The way that religious people get tax breaks in the US is a disgrace. But Barbara B. Crabb, US District Court judge in Wisconsin, ruled yesterday that the tax exemption given to clergy for their housing allowance is unconstitutional. This allowance is taken advantage of by about “44,000 ministers, priests, rabbis, imams and others” and “some clergy members could experience an estimated 5 to 10 percent cut in take-home pay.”
The suit was brought by the co-founders of the Freedom From Religion Foundation who argued that it was unfair that clergy got this benefit while the heads of secular organizations (like them) did not, and that this practice violated both the Establishment Clause and the Equal Protection Clause.
You can see the text of the ruling here. The judge relied heavily on the argument that the constitution requires neutrality in the way that it treats religious and non-religious organizations, using a modified version of the Lemon test to judge Establishment Clause violations.
Plaintiff Freedom from Religion Foundation, Inc. and its two co-presidents, plaintiffs Annie Laurie Gaylor and Dan Barker, brought this lawsuit under the Administrative Procedure Act, 5 U.S.C. § 702, contending that certain federal income tax exemptions received by “ministers of the gospel” under 26 U.S.C. § 107 violate the establishment clause of the First Amendment and the equal protection component of the Fifth Amendment.
With respect to the merits, I conclude that § 107(2) violates the establishment clause under the holding in Texas Monthly, Inc. v. Bullock, 489 U.S. 1 (1989), because the exemption provides a benefit to religious persons and no one else, even though doing so is not necessary to alleviate a special burden on religious exercise. This conclusion makes it unnecessary to consider plaintiffs’ equal protection argument.
Some might view a rule against preferential treatment as exhibiting hostility toward religion, but equality should never be mistaken for hostility. [My italics-MS]
It is important to remember that the establishment clause protects the religious and nonreligious alike. Linnemeir v. Board of Trustees of Purdue University, 260 F.3d 757, 765 (7th Cir. 2001) (“The Supreme Court has consistently described the Establishment Clause as forbidding not only state action motivated by a desire to advance religion, but also action intended to ‘disapprove,’ ‘inhibit,’ or evince ‘hostility’ toward religion.”). If a statute imposed a tax solely against ministers (or granted an exemption to everyone except ministers) without a secular reason for doing so, that law would violate the Constitution just as § 107(2) does. Stated another way, if the government were free to grant discriminatory tax exemptions in favor of religion, then it would be free to impose discriminatory taxes against religion as well.
The judge rejected the argument that Gaylor and Barker could also be considered ministers and atheism a religion and hence they could have taken advantage of the tax exemption if they had wanted to and thus has no basis for suing.
This is an important ruling but of course will be appealed by religious groups. Religious groups may love their gods but they love their tax breaks more and will fight to the death to keep them.