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When the tax code is written so some income is not taxed, you are creating a subsidy.  Oil money is subsidized in the hopes it will reduce the cost of oil production (whether this works is debatable, and I am not the person to ask on this).  Some of the income isn't taxed, and the amount of money you forego bringing in as a tax is the cost of the subsidy.

Subsidies aren't necessarily a bad thing.  They can be used to encourage things in the economy that everyone wants.  One way to encourage green energy growth is to provide the industry with lucrative subsidies until they can be more profitable and mainstream.  When people have a child, they get a break on taxes to make it easier to raise their young.

This is basic language for what a subsidy is, but I just want to make this clear.  Subsidies exist for all sorts of things, good and bad.  The consequence of subsidies is that they lower the tax revenue, and so, we have a national interest in ensuring that our subsidies go towards things which are in the national interest, and efficient (since we'll receive less revenue to spend on other things).

But there's one thing that is subsidized that is an absolute disgrace.  Hate speech is subsidized.

Hate speech.  Subsidized by the taxpayer.  Subsidized by you.

Let me explain.  Religious institutions are not taxed.  In fact, if one gives to a religious organization, one is entitled to a tax exemption.  This allows people to redirect some of their money away from the government revenue pools to religious groups.  Sometimes, religious groups respond to this endorsement by providing charity and positive social work for society.  The whole point of redirecting money to such groups is that they (theoretically) serve the public good the government would otherwise have to provide, but do so under private management.

Often they do not.  There are many religious groups posing as charitable organizations.  Hate groups recognized by the Southern Poverty Law Center are given money tax free, and when they are, it means their political activity, their hate, their damage is being endorsed by the US government.

The American Family Association received nearly $18 million in 2010.  Apparently, they are also listed in the Combined Federal Campaign.  What a hate group is doing in a government charity sponsorship program, well, that's the whole point of this diary.  Also, as the AFA will tell you, their religion justifies bullying.

The Family Research Council received about $12 million dollars in 2010 to fund their campaign of hate against gays, transgendered people, and the children of gay parents.  Like all other hate groups, they repeatedly engage in clearly defined hateful behavior.

These two groups, alone, got $30 million dollars tax free in 2010.  Subsidized hate speech.  Not only this, there are other 'charity' groups with an interest in undermining church-state separation.  There are religious groups which think that their political speech deserves to be subsidized by the US government and have no shame endorsing political candidates.  They also want to make schools a battleground for religious warfare (this link is worth a watch, if you have a spare hour, and I plan to expand on its contents in a later diary).

Politics is the name for how we interact with one another in large groups.  When someone speaks about society and community, it is a political speech.  Unfortunately, the religious right understands this and is using their 'freedom of religion' as an excuse to become more and more blatant in their political activity, endorsing candidates or as reported earlier, threatening people inclined to vote a certain way.  Many of the mega-rich religious leaders are theocrats who wish to legislate their political agendas, while growing their wealth and power behind a claim to religious freedom.  Oh, and many of them (and their children) take advantage of something called the parsonage exemption on their real estate, another topic worth its own diary, all on its own (any takers?  To entice you, Mitt Romney has probably benefited from this immensely).

Leave the charitable exemptions to those groups which actually perform services which benefit the community at large, and can demonstrate their tax-exempt funding serves the public interest, not endorses hate speech in politics.  I would propose to treat religions like a business, and tax them like a business.  But just like a business, leave the tax deductions to those groups which actually promote the public welfare.  Everyone pays taxes in the interest of the public good, but one thing that should not be promoted by our tax laws is hate.

Charities don't undermine the social contract.  Charities don't persecute minorities, spread lies and endorse specific political candidates or parties.  Charities don't divide communities and encourage divisiveness and hatred of their neighbors.  Charities don't spread anti-science mythology.  Charities help people.  And that's not an abstract thing.  That's an easily demonstrable thing.  Let's leave charity tax exemption to the organizations who actually provide charity.

P.S.  To those who may have issues with taxing churches, I understand that it is not necessarily the best solution.  But charities which do work for the public good that are not associated with religion have reporting requirements that religious institutions do not.  This is discriminatory to non-religious groups which aspire to do the same positive social work that many churches do.  Beyond that, churches which perform public services should be entitled to tax breaks that their non-religious counterparts receive as well.  I hope this clarifies why I advocate for this particular solution, but as always, the community exists so we can hopefully find the most equitable solution to this problem.

My main concern is that I want to convince you that hate groups benefit from a tax subsidy.  How this is solved is relatively unimportant.  But it won't ever be addressed if nobody is seriously talking or thinking about it.  Until then, let's consider ending the hate subsidy.

Originally posted to Paul Rogers on Mon Nov 26, 2012 at 02:50 PM PST.

Also republished by Community Spotlight.

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Comment Preferences

  •  If organizations like the FRC (9+ / 0-)

    no longer would qualify as 501(c)3's, I don't see how organizations like the ACLU Foundation or People for the American Way Foundation would qualify either. In practical terms, it is very hard to come up with an objective definition of "doing good", which is why the definition of foundations is so expansive (though they are prohibited from doing much related to lobbying or electioneering). It sounds like a great idea, to stop subsidizing people like the FRC, but coming up with suitable language, that would seem fair to all sides, is the challenge.

  •  asdf (12+ / 0-)
    The whole point of redirecting money to such groups is that they (theoretically) serve the public good the government would otherwise have to provide, but do so under private management.
    Not really. The original decision to provide tax exemptions for religion=us organizations was based on the concept of separation of church and state. "The power to tax is the power to destroy", hence those entities are not taxed.

    The Bush - Clinton - Obama succession of Presidents set out to blur the lines between church and state by further directly subsidizing church activities. In order to justify this blatant violation of the establishment clause they pretended that money wasn't fungible, that the purpose of funding these organizations was to provide for charitable work and to pretend that they were somehow specially qualified to perform such work. It was only then that the myth that these entities do good for which government would otherwise be responsible, a baseless hypothesis which preseumes that they and only they are charitable and capabl;e of charitable behavior, which is given the lie every time somebody not in the clergy hands a panhandler a dime.

    That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

    by enhydra lutris on Mon Nov 26, 2012 at 04:06:10 PM PST

    •  I think there is a case (4+ / 0-)

      (I want to say California Franchise Tax Board v. Cmr but I need to look) that stands for the proposition that the tax exemption for churches is not required by the First Amendment ( the Bob Jones case above also says about the same thing).  This is really important because if, as the Puplit Freedom day people want, the genesis of the tax exemption ( no pun intended) is in the First Amendment, then the other strings on tax exemption that are imposed by statute (such as the private inurement prohibition and the limits on political activity and lobbying) would not be applicable to churches.  I think the IRS has resisted this interpretation and won to date, although the Religious Right is looking for a test case.

      •  I wasn't trying to imply that the first (0+ / 0-)

        amendment required the tax exemption, but only that those drafting the tax code desired, rightly or wrongly, to protect religion and churches from the potentially destructive power of taxation. It was not a quid pro quo for any good that they allegedly do, for, unlike most exempt orgs, they are not required to do any

        That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

        by enhydra lutris on Mon Nov 26, 2012 at 08:54:29 PM PST

        [ Parent ]

    •  the power to tax (4+ / 0-)

      is the power to tax. The absolute definition of secularism would be that any religious institution is a non-profit, and would be taxed accordingly. The religious test would be that no specific non-profit could be given special tax exemptions that others do not.

      A hate group can be non-profit. I do not have a problem with that, as long as they follow the tax laws as they are written. Religious exemptions need not apply, as they should not actually exist. They have the freedom to speak as they will, as much as I disagree with the message.

      What we are really talking about here is the FTC, and FTC rules, and their disturbing lack of teeth in enforcement, and disturbing lack of action in even putting forth any sorts of rules. The FTC really should not be using IRS categories to figure out which set of rules to apply, it should be using its own definitions of what is political and what is not, what is partisan and what is not, and so forth, and it really should be setting real consequences for those that violate the rules it sets. This is not being done, and is unlikely to happen without legislation... and a new supreme court.

  •  The Public Policy Exception (6+ / 0-)

    A prohibition against exemption for racially discriminatory policies, even in a religious context, exists already.  See the Bob Jones University Case:

    Opinion:  

    http://www.law.cornell.edu/...

    Concur:

    http://www.law.cornell.edu/...

    The exception is VERY narrowly applied - only really to racial discrimination at this point.  The Court goes through great pains to determine that really there is no disagreement as a matter of public policy about racial discrimination.

    As much as we may wish to believe to the contrary, the level of uniformity of opinion with regard to other issues (climate change, gay rights) does not quite give rise to a public policy exception as a legal matter.  Moreover, as others rightfully point out, the dangers of having the IRS endorse some points of view but not others is extraordinarily disturbing.

    See also National Alliance v. Commissioner (denial of exemption for a white supremecy group)

    http://openjurist.org/...

  •  No special treatment allowed (4+ / 0-)
    Recommended by:
    phonegery, Paul Rogers, caul, wbr

    Religious institutions do not deserve special treatment in the tax law, as in any other law. Non-profits are non-profits as far as taxes are concerned. It gets extremely confusing when you consider the intersection of campaign finance laws with taxation.

    Here's an interesting thought. There's a big deal made on the right when union dues are used for political purposes, and a big push to stop that. On the other side, we put money in the collection plate every Sunday at church, that money also to some extent goes to political purposes (depending on which church), yet no one says a thing.

    Either both are allowed, or neither, but the confusion between tax-exemption and political activity needs to be clarified whether religious in origin or not.

    •  Different tax exemptions (3+ / 0-)
      Recommended by:
      madhaus, Paul Rogers, caul

      Under current law, unions are exempt under Section 501(c)(5), which exempts  "labor, agricultural, or horticultural organizations."   That is entirety of Section 501(c)(5); there are some requirements imposed by regulation but that's the whole statute.

      Churches are exempt under Section 501(c)(3).  Section 501(c)(3) has many requirements, including that an organization exempt under this section cannot "participate in, or interven in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for political office."

      Thus the statutory language of c3 limits "political" activity, which is narrowly defined for this purpose as election activities (contrary to the diarist's definition, which is NOT the tax definition of political in this context) but the statutory language of c5 does not contain this limitation.  Of course, contributions to unions do not give rise to a charitable contribution income tax deduction.

  •  I've worked for a few 501(c)3 organizations (5+ / 0-)

    and you have no idea how much work is involved in annual reporting justifying our continued status (they all involved popular arts organizations).

    It seems very simple to me. If a group is considered a hate group by the SPLC and/or an independent group, then they it not be tax exempt.

    Excellent diary.

    It's not just a zip code, it's an attitude.

    by sboucher on Mon Nov 26, 2012 at 06:24:09 PM PST

    •  A suggestion for your particular background. (3+ / 0-)

      I've read about how certain reporting requirements for groups can be waived if the group claims a religious basis for their organizations.  But all I know about it is that it exists, I do not know the extent of the material at the moment.

      Since you have experience in this (and if you were inclined), I'd suggest you write a diary talking about the difference in reporting between a non-profit group and a non-profit religious group.  Like telling us about the reporting requirements you are familiar with and which ones you get to waive.

      That way we can see who is impacted by burdensome 'overregulation' and who gets an unfair advantage.

      •  Religious paperwork (1+ / 0-)
        Recommended by:
        Paul Rogers

        Churches (not all religious organizations) are not required to file Form 1023 to obtain recognition of their tax exempt status under Section 501(c)(3).   See Section 508(c)(1)(A). Many do so that they have a determination letter in hand for purposes of donor contributions, but it isn't required.   Many are also included in the group ruling of the parent church.

        Section 6033 exempts churches, their integrated auxiliaries or a convention or association of churches, or the exclusively religious activities of a religious order, from filing the annual information return (Form 990.)  In order to be an integrated auxiliary, you must be funded internally (that is, you can't get fees from the public for goods and services, like a hospital, child care center, retirement home, or school).

        Finally, there are special church tax audit procedures found in Section 7611.

    •  But what's an "independent group"? (1+ / 0-)
      Recommended by:
      sboucher

      I mean, by that token, Republicans can just form their own "independent group" and label all gay-rights and pro-choice organizations as hate groups.  To make something like this work, we need actual criteria that goes beyond what some third-party thinks a hate group is.  

  •  Government involvement is always messy (0+ / 0-)

    Anytime the government gets involved, things can get messy.  Allowing tax deductions is no exception.  In many ways it would be simpler to get rid of all tax exemption statuses so that we don't have to sort out the "good" vs the "bad" charities and churches.

    Our Dime: Understanding the Federal Budget

    by Dustin Mineau on Tue Nov 27, 2012 at 07:21:49 AM PST

  •  Why should be speech of any kind... (1+ / 0-)
    Recommended by:
    Remembering Jello

    ...be taxed?  That's not a good frame at all.

    If you want to remove tax exemption from all non-profits, or prevent them from engaging in policy advocacy, that's fine.

    I'm just not cool with only doing it for people who's political views I happen to disagree with.

  •  The hate crime is the crime (0+ / 0-)

    sorry - not very knowledgeable on the laws, but what is wrong with legislating against hate crimes and giving them teeth? I don't have much time for religion personally, but I only object when they do something hurtful. Which plenty of them do, hence my distrust.

    And the charges can escalate for repeat offences, apply to organisations that give shelter to haters or promote hate.

    Whatever you do, you need a definition of hate here. What more is necessary?

    As for tax status I would remove religion from the statutes simply because of the goal of separation of church and state. As soon as the word religion enters the statutes you have destroyed that separation.

  •  Your school link (to Youtube) is disabled (1+ / 0-)
    Recommended by:
    Paul Rogers

    Anyplace else we can watch this?

    Where ignorance is our master, there is no possibility of real peace. - Dalai Lama

    by kimoconnor on Tue Nov 27, 2012 at 12:00:21 PM PST

  •  I'm pessimistic. Other tax-exempt entities (1+ / 0-)
    Recommended by:
    Paul Rogers

    like for instance environmental groups, would by the standards of millions fall afoul of criteria like this one:

    Charities don't undermine the social contract.  Charities don't persecute minorities, spread lies and endorse specific political candidates or parties.  Charities don't divide communities and encourage divisiveness and hatred of their neighbors.
    Now the League of Conservation Voters, to which I contribute,  isn't what I would normally call a "charity", but it is decidedly a tax-exempt non-profit that carries out issues advocacy.  It may carefully refrain from candidate endorsements, but its leanings would be no mystery.  If you disagree with its perspective, you would be likely to perceive it as divisive.  And perhaps, to a subset of people with livelihoods in extractive industries, it might be actively harmful in the short term.

    So I think the tax-exempt status for organizations engaged in issues advocacy must remain content-neutral.  You can't have "useful advocacy" and "harmful advocacy" because there can never be consensus on those characterizations.  You have to give all advocacy groups equal standing.    

    Of course religious groups are exempted under a slightly different clause of the tax code than the one governing other non-profits.  But the principles are quite similar.  My assessment is that sauce for the non-profit goose must be the same as sauce for the religious gander.

    "The extinction of the human race will come from its inability to EMOTIONALLY comprehend the exponential function." -- Edward Teller

    by lgmcp on Tue Nov 27, 2012 at 02:16:37 PM PST

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