List members should know that there is a debate about taxation of corporations. That is, a corporation gets taxed on its profits, then the profits are again taxed when they are dispersed in some form to the owners of the corporation (shareholders). Thus, every dollar Alpha Corporation earns as profit (roughly, sales revenues minus costs of doing business) is taxed at the corporate rate, which is roughly 40-45%. Federal and state. Not counting property taxes, energy taxes, etc. Then the profits are dispersed, in some cases, to the owners and shareholders, in the form of dividends or the like. This "income" is then again taxed, at rates between 35 and 45%, again depending on the state and other circumstances. Bear this in mind when thinking about taxing churches or other charitable contribution-based entities. At 11:38 AM -0700 11/5/97, Brandon Crosby wrote:

While I do not want a debate over tax exemptions in churches, 'Free Speech' may very well involve supporting canidates for positions in a democracy. This is the very basis for elections. However, one begins to question this reasoning when a church leader attempts to get into the government, using the church's tax exemptions, for either support of the church, support of self, or some illegal (or, at least, unethical) mix.

Should churches be tax exempt? Without their long history of helping people, I doubt they would have any benifits. However, even if their privillige was removed, they would simply be able to donate less money to community causes.

(There's an important difference between "taxing churches," i.e., applying the income tax to churches, and eliminating the "tax deduction" for charitably contributions. I assume the discussion has mostly been about taxing churches, based on the comments about "taxing them into penury." Tax deductibility has not been an important factor for many to consider, I believe, due to the complications of claiming the deduction, the limits on deductions, etc.) Most churches operate mostly on charitable contributions. So, imagine that the Mormon Church, for example, loses its tax-exempt status and must pay income taxes. Imagine a worker for Novell, in Utah. Novell pays 40% of profits in taxes and, for this example, disperses the rest. The dividends or proceeds of sales of stock are taxed at about 30%. A Mormon employee gives money to the Mormon Church.. The Mormon Church pays 30-40% on this "income" (perhaps less "expenses"--churches are going to have to act like corporations!). (By the way, one of the big problems with taxing churches on income is this very issue: what counts as a "profit" for the church?) Do the math: the initial dollar earned by Novell has been taxed 3 times (to multiple tax collectors, federal, state, and maybe local). And 75% of it has been taken in the process. This is the danger of taxation in general, and taxation of donations in particular. As to what the church does with the money, who cares? Another way of looking at a church is as a pooling of donations to accomplish some end, e.g., saving souls, getting the U.S. out of Viet Nam, removing bad engrams, etc. Why should people who have already been taxed twice (first the corporations, then their dividends) be forced to pay a third set of taxes just because they are donating? Oh, and the same logic applies to a political action committee. It doesn't make sense. Which is why we can expect to see it in the tax code next year. --Tim May The Feds have shown their hand: they want a ban on domestic cryptography ---------:---------:---------:---------:---------:---------:---------:---- Timothy C. May | Crypto Anarchy: encryption, digital money, ComSec 3DES: 408-728-0152 | anonymous networks, digital pseudonyms, zero W.A.S.T.E.: Corralitos, CA | knowledge, reputations, information markets, Higher Power: 2^2,976,221 | black markets, collapse of governments. "National borders aren't even speed bumps on the information superhighway."