"Seventy-five percent of Americans claim religious affiliation, which can impact their taxpaying responsibilities. In this illuminating book, Samuel D. Brunson describes the many problems and breakdowns that can occur when tax meets religion in the United States, and shows how the US government has too often responded to these issues in an unprincipled, ad hoc manner. [This book] offers a better framework to understand tax and religion. It should be read by scholars of religion and the law, policymakers, and individuals interested in understanding the implications of taxation on their religious practices."--Page [i]
In 1944, the Ku Klux Klan officially suspended its operations. Two years later, it had entirely ended. In part this was the inevitable result of a decade of declining influence and membership. In part, though, it was the result of actions by the federal government and the state of Georgia. In 1916 the Ku Klux Klan incorporated as a Georgia fraternal organization, following a model of the Masons and other fraternal organizations. It also claimed to be a tax-exempt fraternal beneficiary society under the new federal income tax. These legal statuses provided the Klan with legal rights and benefits and also shrouded it in a cloak of respectability: it could claim that it was not merely a terroristic white supremacist group, but that it provided fraternal benefits to its members and the surrounding community. While the Klan's incorporation and tax status provided it with benefits, they also imposed obligations on the organization. The Klan ultimately proved incapable of meeting these requirements. It violated the terms of its corporate charter and of tax exemption as a fraternal beneficiary society. In 1944 the Bureau of Internal Revenue assessed a $685,305 tax on the Klan and, when the Klan did not pay, filed a lien. The state of Georgia in turn revoked its corporate charter. While these moves did not cause the downfall of the early twentieth-century version of the Klan, they did seal its death. This Article relates the story of the Klan's corporate and tax statuses. It focuses on this story both because the story has never been related in any detail and because it provides a perspective on how government can deal with contemporary white nationalist groups without violating the Constitution.
In 2019, the Seventh Circuit decided an Establishment Clause question that had been percolating through the courts for two decades. It held that the parsonage allowance, which permits "ministers of the gospel" to receive an untaxed housing allowance, does not violate the Establishment Clause of the Constitution. It grounded its conclusion in part on the "historical significance" test the Supreme Court established in its Town of Greece v. Galloway decision. In coming to that conclusion, the Seventh Circuit cited a 200-year unbroken history of property tax exemptions for religious property. According to the Seventh Circuit, that history demonstrated that both the Founders and subsequent generations of Americans recognized that there was no constitutional problem with exempting parsonages. The court's historical significance analysis was fundamentally flawed, however. Had the court actually engaged with this history, rather than made the conclusory assertion of consistent and uncontroversial exemption, it would have seen at least two things that complicated its facile conclusion. Significantly, in treating the history of religious property tax exemptions as unbroken and consistent, the court elided the actual history, which was messy and varied. The actual history provides no support for the proposition that the Framers and those who followed viewed property tax exemptions as constitutional. Even if the history were as clean as the Seventh Circuit portrayed it, that history would have been irrelevant to the question of the constitutionality of the parsonage allowance. The Supreme Court did not incorporate the Establishment Clause against the states until 1947, so states faced no Establishment Clause bar to exempting for religious property. And the federal government only made four attempts at taxing property, none of which expressly exempted religious property. In this Article, I explore the historical and current tax exemptions for parsonages, and trace how states arrived at their current exemptions. Ultimately, I conclude that the historical significance test, as applied by the Seventh Circuit, does not support the constitutionality of the parsonage allowance. I further conclude that, given its complexity and the fact that attorneys and judges tend to be poor historians, the historical significance test is not well suited as a jurisprudential tool for analyzing Establishment Clause questions, and that courts should not adopt it.
Gun violence is an outsized problem in the United States. Between a culture that allows for relatively unconstrained firearm ownership and a constitutional provision that ensures that ownership will continue to be relatively unchecked, it has proven virtually impossible for politicians to address the problem of gun violence. And yet, gun violence costs the United States tens of billions of dollars or more annually. These tens of billions of dollars are negative externalities — costs that gun owners do not bear themselves, and thus that are imposed on the victims of violence and on taxpayers generally. What can we do about these costs? One way to reduce them would be to pass meaningful laws, laws that would reduce the likelihood of gun violence. In light of both the culture and the Constitution of the United States, though, such legislation seems improbable. Lawmakers face significant limitations on their ability to regulate firearms directly. If they cannot prevent gun violence, though, they can at least cause gun owners to internalize the costs. Where direct regulation is difficult, they can turn instead to a Pigouvian tax. In this Article, I propose a Pigouvian tax on firearms. The tax would be a hybrid excise tax and property tax, imposed at the state or local level. Legislatures would set tax rates that roughly approximated the amount of externality that gun violence created in their jurisdiction, and would use the revenue to reimburse individuals and governments for the costs they bore from gun violence. Such a tax would have little problem passing the constitutional muster, and, while it might have little behavioral impact, at least it would serve the interim purpose of making society financially whole, and requiring gun owners to bear a larger percentage of the costs of gun ownership.
Since the enactment of the modern federal income tax, churches have been exempt from taxation. But that exemption is neither necessary nor inevitable. In fact, at the end of the 1860s, the Bureau of Internal Revenue decided that tithing received by the Mormon church was taxable under the Civil War income tax. At the time, Mormons distrusted the federal government and the federal government, in turn, distrusted the Mormons. The question of taxation was a small part of a larger legal and existential battle between the Mormons and the government. This Article situates the question of the taxability of tithing in the broader legal and relational conflict. More important, it tells the story of how the income tax threatened to fundamentally change the Mormon church and how Mormon leaders reacted to that threat, both with increasingly sophisticated legal arguments and, in the event their legal argumentation failed, with plans to take the tax law into account.
