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 ...

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