Sunday, April 8, 2007

Return to tax exemption

I continue stuff. Here's another argument against tax exempt status for religious organizations - and this one actually includes a "religious organization" that DOES pay taxes (not too many of these can be found).

Consider the story of two book publishing companies, Focus on the Family, Incorporated, and Word, Incorporated, one of the largest publishing houses serving the conservative Protestant world. Both solicit, sign, publish, and pay authors for manuscripts and then publish and sell those books in commercial bookstores, making a profit in the process. Both solicit manuscripts from exactly the same pool of author-- those written by conservative Christians on subjects that would be considered of religious or spiritual help to the reader. Both produce books for sale in exactly the same bookstores. Both advertise and promote. Both enjoy revenue from such sales. However, one of these companies does all the above and pays its fair share of taxes while the other insists that it should not have to pay taxes and does not do so. This second business claims that it has a right as a 501(c)3 to opt out of its share of taxes but still uses the government services that taxes pay for. Why? What is the difference between Focus and Word with regard to the book publishing enterprises of each?...

The fact is that Focus and Word expect and require exactly the same city, state, and federal services in order to conduct their businesses. One of them pays for those services and one does not. Some of the local property taxes on a company pave the streets in front of its offices. Word pays for the streets its employees use. Dobson claims he should not. Those same taxes pay the electric bill for the lights on those streets. And they construct and maintain the water lines that feed those offices and the sewage lines that drain them. If either corporate staff dials 911, the police or fire fighters will do everything in their power to assist those employees with a crisis. One pays and one does not....

Christopher Chang, a member of the staff of the city of Pomona, California, office of economic development supplied me with a report analyzing the precise impact on that city of the loss of property taxes, not to mention other taxes levied on normal businesses, when Focus on the Family was occupying office space in Pomona several years ago but not paying taxes. The report shows that Focus owned property with a valuation of $5,115,660, on which the property taxes during their three-year stay in Pomona would have totaled approximately $150,000. An estimated $150,000 in city services were used, but were not paid for by Focus on the Family. So who paid them?

The median annual household income in Pomona was $31,000 when Focus was located there. Pomona's population was 75 percent minorities. So minority families trying to survive in the Los Angeles area on $31,000 a year were given no choice but to pitch in a little extra so millionaire businessman Dobson, who lived twenty miles away in an upper-class white neighborhood, didn't have to pay any property taxes....

I talked recently with Jarrell McCracken, the founder and former CEO of Word, Incorporated. I asked McCracken if it ever bothered him that Dobson demands tax breaks that give him an unfair business advantage over competitors like himself. His response was, "Yes, and I've thought about that a lot. Anybody who exploits a tax advantage like that has taken it out of the context in which it was given. It becomes a corruption of that intent when it's taken to a commercial level. Jim can say that everything he makes goes into his nonprofit ministry. But the other side of that coin is that he has entered the commercial religious publishing field as a competitor. Not only is he a competitor, he is a competitor with a business advantage. He pays no taxes. I think that's a corruption of the intent of the tax-free status."

Of course, I can't cast stones when I myself am leading a Bible study based on Ray Vander Laan's "That the World May Know" series. Something to think about.

See my previous comments on this subject in my old blog: 2 August 2006 1 August 2006 22 January 2006 8 November 2005 16 May 2005 7 March 2005 29 September 2004 wow that's a lot


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