I like Nick Xenophon, I like him a lot. He’s like the anti-Steve: an independent senator able to his head above water as he swims through the senatorial swill.
His attack on the tax free status church of Scientology last night was laudable, and long overdue, but did not go nearly far enough.
Scientologists really are fish in a barrel though: they owe their beginnings to a not-terribly-good science fiction writer, they believe in aliens and they have couch-jumping Tom Cruise as their mascot. You’re not going to provoke a riot by poking them with pointy sticks; but if you are going to question the right of Scientologists to run a tax free organisation, how can you not ask the same question about the Catholics, the Jews, the Pentecostals and the Muslims?
Religious groups in Australia have a combined wealth of around $1 billion, they run cereal companies, insurance companies, wineries and pizza chains, and pay none of the income tax or capital gains tax that slows the rest of us down on our climb to wealth and profit.
Why not? These are for-profit activities, they are not charitable or even evangelical; they are in the business of being in business, how do they manage to avoid business costs because of a misty historical precedent that has no relevance in a secular society?
Religious organisations argue that their profits are redistributed to the community in the form of charitable activities and community services. This same claim is made by purveyors of poker machines and it’s the reddest of herrings in both cases. Non-profit or charitable activities are tax deductions no matter who you are, and if all your profits are distributed this way then you will not pay any tax on them.
If you are not a religious organisation, however, you will need to put in a tax return and provide some proof that this is indeed the case. What possible cause does any church have to say that they should be exempt from this requirement?
A stronger argument against taxing religious organisation is that it would allow governments to shut down churches for non-payment of taxes, and could be manipulated to allow secular interference with religions unpopular with the government of the day. This is a valid point and no-one wants to see governments mucking about with religion, but taxing business activities is not going to interfere with any religious activities, unless you want to believe in the divine properties of Weet-bix™ and So Good™. It’s fear-mongering and chest-beating to drown out the facts.
Taxes are only required where profit is generated: if the expenses of running a business (or church) are more than the income, there is no tax to be paid; if a church wants to confine itself to charitable and evangelical activities it will generate no profit and not have to worry about taxes. If, on the other hand, a religious organisation manages to extract profits from its congregation or cereal packets, it should not be allowed to hide the source or the amount of those profits from the public by covering it with a shroud of we-are-untouchable-because-of-God mysticism.
It has no place in a society like Australia, which is, blessedly, secular.
Not nearly secular enough. But too right, I’ve been boycotting the Sanatarium brand for some time because of this.
Jane, I disagree violently – “not-terribly-good science fiction writer” is far too kind to Hubbard, he’s an awful, abysmal atrocious[1] SF writer.
But, you’re right about the tax-free status of religious groups, why, if I was setting up a company today, I’d make it a religion in the incorporating articles. Why would you not do this?
[1] that’s without needing to move on from the ‘a’ adjectives.
Yeah, great idea ! NOT !
Please tax the Anglicans so they cannot afford to provide affordable care for my demented octogenarian mother – and many many like her.
OK, some “churches” manage to not make a profit from commercial operations by clever accounting. I agree. Tax their legs off.
But when you adopt some wooden-headed catch all idea, be prepared for the unintended consequences. And we can seend all the incontinent dribblers over to your place.
Great article and I could not agree more. By not paying tax on their profits, religious institutions only add to the tax burden for companies and individuals. A genuine secular society would not allow tax exemptions based on mediaeval superstitions.
@Mike – have you seen how much they charge for care if they decide you can afford it? Believe me, they aren’t running at cost.