Why Stripping Away Tax-Exempt Status for Religious Institutions Just Doesn’t Add Up

October 25, 2019

by Jorge Gomez • 6 min read

During a recent CNN presidential town hall debate, Democratic “hopeful” Beto O’Rourke made an onerous threat, stating that he’d make it one of his priorities to strip churches of their tax-exempt status if they oppose same-sex marriage.

According to him, “There can be no reward, no benefit, no tax break for anyone or any institution, any organization in America, that denies the full human rights and the full civil rights of every single one of us.”

Reading that might make you or any casual observer think people of faith use religious liberty is, as some say, a “license to discriminate.”

But nothing could be further from the truth. Religious liberty isn’t some hidden boogeyman we use to scare (or force) others to conform to our beliefs.

It’s the most fundamental and essential freedom found in our Constitution.

What’s really frightening is that O’Rourke’s is making a direct attack on the constitutional guarantee of religious liberty. His outrageous call to strip away this benefit is a dangerous attack on one of the most fundamental rights under the First Amendment: the right of religious institutions to operate according to their deeply-held beliefs.

But not only is his idea legally wrong, it’s bad policy.

Here are three big reasons why religious liberty is beneficial to ALL Americans, and why we continue to extend the longstanding benefit of tax exemption to houses of worship and religious organizations.

Religious Freedom is Good for the Economy

When religious liberty is protected, it gives a boost to the economy and to businesses. Studies show that when churches and religious organizations are free to operate according to their faith, they have an enormous impact in our local communities with the services they provide.

A 2012 study by Dr. Rodney Stark of Baylor University found the savings to taxpayers nationwide from benevolent actions of religious people and organizations totaled over $2 trillion per year.

The World Economic Forum reports that protecting religious liberty increases diversity, and that the 12 most religiously diverse countries are among the world’s most prosperous.

A Georgetown University and Brigham Young University study examined 173 countries and found a strong correlation between religious liberty and economic growth. Innovative strength is more than twice as likely among countries with low religious restrictions. After controlling for over 20 different factors, religious freedom is one of the only variables that remains a significant predictor of GDP growth.

Religious Freedom Helps Reduce Corruption

Researchers and economists typically look at levels of corruption as a key component of the overall health and prosperity of a country, especially because corruption can affect the wealth of a nation, as well as lead to instability and unpredictability in its core institutions.

A review of the Pew Research Center’s 2012 Government Restrictions on Religion Index and the 2014 Corruption Perceptions Index demonstrates an interesting correlation. In particular, higher levels of corruption occur in countries and political systems in which the laws exclude religion or target religious groups. In other words, higher governmental restrictions on religion often lead to higher levels of government corruption.

The Religious Freedom and Business Foundation found that nine of the ten most corrupt countries around the world have high levels of government restrictions on religion.

Religious freedom allows business men and women to use their faith and beliefs as a way to guide and to inform their business and political decisions. It empowers businesses, leaders, and everyday citizens to live without the fear of government cracking down on their beliefs. In essence, religious liberty sets people free to make moral and ethical decisions, and to live according to their convictions, making for an environment less conducive to corruption.

Religious Freedom Fosters Peace

Religious freedoms and the ability to live out your faith reduce the opportunity for religion-related violence. These freedoms are essential to rid society of tensions and to generate the tolerance needed in order for groups of various faiths to coexist without going to war with one another.

The World Economic Forum explained, “When religious freedoms are not respected, the result can be violence and conflict. Normal economic activities become vulnerable to disruption, with local and foreign investment driven away and sustainable development undermined…”

A multi-country study conducted by the Institute for Economics and Peace summarized, “Countries with greater religious freedoms are generally more peaceful, whereas countries with less religious freedom are generally less peaceful.”

Religious liberty is key to fostering the societal peace that most people aspire, not just in America, but also worldwide.

First Liberty Institute has a long track record of defending churches, ministries and faith-based organizations from illegal threats. Join First Liberty in the fight to stop O’Rourke or anyone who attempts to strip our churches of their right to live it out. Give today.

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