ANOTHER REASON TO MOVE TO THE FAIRTAX—CLERGY HOUSING ALLOWANCE
In 1954, Congress enacted the clergy housing allowance which allows a church to provide a housing allowance to its minister that is not taxable as income to the minister. The Freedom From Religion Foundation website describes its purpose: “The history of Western civilization shows us that most social and moral progress has been brought about by persons free from religion. In modern times the first to speak out for prison reform, for humane treatment of the mentally ill, for abolition of capital punishment, for women's right to vote, for death with dignity for the terminally ill, and for the right to choose contraception, sterilization and abortion have been freethinkers, just as they were the first to call for an end to slavery. The Foundation works as an umbrella for those who are free from religion and are committed to the cherished principle of separation of state and church.”
This group, an atheist group, attempted to exclude income paid to their co-president using the clergy housing allowance. The IRS denied the deduction. The Foundation sued on April 6, 2016 in the Western District of Wisconsin. They alleged, “FFRF asked the court to rule the provision unconstitutional because it provides preferential and discriminatory tax benefits to ministers of the gospel. The section ‘directly benefits ministers and churches, most significantly by lowering a minister's tax burden, while discriminating against the individual plaintiffs, who as the leaders of a nonreligious organization opposed to governmental endorsements of religion are denied the same benefit.’ Clergy are permitted to use the housing allowance not just for rent or mortgage, but for home improvements, including maintenance, home improvements and repairs, dishwashers, cable TV and phone fees, paint, towels, bedding, home décor, even personal computers and bank fees. They may be exempt from taxable income up to the fair market rental value of their home, particularly helping well-heeled pastors.”
On Oct. 6, 2017, the Wisconsin court agreed and invalidated the clergy allowance. The case is now on appeal to the Seventh Circuit Court of Appeals.
What The Lower Court Decision Means
If the Wisconsin court opinion is upheld, there will be some disturbing consequences. Christian Today outlined the following concerns:
- Currently, 81 percent of full-time senior pastors in the US receive a housing allowance, according to the latest compensation figures obtained by CT’s Church Law & Tax. The typical church spends about 9 percent of its total budget on housing compensation.
- According to congressional estimates, by not paying taxes on this portion of their income, American pastors save a total of $800 million a year.
- If the government were to scrutinize housing allowance recipients or to allow parsonage allowances but not stipends, “it would be the IRS and the courts deciding what is the essence of the church,” he said. “Is what takes place in a minister’s home really important to the church or not?”
Conclusion
This is an example of how the government supposedly provides a “benefit” to a group and because of this supposed “benefit”, the group is against eliminating the horrible income/payroll tax system.
Is the clergy allowance really a “benefit?” Any time you are allowed to reduce your taxable income you reduce the amount of income taxes owed. For example, if the clergy allowance was $20,000 then the recipient would save the income taxes on the $20,000 and, depending on the rate, this could be an income tax savings of between $2,000 to $4,000. This means that the church is able to pay the same amount less in salary and the minister gets the same net income. So, the clergy housing allowance does provide some “benefit” to the church and the minister.
Of course, the clergy allowance only is a deduction from federal income taxes but not Social Security and Medicare taxes. The minister is required to pay the entire 15.3% tax. This means that the minister will still have to pay $3,600 of Social Security and Medicare taxes on the $20,000 clergy allowance.
Contrast this with the minister receiving the same clergy allowance under the FAIRtax.
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- There is no tax of any kind on the allowance.
- There is no Social Security and Medicare tax owed.
- The minister receives the same prebate/tax credit which means that the minister’s spending up to the poverty level for the minister’s family is not taxable.
- There are no income tax returns.
- The church does not have to prove it is a religious organization to the IRS.
Isn’t it time we again allow people to be safe to have and express their own religious beliefs? It is incredibly difficult with the income/payroll tax system but much easier with the FAIRtax. That is a compelling reason for many of us who value religious freedom to support the FAIRtax!
As Thomas Jefferson said, “...legitimate powers of government reach actions only, & not opinions, I contemplate with sovereign reverence that act of the whole American people which declared that their legislature should 'make no law respecting an establishment of religion, or prohibiting the free exercise thereof,' thus building a wall of separation between Church & State. Adhering to this expression of the supreme will of the nation in behalf of the rights of conscience, I shall see with sincere satisfaction the progress of those sentiments which tend to restore to man all his natural rights, convinced he has no natural right in opposition to his social duties.”
The truth is the truth. Remember, if we don't continue to tell the truth and demand a change, then this quote from George Orwell's 1984 may foretell our children's future:
“If you want a picture of the future, imagine a boot stamping on a human face—forever.”
WHAT CAN EACH OF US DO
Call up the local or D.C. offices of your House Member and two Senators and you can use the following script:
- I am sure that Representative ____ or Senator ____ is in favor of everyone obeying the income tax laws.
- After they assure you that their boss is not in favor of anyone breaking the law, ask if they are aware of the Cebula study showing $9 trillion of evaded income/payroll taxes over the next ten years.
- Since most will say they don’t believe their boss has seen the study, either drop off a copy or get an email address and send a copy to them for their boss.
- Say you are going to call back in a week and ask what the Representative or Senator is going to do to stop this evasion.
- In a week, call back and ask specifically what the Representative or Senator is going to do to enforce the law.
- They probably will say their boss believes that simplifying the income tax will handle the problem.
- Explain that when people evade income taxes, they are also evading the 15.3% payroll/Medicare tax and state income tax. So it is unlikely that they are going to pay 30% or 40% when they were paying 0% because they have already decided it is okay to cheat.
- Say that the only way to reduce evasion is to increase by tens or hundreds of thousands the number of comprehensive IRS audits done each year.
- Point out that Evaders do not self-identify by putting an “E” on their income tax return.
- 80% of the people likely to be audited are trying to comply, but they will be forced to endure these IRS audits as well.
- Ask if the Member is in favor of this?
- If they say no, then ask again how the Member proposes to stop people breaking the income tax laws.
- Then explain that the way to handle evasion without unleashing the IRS audits is the FAIRtax.
If you can see your Member or attend a town hall and ask these questions, you can be even more effective.
FAIRTAX POWER RADIO #105
HOW DO I LOVE THEE FAIRTAX
As you listen to this episode, you will realize that HR 25 is much more than a tax proposal. It’s a economic boosting bill; it’s a jobs bill; it’s bill that helps us return to the founding concepts of this country. How is it possible that a tax proposal which is only 133 pages long can do all this? If you can’t answer that question, you need to listen to this episode. The FAIRtax Guys continue listing and discussing the many, many ways in which the FAIRtax will make life in America easier and more prosperous while restoring the Bill of Rights for all of us. Good, positive and upbeat message from the guys that love to talk about the FAIRtax.
LAST WEEK’S EPISODE - 50 WAYS TO LOVE THE FAIRTAX
When someone asks you “What’s so great about the FAIRtax?” what do you tell them? Gets rid of the IRS? No more tax returns? Boosts the economy? Actually, there is a huge list of advantages of the FAIRtax ranging from economic issues to foreign trade to the underlying concepts of the Declaration of Independence and our Constitution. And the FAIRtax Guys used this episode to list and discuss many of them. And they could not finish in one episode because there are so many advantages of the FAIRtax, more time is needed.
Telling your friends and relatives about our free weekly podcasts is a great way to help us garner more support. It is the American people who must demand REAL tax reform in Congress. We must inform America about the FAIRtax! Please help us.
Telling your friends and relatives about our free weekly podcasts is a great way to help us garner more support. It is the American people who must demand REAL tax reform in Congress. We must inform America about the FAIRtax! Please help us.
You can listen to FTPR on any platform - Mac or PC, iPhone or Android. And it’s 100% free.
Listen on Spreaker.com (http://bit.ly/2oesbk7), iTunes (http://apple.co/1Te8VdF) or iHeart Radio (http://bit.ly/2eqEG7y) on your computer or smartphone. The easiest way to listen to FTPR on your smartphone is by downloading the free FTPR app. Just search for “FAIRtax Power Radio” in your app store, download the app and start listening.
We post a new episode every Friday morning. Please listen and tell everyone you know about the FAIRtax Power Radio.
The FAIRtax: Once You Understand It, You’ll Demand It!
THE ELECTRONIC INTRODUCTION TO THE FAIRTAX - AMERICA’S BIG SOLUTION
America’s Big Solution is a basic introduction to the FAIRtax and is meant for people of any age. And you can download it to your tablet or smartphone right now.
Do you know someone who would like an introduction to the FAIRtax and would prefer to read about it rather than search online for Tweets, Posts and Shares? If so, America’s Big Solution is their best choice.
America’s Big Solution is an introduction to the FAIRtax written by Terry Tibbetts, author of A Spartan Game: The Life and Loss of Don Holleder, with help from Ron Maiellaro, President of the Florida FAIRtax Educational Association.
You can buy an electronic version of ABS as follows: AMERICA’S BIG SOLUTION is available for only $2.99 for the Amazon Kindle (http://amzn.to/1WIRHry), the Barnes & Noble Nook (http://bit.ly/1XeG8bH) and Apple iOS (http://apple.co/1tnqK0P).
You can purchase a print copy at the same Amazon link above for $9.25. Regardless of whether you choose the electronic format or the print format, you’ll find AMERICA’S BIG SOLUTION will give someone the boost they need to begin their study of the FAIRtax and the suggested resources to learn more. Buy AMERICA’S BIG SOLUTION now!
LINKS TO MORE INFORMATION
These links will help you promote and support the FAIRtax, make yourself familiar with the links below. We always do our best to keep our AFFT community up to date, and you can stay ahead of the curve using these convenient sites.
- The website of Americans for Fair Taxation (www.fairtax.org)
- Read the Summary of the Evasion Study.
- Welcome to the Online FAIRtax Community (member.fairtax.org)
- The website at which you can help make it happen. (www.bigsolution.org)
- The Facebook page for Americans for Fair Taxation
- The Facebook page for The FAIRtax Guys
- The Twitter page for Americans for Fair Taxation
- PopVox - Connecting people and lawmakers for more effective participation and better governing
- YouTube channel for AFFT
- The Official FAIRtax Logo Store (www.fairtaxlogostore.org)
Thank You For Opening The FAIRtax Chronicles, Our Sponsored Mailings
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Thank you for staying FAIRtax strong!
