Dear GOP: Please kill the tax on churches. Love, your base

Better headline: Dear Lord, GOP, what the heck were you thinking in the first place? The Republican Party and Donald Trump have relied on evangelical churchgoers to maintain the enthusiasm and momentum for their agenda in single-party governance since Trump’s inauguration. For that, they have been rewarded with a sharply pro-life agenda, a more conservative judiciary, and a series of 5-4 decisions from the Supreme Court that would have easily gone the other way had Merrick Garland taken Antonin Scalia’s spot on the bench.


The price for that, though, is a surprise tax on churches and other non-profit organizations. Politico reports that this surprise might put a dent in the enthusiasm among the base:

Republicans have quietly imposed a new tax on churches, synagogues and other nonprofits, a little-noticed and surprising change that could cost some groups tens of thousands of dollars.

Their recent tax-code rewrite requires churches, hospitals, colleges, orchestras and other historically tax-exempt organizations to begin paying a 21 percent tax on some types of fringe benefits they provide their employees.

That could force thousands of groups that have long had little contact with the IRS to suddenly begin filing returns and paying taxes for the first time.

In order to raise enough revenue to qualify the tax-cut package for reconciliation, Republicans had to prove that it saved money off of deficit spending. In order to do that, they needed to raise other forms of revenue. They accomplished this by creating a new tax on fringe benefits, calculating that the changes would raise $40 billion in revenue over the next ten years. The new tax applies to transportation benefits, going as granular as covered parking spaces or bus passes, and also on other fringe items like free meals.

If that sounds like a bookkeeping headache for regular private-sector employers, especially small business owners, you’d be right. At least those businesses have some experience in tax compliance, though. In order to raise enough money to meet their reconciliation goals, the GOP failed to provide a waiver for non-profits, meaning organizations from NGOs to churches will have to start filing returns to pay the fringe-benefit tax.


And they are not at all thrilled at this prospect:

“There’s going to be huge headaches,” said Galen Carey, vice president of government relations at the National Association of Evangelicals, an umbrella group of evangelical Christian organizations. “The cost of compliance, especially for churches that have small staffs or maybe volunteer accountants and bookkeepers — we don’t need this kind of hassle.”

And frankly, the GOP hardly needs another distraction for its base. This isn’t any picayune issue, either. Republicans howled over the IRS’ treatment of conservative non-profits that operate in the political and cultural sphere. This heretofore unknown tax will put many more organizations at risk for political blowback from the IRS on the heels of the tax-exempt scandal of the Obama administration. With friends like these, who needs Lois Lerner?

House Ways and Means chair Kevin Brady stands by the taxes:

“The Tax Cuts and Jobs Act included provisions that provided greater parity in the tax treatment of different types of employee compensation,” Rob Damschen said in a statement. “Those provisions apply to both employers that are taxable entities and those that are tax-exempt entities.”

“Providing this greater parity helps to reduce the extent to which decisions about the elements included in an employee compensation package are driven by tax considerations,” he added.


That and a fiver will get you a tall mocha latté during your IRS audit, too. Rep. Mike Conaway has introduced a bill to get rid of the tax, but something tells me that Democrats won’t mind keeping it around, at least through the midterms.

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Jazz Shaw 9:20 AM | April 19, 2024