Are tax exemptions really like cash grants from the government?

If a church refuses to ordain women because it sincerely believes men should lead, could its tax-exempt status be removed? Critics of the Supreme Court’s recent decision to deny tax exemption to Bob Jones University believe the answer may be yes.

When the court ruled against BJU and the Goldsboro Christian Schools because of their racially discriminatory policies, it based its decision on a completely new criterion for determining if an organization qualifies for tax exemption. The new measure of worth is conformity to public policy—in this case, racial equality. Samuel E. Ericsson of the Christian Legal Society reads the ruling this way: “For the first time, the Supreme Court has decided that the government is free to tax unpopular religious beliefs, no matter how sincere those beliefs may be.”

In the BJU case, overwhelming public consensus against discrimination by race seemed pivotal. Chief Justice Warren E. Burger wrote for the majority, “The government has a fundamental overriding interest in eradicating racial discrimination in education—discrimination that prevailed, with official approval, for the first 165 years of this nation’s history. That government interest substantially outweighs whatever burden denial of tax benefits places on petitioner’s exercise of their religious beliefs.”

None who came to Bob Jones’s defense advocated racial discrimination. Instead, they became alarmed at the implications of the case for religious freedom, as well as for the rights of thousands of secular nonprofit groups—from Friends of the Earth to the National Right to Life Committee—to operate tax free. Lawyers siding with Bob Jones argued that the school policies in question, ...

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