TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Friday, February 3, 2017

Trump Vows To ‘Destroy’ Law Banning Political Endorsements By Tax-Exempt Churches: One of His 'Least Objectionable Policies'?

IRS ChurchNew York Times, Trump Vows to ‘Destroy’ Law Banning Political Endorsements by Churches:

President Trump vowed on Thursday to overturn a law restricting political speech by tax-exempt churches, a potentially huge victory for the religious right and a gesture to evangelicals, a voting bloc he attracted to his campaign by promising to free up their pulpits.

Mr. Trump said his administration would “totally destroy” the Johnson Amendment, a 1954 law that prohibits churches from endorsing or opposing political candidates at the risk of losing their tax-exempt status.

“Freedom of religion is a sacred right, but it is also a right under threat all around us,” Mr. Trump told religious leaders at the National Prayer Breakfast. “That is why I will get rid of and totally destroy the Johnson Amendment and allow our representatives of faith to speak freely and without fear of retribution.”

Daniel Hemel (Chicago), The Johnson Amendment Lives Another Day:

President Trump says he wants to “totally destroy” the Johnson Amendment, the provision that denies § 501(c)(3) status to organizations that intervene in campaigns for public office. His comments come one day after two House Republicans introduced the Free Speech Fairness Act, and Trump’s “totally destroy” remark seems to be a reference to that legislation. Yet the Free Speech Fairness Act would do nothing of the sort: indeed, it would leave the Johnson Amendment in place and allow only “de minimis” campaign expenditures by § 501(c)(3) organizations. ...

In short, the Free Speech Fairness Act adds a “de minimis” exception to the Johnson Amendment. So a member of the clergy who endorses a political candidate in the course of a weekly sermon wouldn’t endanger her congregation’s § 501(c)(3) status. Ditto for a college newspaper with § 501(c)(3) status that prints an endorsement of a presidential candidate on its editorial page. The limits on lobbying by § 501(c)(3) organizations would remain unaffected. Meanwhile, a § 501(c)(3) organization that spent more than a “de minimis” amount on campaigning would put its status in jeopardy. ...

It’s also not obvious to me that this is a bad idea. Without a de minimis carevout, the Johnson Amendment acts as a potential tripwire for organizations like the Yale Daily News that simply failed to understand the § 501(c)(3) rules. That is (speaking of endorsements) far from an endorsement of the proposal, but of all the policy ideas to come out of the Trump administration so far, this seems like one of the least objectionable.

Chronicle of Philanthropy op-ed:  Politics and Charity: Do Not Mix., by Roger Colinvaux (Catholic):

In recent years, some charities, especially churches, have challenged the rule. The main argument for change is that the Johnson Amendment is a muzzle on charities, denying them the right to endorse candidates.

Put in the language of free speech, the argument has appeal. Who wants to muzzle a charity? In fact, charities are allowed to speak about issues — just not get involved in partisan politicking — and their workers are free to speak in their personal capacity. Setting that aside, though, the matter is far more complicated than the free-speech arguments suggest.

Do not be deluded: Repealing or even just relaxing the Johnson Amendment would have a disastrous impact. ...

Efforts to repeal or relax the Johnson Amendment should be strongly resisted, regardless of political view. Let the courts decide the extent to which the Johnson Amendment goes too far. But unless we know of a constitutional imperative to reshape the law, it is better to keep politics out of charity.

Washington Post op-ed: Trump Wants to Force You — the Taxpayer — to Pay For Campaigning From the Pulpit, by Ellen Aprill (Loyola-L.A.):

Even if the law has its intricacies, the principle behind it is straightforward: If an organization, such as a house of worship, accepts favorable tax treatment, they’re being underwritten by the taxes you and I pay. Which is fair enough, but then we, the taxpayers, shouldn’t have to pay for their partisan political speech that we may not agree with.

Nevertheless, Republicans continue to push for a reversal. On Wednesday, Sen. James Lankford (R-Okla) introduced the “Free Speech Fairness Act,” that would amend section 501 to permit houses of worship (and other nonprofits) to electioneer during the course of any presentation made during religious services or gatherings. In his words, “The federal government and the IRS should never have the ability to inhibit free speech,” adding that his bill “is needed to prevent government intrusion and suppression of free speech by removing a restriction on speech that has existed since 1954.”

The problem, however, with his argument is that it undermines a bedrock principle of our campaign finance system: All political contributions are taxed at least once. Political contributions from individuals are not deductible and businesses cannot deduct them as a business expense. It doesn’t follow, then, that a tax-exempt organization should be able to receive a government subsidy via the tax code if their partisan political activity turned that tax break into a de facto contribution. Indeed, contra Lankford, government intrusion would come into play if nonprofits could avail themselves of favorable tax status at the same time they were engaged in partisan political speech. ...

[R]eligious institutions and other nonprofits have an assortment of options that allow them to pursue their core mission and engage in partisan politics under the existing tax code. Destroying the Johnson Amendment wouldn’t meaningfully enhance the First Amendment freedoms of houses of worship. It would underwrite political speech in a way that violates the fundamental premise of our campaign finance system.

Andrew R. Lewis (Cincinnati), Most People — And Perhaps Most Clergy — Don’t Want Political Endorsements In Church:

The public shows little support for clergy electoral politicking, the IRS has studiously avoided enforcing the prohibition, and clergy that we have data from disclose opposition to and almost no engagement in the practice. Why then is Trump talking about the Johnson Amendment? The answer is simple: It is valuable as almost purely symbolic politics. It rewards Christian right organizations and elites who have attempted to make this an issue in the past decade and in the recent election cycle. That doesn’t mean that clergy opinions and behavior won’t change if the law changes, but based on the evidence, we see that shift as unlikely. Clergy lead diverse, nonpolitical organizations, and bringing politics into the pulpit can cost them members on the margins.

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Church leaders might not endorse specific candidates, but depending on whether they chose to spend more time talking about abortion, or homosexuality, or about helping the needy, they can make it pretty clear which candidate they think their congregation members should vote for.

Posted by: Politics in Church | Feb 3, 2017 12:57:07 PM