Christian History Home > News > 2002 > Of Church, State, and Taxes
Of Church, State, and Taxes
If you want to know what the establishment of religion looks like, check out church history, not American tax law.
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Christianity Today has had its eye on a story that began when Rick Warren, pastor of California megachurch Saddleback Community, deducted $79,999 for housing costs on his 1995 taxes. The IRS challenged the deduction, claiming that the house was only worth $59,479. What started as an argument over $20,000 quickly morphed into a question of whether clergy should be entitled to housing deductions at all. Critics of the "parsonage exemption" posit that if the government gives tax breaks to religious ministries, it's kind of like giving them money, and if the government gives ministries money, it's kind of like establishing religion.
The parsonage exemption might seem unreasonable when viewed only in light of the Constitution's famous establishment clause: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof." As commonly interpreted today, this means the government can't privilege religious organizations in any way. (Common interpretation has little to say about the second half of the clause.) But the question of taxation and churches predates the American Constitution by centuries. Tax exemption for churches grew out of this history, not out of early American political theory, and it made good sense to the lawmakers who put it on the books.
In the Old Testament, priests were exempted from taxation by Pharaoh (Gen. 47:26) and by Persia's King Artaxerxes (Ezra 7:24). Under the laws of Israel, Levites, the priestly tribe, actually received something like a tax. The Lord decreed, "I give to the Levites all the tithes in Israel as their inheritance in return for the work they do while serving at the Tent of Meeting" (Num. 18:21).
Unlike Levites, early Christian leaders lacked priestly status or privilege, and the Roman Empire tended to be less understanding than Pharaoh and Artaxerxes had been. Church leaders, when the Romans could identify and isolate them, were more likely to suffer special punishments than to receive special benefits.
This began to change with Emperor Constantine's conversion to Christianity in 311. Though Constantine had no desire to impose Christianity on his entire empire ("The struggle for deathlessness must be free," he said), he did pass laws favoring Christianity over paganism. Christianity became mandatory in the empire in 380 under Emperor Theodosius, who went on to ban all pagan activities in 391. Christianity thus became an "established" religion and settled into a long period of perks and privileges from the state.
For all of the medieval church's power, though, it was not always exempt from taxes. (Here I refer to the Western church; the Eastern, or Orthodox, church also enjoyed benefits of establishment—and still seeks to exercise some of those benefits in Greece, Russia, and elsewhere.) The papacy controlled and taxed the Papal States, but emerging kings and lesser rulers in the rest of Europe frequently sought to control and tax local church properties. When the papacy was strong, it fought such attempts; when the papacy was weak, secular authorities sometimes bent churches to their wills. Nonetheless, the church managed to amass considerable wealth and political power during this period.
The Protestant Reformation challenged many aspects of medieval Catholicism, among them the wealth and political influence of the Roman church. Most Reformers did not, however, challenge the basic idea of establishment. Lutheranism flourished with the backing of German nobles. In John Calvin's Geneva, church leaders served as the town council and municipal court. In Anglican Britain, a parish congregation automatically consisted of—and drew its revenue from—everyone who lived within the parish boundaries. Only the so-called "radical Reformation" argued for freedom of religion in anything like the contemporary sense. The other Reformers merely sought freedom from Rome.
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