Acton Commentary

Time to End Clergy Tax Breaks?


Unless you are a member of the clergy or involved with the finances of a church or temple, you probably don’t know that since 1921 the federal government has subsidized a congregation’s remuneration of its pastor.  This happens through the extension of a housing or “parsonage allowance” that makes it possible for an ordained member of the clergy to live “tax-free in a home owned by his or her religious organization or receive a tax-free annual payment to buy or rent a home if the congregation approves.” Originally, this was meant as a way of helping “minimize taxes on clergy members, whose compensation was often meager.”

Recent court cases have extended “the parsonage allowance to an unlimited number of homes, which may be owned either by the religious organization or the clergy member. However unintentionally, in doing this the courts may have opened “the door for the allowance to be applied to multiple homes used by leaders of wealthier ministries.” Among those concerned about the possibility that this will lead to abuse or an unjust situation is Senate Finance Committee member Sen. Charles Grassley (R., Iowa).  "It's fair to question,” he says “why a clergy member needs a tax-free allowance for more than one home, and whether tax-exempt churches should subsidize millionaire ministers” (Tax Break for Clergy Questioned).

Yes, there will no doubt be those who abuse the system but when is this not the case? Religion plays a key role in maintaining a free and virtuous society, and an argument can be made that subsidies, such as the housing allowance or non-profit status for religious ministries, are a good thing for society lowering as they do the cost of maintaining a diverse range of religious communities which, in the aggregate, have a positive social effect.  

The recently issued document “A Circle of Protection” rightly points out that “Budgets are moral documents, and how we reduce future deficits are historic and defining moral choices.” Christians from both the political left and right can, and should, agree with this.  Likewise, I think it would be difficult for me, or any Christian, to deny that “It is the vocation and obligation of the church to speak and act on behalf of those Jesus called ‘the least of these.’” Nor would I, or any thoughtful Christian, deny that such a witness is essential part of “our calling” and that we must “strive to be faithful in carrying out this mission.”

Where some Christians might disagree is with their contention that the federal budget must give a “moral priority to programs that protect the life and dignity of poor and vulnerable people in these difficult times, our broken economy, and our wounded world.” Others, like those involved with Christians for a Sustainable Economy, have done a very good job of criticizing the document’s equating support for government programs with support for people so I won’t repeat those criticisms here. I would however like to make a more general point.

A number of the signatories of “A Circle of Protection” are ordained clergy and/or representatives of various Christian denominations or ministries. Many, and I dare say most, probably benefit personally from the federal housing allowance for clergy.  Because they work for religious denominations that are also non-profit corporations, they benefit institutionally from what, in a slightly different context, might be called corporate welfare.

Don’t misunderstand me. I’m not suggesting that there is anything necessarily wrong with either the clergy housing allowance or a ministry having non-profit status. As I said above, religious institutions play an important and essential role in fostering a free and virtuous society.

Nor am I calling into question the sincerity of anyone’s faith.  But I am mindful of the admonition that we “do no injustice in judgment” by being “partial to the poor” or holding in “honor the person of the mighty.” We are instead to be “righteousness” in our judgments (Lev 19:15, NKJV). I wonder whether or not under such a standard a Christian community can “be faithful in carrying out” its “mission” to speak for those in material need while at the same time accepting for themselves preferential treatment under the tax code.  In light of these considerations, perhaps those clergy who are advocating for more government spending would do their share for this cause by voluntarily—and very publicly—returning to the U.S. Treasury an amount equal to their parsonage allowance. Annually.

The Rev. Gregory Jensen is a priest of the Archdiocese of Washington, D.C. (Orthodox Church in America). He blogs at Koinonia and is a contributor to the Acton PowerBlog and the American Orthodox Institute’s Observer.