The separation of church and state (a lie within itself) has been a way of pushing morality out of politics. By placing the silence amendment (tax exempt status) in the income tax code, government has made it clear that a church body cannot have a political opinion nor does it have the right to Free Speech as protected for them in the First Amendment.
If there is any tax reform incentive that all churches and church members should be championing, it should be the FairTax. I have been studying the various papers and books presented by the FairTax organization, and I have found that the FairTax is very favorable to the church and other non-profits.
First, the church will still maintain its tax exempt status (except when it sells items such as Bibles - it will have to charge tax). This means that the church can purchase items for "business" purposes such as computers for offices and get tax exemption. Or it can purchase goods for use in a soup kitchen, or other outreach programs, tax free.
Second, the church is given its freedom of speech back. That means a pastor could speak out about a political subject and not fear the IRS rebuke and pulling of tax exempt status.
As a Christian leader and minister, I believe this is vital for the church.
- This means that church would no longer have to collect income taxes on its employees who get to keep their entire checks. This enables them to have more spending power.
- The church will no longer be handcuffed in speaking about moral issues in fear of political backlash.
- The church would not have to report anything to the federal government unless it has charged something for a service (bookstore, cafe, or restaurant).
- The church benefits because all interest earning endowments will be tax exempt (assets, funds, and property donated to the church as a source of income).
I know there is a lot of fear about what would happen to giving. But to be honest, I do not give in order to get a tax break. I give because God has commanded me to give. Anyway, who gives $1000 just to get a $300 break?
Read the "white" papers the FairTax organization has. Do not let others lie to you about the dangers of this exciting initiative. If you are a church member or a pastor, then you owe it to yourself to really discover for yourself if this is good for your ministry or not.
Here is a link to the Charitable Giving Papers.
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While many who are invested in the current income tax system seek to demagog the well-researched FairTax plan, FairTax's theoretical underpinnings have been professionally reviewed, and its acceptance in the professional / academic community continues to grow.
Renown economist Laurence Kotlikoff believes that failure to enact the FairTax - choosing instead to try to "flatten" what he deems to be a non-flattenable income tax system - will eventuate into an irrevocable economic meltdown, because of the hidden aspects of the current system that make political accountability impossible. Tom Frey, of the DiVinci Institute, foresees the coming collapse of the income tax system.
Here is why the FairTax MUST replace the income tax. It's:
• SIMPLE, easy to understand
• EFFICIENT, inexpensive to comply with and doesn't cause less-than-optimal business decisions for tax minimization purposes
• FAIR, loophole free and everyone pays their share
• LOW TAX RATE, achieved by broad base with no exclusions
• PREDICTABLE, doesn't change, so financial planning is possible
• UNINTRUSIVE, doesn't intrude into our personal affairs or limit our liberty
• VISIBLE, not hidden from the public in tax-inflated prices or otherwise
• PRODUCTIVE, rewards, rather than penalizes, work and productivity
Its benefits are as follows:
For INDIVIDUALS:
• No more tax on income - make as much as you wish
• You receive your full paycheck - no more deductions
• You pay the tax when you buy "at retail" - not "used"
• No more double taxation (e.g. like on current Capital Gains)
• Reduction of "pre-FairTaxed" retail prices by 20%-30%
• Adding back 29.9% FairTax maintains current price levels
• FairTax would constitute 23% portion of new prices
• Every household receives a monthly check, or "pre-bate"
• "Prebate" is "advance payback" for taxes payable on monthly consumption to poverty level
• FairTax's "prebate" ensures progressivity, poverty protection
• Finally, citizens are knowledgeable of what their tax IS
• Elimination of "parasitic" Income Tax industry
• NO MORE IRS. NO MORE FILING OF TAX RETURNS by individuals
• Those possessing illicit forms of income will ALSO pay the FairTax
• Households have more disposable income to purchase goods
• Savings is bolstered with reduction of interest rates
For BUSINESSES:
• Corporate income and payroll taxes revoked under FairTax
• Business compensated for collecting tax at "cash register"
• No more tax-related lawyers, lobbyists on company payrolls
• No more embedded (hidden) income/payroll taxes in prices
• Reduced costs. Competition - not tax policy - drives prices
• Off-shore "tax haven" headquarters can now return to U.S
• No more "favors" from politicians at expense of taxpayers
• Resources go to R&D and study of competition - not taxes
• Marketplace distortions eliminated for fair competition
• US exports increase their share of foreign markets
For the COUNTRY:
• 7% - 13% economic growth projected in the first year of the FairTax
• Jobs return to the U.S.
• Foreign corporations "set up shop" in the U.S.
• Tax system trends are corrected to "enlarge the pie"
• Larger economic "pie," means thinner tax rate "slices"
• Initial 23% portion of price is pressured downward as "pie" increases
• No more "closed door" tax deals by politicians and business
• FairTax sets new global standard. Other countries will follow
It's well past time to scrap the tax code and pay for government the way that America's working men and women are paid - when something is sold.
(Permission is granted to reproduce in whole or part. - Ian)
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