In the cover story of Christianity Today’s January/February issue, Paul Matzko makes a provocative argument that churches’ tax-exempt status comes at a cost, possibly even a detrimental cost, to both churches and the communities in which they are located. The argument is not necessarily new. Though the tax-exempt status for houses of worship has never been a leading political issue, it does make the news every now and then. It extends a “cultural privilege,” as Matzko calls it, that some cite as one more reason to resent religion. Matzko himself suggests the tax exemption leads to churches that live off “government largess” and accept the bribery of a tax benefit while forfeiting their religious freedom and their political voice.

I have a different view. Far from inhibiting religious freedom, tax exemption for houses of worship protects it. And in the highly unlikely event that churches lose their exempt status, the common good would suffer far more than it would benefit.

Safeguarding Religious Freedom

Contrary to Matzko’s portrayal of an across-the-board religious tax exemption as a vestige of European-style establishmentarianism, houses of worship are tax exempt to respect religious freedom and the separation of church and state. What offends American sensibilities about the European tradition is not tax-exemption, but the practice of taxing disfavored denominations, and using those funds to prop up the state and its favored religion.

Consider Isaac Backus, who Matzko invokes as an “evangelical dissenter” against government favors for religious groups. He was that, but hardly because he felt churches should pay taxes. As CT explained in a June article from 2018:

Far from ...

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