the tax man cometh

I’m in the middle of an intense four week writing assignment–more on that later–so I haven’t had time to blog as much as I’d like. But in case you missed it, Christianity Today has an interesting article on the precarious position of the ministerial housing allowance. Senator Charles Grassley’s investigation of the alleged improprieties of televangelists has led him to wonder what other benefits ministers might be getting from mammon.  

I will be sad to see the housing allowance go, but honestly, I can’t think of a good argument to keep it. Romans 13:6-7 is still in the Bible, and it doesn’t contain a ministerial exclusion. Alas, this may be the last year our toilet paper is tax free. As you can tell by that last sentence, the housing allowance is incredibly hard to justify.

11 Comments

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  1. I agree that it would be sad to see it go but basically that benefit is extended at Caesar’s whim and he is free to retract it. Now get back to work.

  2. Since it doesn’t really affect you one way or the other, I can’t really think of a good reason why you would need a good reason to keep it.

  3. As a pastor of a small church, to eliminate this benefit would be a huge blow. Most small church pastors are already living with below-average wages and below-average health care. I fear that this may prevent many churches from being able to have a pastor at all.

  4. Tim:

    I think they’re considering a graduated system, so small churches with poor pastors would be exempt.

  5. Mike: Yeah, that seems to be the discussion in the CT article. But I wonder what would keep them from eliminating it altogether. As you and others have stated, there is no good argument to keep it. If it were to be completely eliminated, the impact on churches would be huge.

  6. Perhaps the good reason to keep the housing allowance is one of the same good reasons for churches to be tax exempt – the social value a church gives to the surrounding community. And as Tim pointed out, small churches are struggling to pay a pastor as it is. What might happen to our communities if small churches all over the country started closing up because they could no longer support a pastor?

  7. Imagine the testimony it might be if pastors as a group voluntarily gave up the clergy housing deduction. It may have made sense back in the days when provision of a church-owned house was the norm, and any pastor without that was economically disadvantaged, but we’re not living in those days now. I cannot see any rational way to defend the deduction in principle, and I think a voluntary surrender of the privilege would grab the public imagination. But I’m not holding my breath while I wait for that to happen.

  8. Stan:

    You wrote: “It may have made sense back in the days when provision of a church-owned house was the norm, and any pastor without that was economically disadvantaged, but we’re not living in those days now.”

    Pastors of small churches in rural America are still living in that world. That makes up a large percentage of ministers.

  9. Tim,

    You caught me in a bit of overstatement, and I deserve your admonition. I understand the difficulty it would create if pastors in such churches had to count the rental value of a house as taxable income, but I still struggle with the idea that everyone except pastors would have to count such a benefit as income. I don’t want to make life difficult for small churches and their pastors, but there are issues of just taxation to think about.

  10. Stan,

    Thanks for the reply. I am not arguing that such a tax break should exist nor do I know the reason it was originally granted. (Perhaps Brian’s reasoning above is the best argument for why it should exist and the reason it currently does exist.) I am just voicing my concern over the impact it will have on small churches across the country if it is ever eliminated. There will be many pastors and many churches greatly impacted by such a change.

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