but not all. How was it with NDSU? Was your health package a non-taxable benefit? I don’t know, but it has been a standard practice, especially with labor unions and non union shops. More people have been covered in group plans than private individuals for years, and that inequity has been pretty much ignored. When one looks at the numbers of employees with employer paid health plans, vs. clergy, your concerns for fairness in today’s topic rings hollow. We have several churches in my city, and not one of the clergy owns their own house. They all live in parsonages. Another point to consider is that in the main, most pastors remain in a location for 7 to 10 years, then move to another congregation, making owning a house impractical. In fact, I believe it is best for both the pastor and the congregations to have a reasonable turnover from time to time. Change always presents opportunity for both. Where and who are these pastors that own their own house? Many pastors I have known at retirement were forced to buy their first house. Not the best time to do that. Hopefully they saved enough to do that, but I know some had to rely on family inheritance to pull it off. That being said, I do see abuse with many “glitter” preachers on TV, with planes, multiple “parsonages”, high end cars, etc., with some living in gated communities. Also with each of the family members getting paid unbelievable amounts. I need not mention names.

        1. Michael Ross

          Most pastors are servants to their congregations. Many are very intelligent and well educated and could do well in business and professions but have chosen a life of ministry because they feel called. Jon wants to believe they are all in it for the money. Like Benny Hinn , Joel Osteen, and other scammers that fly around the country in their own fleet of jets.

          1. Les Wilson

            Take a deep breath, Michael. Jon obviously supports the Constitutional separation of church and state, and thinks clergy shouldn’t be subsidized by taxpayers. Period. I agree with him.

          2. Michael 5:02 “..but have choses a life of ministry because they feel called.”

            It seems we are in need on econ. 101 here. Pastors are pastors because the chrurch collects money to pay them. (except where they are lay pastors) It’s a business deal. Were it not for the government subsidies, provided in the form of tax breaks, churches would have to pay more. Some could not do this so there would be fewer chruches and pastors. Please correct anything I have said here that is incorrect.

        2. Wanna 4:39 Yes, I received tax exempt medical benefits as a part of a salary package. In addition to that, my wife and I receive retirement contributions we did not pay tax on. They were then put into one of those programs that did not tax the interest until withdrawl. Now, as we are required to draw this money out, we are paying huge taxes, but not as much as we would have if the interest had been taxed during our careers.

          I don’t happen to agree with the kinds of programs we received huge benefits from. They muck up what should be a simple citizen duty, paying our taxes, and cause taxes on people who don’t get these deals to pay more.

          The point of my blog is that churches are small businesses. The tax system should not pick out one kind of business and treat it better than other businesses. A part of this has been corrected by taxes salary packages that include payments for housing. This has already been done for corporations that provide housing allowances. In the Fargo-Moorhead area, I’m not aware of any nonCathholic parsonages–there must be some, however.

          One generalization we can make about this country, we love beat government out of taxes. Every time Congress or state houses conviene, the agenda is filled with bills to beat the tax system. That is why it is a joke to tax about a “flat tax”. The theoretical idea is good, but out politics would start tinkering with it the day it was signed into law. The irony is probably most of us pay more taxes in the end because of all the money spent trying to avoid them.

          1. Wanna B Sure

            You may notice that I didn’t mention your tax deferred retirement plan, which included employer contributions, as in the end, the taxes will be paid, albeit commonly at a lesser rate due to lower income at retirement.
            If you are a purist egalitarian, you should volunteer to pay retroactively the “taxable” value of your group health at NDSU, )or anyone else for that matter). But you got yours at the expense of others, and in the end won’t. “It starts at home”.

          2. Wanna B Sure

            Jon: your “I’m not aware of any non-Catholic parsonages” Yikes! Get out of the beltway and into the real world.
            You may not have or do agree with the non taxable element of your health package, but I rather doubt you and yours protested on the steps of the administration building wanting to “pay your fair share”. Your fellow profs, and union members may have bent the spokes on your bicycle.

          3. Michael Ross

            “Yikes! Get out of the beltway and into the real world. ”

            Don’t be too hard on Jon, WBS. He is an elitist that has lived all his life in the academic world. He has a Phd in economics which means he has boatload of Keynesian brain washing. He wants churches that teach what he doesn’t believe taxed into oblivion while THEE “church” (public schools) that teaches what he does believe (evolution, gay lifestyles, revisionist history, welfare state and central planning etc., etc.) supported by stolen money (taxes). That’s what he has been taught since he was a child and is now a high priest of that religion.

          4. Michael 3:11 “That’s what he has been taught since he was a child and now is a high preist of that religion.”

            Michael, you are so much fun to have here, there should be a way to pay you.

          5. Wanna B Sure

            Jon: re. your 3:22. Evasion. See your 2:15, 3rd paragraph, last sentence. Regarding that which you are not aware of. You really do need to get out a little.

      3. Jinx

        Jon, same here, and its about time!! Now they can sue to get rid of the church’s tax exempt status, especially since they have become so political and tell people how to vote!

  3. Beau

    Obama left American Pastor Saed in his “parsonage” of an Iranian prison. He’s an American citizen being held simply for being a Christian. His release was not even a part of the recent negotiations with Iran. I think that speaks loud and clear of what our presidency feels about the Christian pastorate.

    1. Beau 6:28 “He’s an American citizen being being held simply for being a Christian.”

      I’ve never read up on that case, though I know it is covered every day at My impression was that he was preaching and converting and in that way breaking the law there. I don’t like laws like that, but there are countries with such laws. I think you will find a lot of openly Christian people there who are not in jail.

      1. Michael Ross

        “I think you will find a lot of openly Christian people there who are not in jail. ”

        I believe you are correct here, Jon. Our country has used the religious right to bad mouth Iran because they are looking for an excuse to start a war. Iran supposedly hates Jews but the country has a prosperous Jewish community. Iranian Jews were offered resettlement in Israel but refused. In fact they took offence at the offer. As far as Christian persecution I don’t know much about that case either but hope they let this pastor go. In Iraq under Saddam 800,000 Christians practiced their faith openly. As long as they didn’t speak against him he left them alone. Under our puppet regime many Christians have to hide their faith and many others have fled the country. I’m not saying either Iraq under Saddam or Iran are shinning light of freedom. They are not. Both have serious human rights violations. But we have and still do support much worse regimes.

  4. H.P.Drifter

    Jon and Entech

    Missed on being able to answer Entech’s post when he needed to catch the bus.

    Here in lies rub, when I followed the rabbit down the hole, it took me three decades to figure out how to turn around and dig myself out. Fair size brain, smaller body.

    What the rabbit didn’t count on was evolution and technology could jump in and out of the hole at will. That’s when the rabbit’s mysticism fell apart, invisible magic, invisible majesty, the emperor with no clothes and body came to light. The rabbit has been trying to cover his fanny ever sense.

    Had to take poo bear to the airport to visit the relatives, took me eight hours of driving (round trip) to get her to the air port In SF. She’s a panda.

    As far as housing crisis, equal protection under the law applies to everyone. Let the clergy stand in line and apply for subsidized housing like poor people everywhere. If they don’t meet the income standards.

    H.P. Drifter

    1. entech

      Yes my little chat with Michael was supposed to point out that most sources of information are bent at least a little in the direction of the writers beliefs. Ken Ham are not bent they are completely twisted so that everything points in the direction they want, reminding one of the Ouroboros except that rather than eating its own tale the tale is eating the head 😉 . Anything to try and put down evolution as a possibility seems to be very high on their list, anything that detracts from their being special creatures as a product of a special creation, and they say an atheist is arrogant 🙄 To be fair there are many in the science is everything camp that are almost as bad in their own way.

      The reason I threw in the quote from Dawkins was to point this potential bias out, something we need to look out for in everything we read (and write, no one is exempt, not even ourselves). Although Dawkins is at least an acknowledged expert in the field, and widely published (I am talking about technical stuff on biology and evolution, not his anti-religious books _ which I don’t think are very good) while Muggeridge is a media personality the only product he has is his opinion. So if you want to learn what is wrong with Christianity you go to “Atheists Anonymous” if you want to find out about evolution you go to “God did it all in six days six thousand years ago” and get your accurate unbiased “facts”.

      One thing I can never understand is that as they are always berating us for not believing that the Bible is true and accurate, not accepting that because there are so many old copies around the sheer number makes up for deficiency in content, and, then go quoting

  5. I would imagine that congregations could simply provide a house like they all used to do without the clergy member having to pay taxes on the benefit. I don’t feel sorry for the clergy. They are usually treated very well by the congregation to make up for their untraditional hours. One congregation I knew of would supply dessert for the pastor on a daily basis. The women of the church would take turns hauling over a pie or two when it was their turn. Where do I get a job like that? 🙂

        1. entech

          Perfect response sir. The quote attributed to the good lady is probably apocryphal as are all the quotes and stories the clergy spread around.

          1. H.P.Drifter


            It’s nice to have somebody around that can keep their sense of humor, when dealing with issues that deserve such serious study.

            Becoming a free thinker was no easy road for me.

            Though I had many advantages to do so, kind of like a tiger trying to shed his stripes or the leopard his spots, no easy way out.

            Humor on the other hand kept me with in a balanced position to make clear decisions. I never take myself too seriously, being too serious is bad for your health.

            I know I will not even come close to learning the true meaning of anything, though I have to say the Hunt is fun. And hunting with other hunters is fun as well. Every bit of truth I can dig out, is better than eating candy (I do like my chocolate and coffee)

            Where this will lead I have no clue, I do enjoy life as I know it. I don’t know if you know this web site or not, just Google, Atheist Experience. It’s a cable show out of Austin Texas, great bunch of young guys run the show. You can see episodes on You Tube. It will make you laugh, sometimes though it is sad, when a pastor calls in and tells them he is a closet Atheist and doesn’t know what to do. Educational and entertaining as well.


  6. H.P.Drifter

    Here we have a major crises brewing Pastors without Places. Pretty soon we will have these people wandering the countryside preaching the Gospel for food and shelter just like Jesus.

    I wonder what the modern day Pontius Pilate is going to do about this, since Christianity has spread, this could mean what? With all the great minds on this Blog nobody has come up with a way to keep these guys in the style they are accustomed too. At no cost to the tax payers (which are Christians getting taxed to death)

    Right Michael?

    1. Jinx

      H.P. , its seems to me, way back in catholic schools days, we did hear a little something about Jesus wanting no churches, land, wealth, etc. but desired to wander the earth as an itinerent ‘prophet’…… How refreshing if churches would revert to those early steps of Jesus and speak the humanist words of understnading and forgiveness he supposedly preached. I do believe there is evidence for a human Jesus and viewing him as a prophet/philospher but definitely not the deity he has been assigned nor the existence of a God that made it all. I love the Ghandi quote where he said he liked our Christ but the christians are so unlike our Christ….

      1. Wanna B Sure

        Re. Ghandi: If I remember right, he was involved heavily in the movement to remove British Colonialism, and the abuse of the citizens of India, by strict manipulation of industry, especially fabrics. As the British were considered to be a Christian nation, they were a poor example to Ghandi.

        1. entech

          The Romans brought Christianity to Britain in about 600 AD. In the 1930s when Ghandi was most active I think it is an understatement to say Britain was considered to be a Christian country:
          The state religion was the Christian Church of England.
          The head of the state was the King or Queen.
          The head of the church was the King or Queen.
          Bishops of the church had an automatic seat in parliament in the House of Lords.
          Religious instruction was part of the curriculum in all schools.
          The law of the land stated that permission from the Parish priest was required for a person to leave the parish on a Sunday.

          In spite of this Christianity Britain was grabbing colonies wherever it could get them, a joint effort by missionaries and private enterprise. The colonies, often called dominions in those days, perhaps as God gave man dominion over all the animals the Christian hierarchy in Britain thought they should have dominion over the world. India was run as a private trading company. Given this, and given that Ghandi would have been well aware of the history being a London Barrister at one time, it is not surprising that he was impressed by Christ but not by Christians.
          Heavily involved would be an understatement, leader of the move for independence would be a better description. The struggle for independence in India, while equally well justified, could be thought of as being on a higher plane than the American Independence fight, India wanted independence for its native inhabitants.
          Ghandi was fighting for a pluralistic independent India where Hindu. Muslim, Christian and Jew were all equal partners in a free country. Unfortunately while he was sick one of the monotheisms, with that strange arrogance that seems to go with it, the one God made one people his loyal subjects and told them that they must be uniquely his and convert everyone else, made demands of their own resulting in the partition into India and Pakistan.

          1. Jinx

            Great summary entech! Just wanted to point out the brutality and incompetence of British military command and the installed “Governors” of occupied lands is legendary.

  7. Maybe we could axe the tax preferences on contributions to, for example, Harvard’s $30 billion endowment at the same time we do it for religious institutions. How’s that for a compromise?

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