29 Pages Posted: 4 Mar 2012 Last revised: 9 Mar 2012
Date Written: March 2, 2012
This Article proposes a unique resolution to the debate over political campaign participation by tax-exempt organizations, specifically religious organizations. By virtue of their tax-exempt status, these organizations are banned from participating in political campaign activity. Commentators have debated the merits of this ban for years and to say that commentators have been all over the map regarding their opinions over the ban is putting it charitably. The ban’s advocates and opponents have staked out seemingly every position imaginable in arguing the merits of this ban. Some commentators have argued forcefully that the ban is needed to preserve constitutional separation of church and state. Other commentators have argued as passionately that the ban is unconstitutional and pulls at the fabric of American democracy by unduly limiting political participation by churches and religious organizations. The arguments of each side of the debate take a zero-sum gain approach to resolving the debate, and commentators seem to discount the concerns of the opposition as either irrelevant or insignificant.
This Article does not attempt to resolve the debate in the literature over the ban’s legitimacy. Rather, this Article proposes a solution that the literature has apparently ignored: finding a compromise between the two extremes of the debate that addresses the primary concerns of both sides. This Article proposes that section 501(c)(3) organizations be permitted an increased amount of political campaign activity in ex-change for paying a tax referred to as a “self-directed tax.” What makes the self-directed tax unique is that the organizations themselves would be permitted to direct the government as to how to allocate the proceeds from the tax to a preset group of government spending choices. Similar rules would apply to the charitable deduction as well. The self-directed tax would allow section 501(c)(3) organizations to become more politically active. This Article’s proposal, however, still allows section 501(c)(3) organizations to preserve their unique status as partners with government in the provision of public goods — a status that justifies not requiring them to provide a portion of their profits to the government for the government to do with as it pleases.
Keywords: taxation, religion, politics, elections
Suggested Citation: Suggested Citation
Afield, W. Edward, Getting Faith Out of the Gutters: Resolving the Debate Over Political Campaign Participation by Religious Organizations Through Fiscal Subsidiarity (March 2, 2012). Nevada Law Review, Vol. 12, No. 83, 2011. Available at SSRN: https://ssrn.com/abstract=2014829