Repub­li­cans are­tax­ing churchesto­help cor­po­ra­tions

The Record (Troy, NY) - - FRONT PAGE - E. J. Dionne’s email ad­dress is ej­[email protected]­post.com. Twit­ter: @EJ­Dionne.

Repub­li­cans tax churches to help pay for big cor­po­rate give­away. You would be for­given for think­ing this is a head­line from the Onion or the fan­tasy of some left-wing web­site. But it’s ex­actly what hap­penedin the big cor­po­rate tax cut the GOP passed last year.

Now — un­der pres­sure from churches, syn­a­gogues and other non­prof­its — em­bar­rassed lead­ers of a party that casts it­self as re­li­gious lib­erty’s last line of de­fense are try­ing to fix a pro­vi­sion that is a mon­u­ment to both their care­less­ness and their hypocrisy.

The authors of the mea­sure ap­par­ently didn’t even un­der­stand what they were do­ing — or that’s their alibi to faith groups now. It’s not much of a de­fense. And the fact that Repub­li­cans in­creased the tax bur­den on non­prof­its, in­clud­ing those tied to re­li­gion, so they could shower money on cor­po­ra­tions and the wealthy shows where their pri­or­i­ties lie.

At stake is a pro­vi­sion in the $1.5 tril­lion Tax Cuts and Jobs Act of 2017 that di­rected not-for-prof­its of all kinds — houses of wor­ship but also, for ex­am­ple, univer­si­ties, mu­se­ums and or­ches­tras — to pay a 21 per­cent tax on cer­tain fringe ben­e­fits for their em­ploy­ees, such as park­ing and meals.

The new levy on the “armies of com­pas­sion” for­mer pres­i­dent Ge­orge W. Bush liked to ex­tol would raise an es­ti­mated $1.7 bil­lion over a decade.

That’s a van­ish­ingly small amount in the scheme of the GOP’s deficit-in­flat­ing tax ex­trav­a­ganza, but it’s re­veal­ing. To lower the price tag of their con­fec­tion for the wealthy, Repub­li­cans ef­fec­tively hiked taxes on all sorts of other peo­ple and en­ti­ties — most con­tro­ver­sially, by sharply cur­tail­ing de­ductibil­ity of state and lo­cal taxes. This was an­other two-faced move from a party that reg­u­larly as­sails “un­funded fed­eral man­dates” and lauds the im­por­tance of state and lo­cal prob­lem-solv­ing.

GOP lead­ers have told representatives of re­li­gious or­ga­ni­za­tions that they had no in­ten­tion of tax­ing them. They were fo­cused on what they saw as liberal bas­tions in the third sec­tor: univer­si­ties, foun­da­tions and the like.

But this ex­cuse only makes the story worse. It shows how slip­shod the ar­chi­tects of this tax bill were, and it demon­strates their deeply par­ti­san mo­tives. Af­ter all, lim­it­ing the state and lo­cal de­duc­tion raises taxes far more on mid­dle-class and well-off tax­pay­ers in Demo­cratic states than on their coun­ter­parts in Repub­li­can states. No won­der blue states such as Cal­i­for­nia, New Jersey and New York evicted so many House Repub­li­cans last month.

The re­li­gion tax, as one might call it, is a night­mare for many houses of wor­ship, par­tic­u­larly smaller ones.

“Re­quir­ing these or­ga­ni­za­tions to pay a fed­eral tax on these em­ployee ben­e­fits, some­thing they have never been re­quired to do be- fore, will cause them to not only face an in­creased op­er­at­ing cost, but also an ad­min­is­tra­tive bur­den,” wrote Sens. James Lank­ford (R-Okla.) and Christo­pher A. Coons (D-Del.) in a Nov. 27 let­ter to Trea­sury Sec­re­tary Steven Mnuchin.

They asked Mnuchin for a oneyear de­lay in im­ple­ment­ing the pro­vi­sion to give Congress time to fix it. And the two sen­a­tors — who will co-chair the Na­tional Prayer Break­fast in 2019 — nicely cap­tured the ab­sur­dity of this tax “re­form” by not­ing: “Eat­ing a meal with the home­less in their shel­ter should not be a tax­able ben­e­fit for their em­ploy­ees.”

Repub­li­cans have rel­ished at­tack­ing Democrats as sec­u­lar­ist foes of re­li­gion and re­li­gious peo­ple. You would thus think they might put a lit­tle care into how their leg­is­la­tion might af­fect re­li­gious groups. They didn’t. As Nathan Di­a­ment, pub­lic pol­icy di­rec­tor for the Union of Ortho­dox Jewish Con­gre­ga­tions, noted, the park­ing and meals tax “breaches a long-stand­ing prin­ci­ple that we pro­tect our houses of wor- ship from state en­tan­gle­ment in their op­er­a­tions.”

In the fi­nal weeks of uni­fied GOP control of Congress, Rep. Kevin Brady (R-Tex.), the out­go­ing Ways and Means Com­mit­tee chair­man, had hoped to pass a sub­stan­tial new tax bill. Af­ter some re­luc­tance, he added a pro­vi­sion end­ing the re­li­gion tax.

But in an in­ter­view, Coons said the only tax leg­is­la­tion with any chance of get­ting enough Demo­cratic sup­port to pass the Se­nate would in­volve a small num­ber of bi­par­ti­san mea­sures, in­clud­ing, he hopes, scrap­ping the not-for-profit tax. Big­ger fixes to the GOP’s tax mon­ster will have to wait. And delays in the con­gres­sional cal­en­dar be­cause of Ge­orge H.W. Bush’s fu­neral might doom tax leg­is­la­tion al­to­gether.

If this Congress fails to act, House Democrats should make re­peal an early pri­or­ity. It would be il­lu­mi­nat­ing to hear Repub­li­cans re­spond to Demo­cratic speeches prais­ing re­li­gious con­gre­ga­tions and their in­dis­pens­able work on be­half of char­ity and jus­tice.

EJ Dionne Columnist

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