Tuesday, February 19, 2013

Should the church pay tax?

A lack of knowledge has never stopped me from sharing my opinion.

Last night a TV program did a story on Hillsong and the church, or any large church, not paying taxes (you can watch it at http://aca.ninemsn.com.au/article.aspx?id=8612601 and a reply letter to an earlier story from Hillsong here).

About this topic I'm fairly ignorant and much smarter people than I have written plenty about this before.

So, from my position of unawareness...
and open to the accusation of hypocrisy since a portion of my salary has been tax free...
and since no one asked my opinion...

Here are my Ramblings on the subject.

Do I think churches should pay taxes? I believe they should... BUT

I understand the arguments for the church not doing so.

It is reasoned that many churches would go broke if they had to pay taxes and the services they provide would be seriously slashed.

And that point is, largely, tough to refute. I know plenty of churches who are struggling financially.

And here is where my BUT comes into the equation.

I think churches should have to pay taxes once they have a working budget of, say (and I'm just plucking this figure out of the air), half a million dollars (this would certainly eliminate the small struggling churches).

For here is where the Hillsong story makes people's blood boil since they make a heap of cash from multiple revenue streams.

BUT... What if the amount a church had coming into it's coffers affected the amount of tax it coughed up, just like personal income?

From my limited understanding I would like to see incoming donations, like offerings, and any outgoing revenue used for services to the community, like a soup kitchen or op shop, remain tax exempt.

From what I can grasp, this is what the law permits and was implemented to protect. Charitable acts and services are tax free.

But I have a problem, despite what it might do to the bottom line of churches, with churches getting money from rental, conferences, book, television, DVD or music sales and have that remain tax exempt.

I might be off base, and I have been before, but somehow it doesn't feel 100% kosher...


Tom French said...

I think that the tax-free thing for churches is also that they facilitate a huge volunteer base working in the community, which saves the government money.

Churches, as you know, run kids ministry, youth ministry, play groups, meals services, visits to elderly and much more. At my last church they spent $500 a year on youth ministry, which would probably be tax-free as youth stuff should fall under community services.

But when you have 10 leaders working 4 hours a week minimum, 40 weeks of the year, at $20 an hour, that's $32,000 a year. So that's one low-paid government employee we're saving from having to spend taxes on.

Add that up across just one church and that's a lot of money that the government doesn't have to be spending on services.

Hillsong do plenty of volunteering and community services. In that ACA story the figures reported show they're giving away over 10% of what they're bringing in, and they are facilitating huge amounts of community engagement. And we have no idea how much money is being spent on internal-church programs which would be considered community services anyway.

Anyway, I'm not saying churches shouldn't be taxed, but there's more to the issue than just what gets actually spent on social services.

Graham said...


You make a good point about the volunteer hours (and wages) which the church saves the community.

In the utopia like world I wrote about they would all be included in the "service" aspect of my post (how this would all be worked out is WAYYY beyond my tiny finite mind).

And when it comes to the ACA story there is a lot left unsaid, including the massive amount of things Hillsong and their people provide for the community.

But the thing which especially caught my attention, and I imagine a lot of other people, was the proceeds from their records. I'm not convinced, on something of that commercial nature, we shouldn't pay our way.

But you make a good point and, probably, it’s part of the reason why the whole church & tax issue isn’t dealt with.