The fat is now in the fire. A group has taken the Catholic Church into Federal court to protest its tax exemption. The reason? The Church has taken a public stand against abortion. The abortion issue is political, and therefore involves legislation, the plaintiffs assert. The Internal Revenue Code says that tax-exempt organizations that are involved in political lobbying must lose their tax-exempt status. Therefore . . .
A district court denied the claim, and the case has been appealed to the U.S. Supreme Court. The Court has decided to hear it. The justices will probably do their best to find some way to decide the case on narrow technical grounds in favor of the Church. The political repercussions of removing the Church’s tax-exempt status would be immense. It is unlikely that the Court will require this. But then how will the Court uphold the IRS principle of allowing tax exemption only for non-political (non-lobbying) organizations? The Court has a real problem.
There is no doubt that some priests have preached from the pulpit that abortion violates the law of God and is therefore immoral. There is no doubt that the Church has been active in trying to get legal limits placed on abortions. The Catholic Church is identified with the anti-abortion issue, even though not many of its parish priests have been active in the right-to-life movement. (if Catholics voted as a bloc on this issue, and consistently voted against all incumbent politicians who publicly compromised on this issue, abortion would no longer be a major political issue in the U.S.; it would be made illegal.)
The Court must deal with a fundamental constitutional question. It must find a solution to the question: is the tax exemption of churches sacrosanct — a sacred sanctuary — or is it merely a privilege granted by the IRS to those churches that conform their preaching and activities to guidelines in the Internal Revenue Code? Ultimately, this is the issue the Court must deal with: Which is the sovereign agent, church or State, or are both equally sovereign? Legal sovereignty in this case is visibly manifested in an institution’s legal ability to escape taxation. The church clearly cannot legally tax the State. Can the State legally tax the church? This issue has been debated for centuries in the West, and the issue has obviously not yet been settled.
Taxation and Sovereignty
“The power to tax is the power to destroy.” So said Chief Justice John Marshall in his famous decision in the case, M’Culloch v. Maryland (1819). The state of Maryland had imposed a tax on all bank notes issued by banks not chartered by the state of Maryland. M’Culloch, the cashier of the branch Bank of the United States in Baltimore, refused to pay the tax. Two legal questions were involved:
First, did the U.S. government have the right to charter a private bank? Second, was a state tax on such a bank constitutional?
Marshall relied on Hamilton’s arguments favoring a U.S.-chartered bank. This was a tragic mistake on Marshalls part, a mistake we are still living with. It was a secondary issue, however. The other question — taxation — raised the crucial legal question of sovereignty. Immunity from taxation is a mark of original sovereignty, Marshall concluded. There can be no question regarding Marshall’s decision: he saw the case as a political conflict over ultimate legal sovereignty.
If any one proposition could command the universal assent of mankind, we might expect it would be this: that the government of the Union, though limited in its powers, is supreme within its sphere of action. This would seem to result necessarily from its nature. It is the government of all; its powers are delegated by all; it represents all, and acts for all. Though any one State may be willing to control its, operations, no State is willing to allow others to control them. The nation, on those subjects on which it can act, must necessarily bind its component parts . . . The government of the United States, then, though limited in its powers, is supreme; and its laws, when made in pursuance of the constitution, form the supreme law of the land, “anything in the constitution or laws of any State, to the contrary, notwithstanding.”
Because the issue was sovereignty, Marshall and the Court declared the tax unconstitutional, for Maryland’s action had challenged Federal sovereignty.
If the States may tax one instrument. employed by the government in the execution of its powers, they may tax any and every other instrument. They may tax the mail; they may tax the mint; they may tax patent rights; they may tax the papers of the custom-house; they may tax the judicial process; they may tax all the means employed by the government, to an excess which would defeat all the ends of government. This was not intended by the American people. They did not design their government dependent on the States . . .
The question is, in truth, a question of supremacy; and if the right of the States to tax the means employed by the general government be conceded, the declaration that the constitution, and the laws made in pursuance thereof, shall be the supreme law of the land, is empty and unmeaning declamation.
Should the Church Be Taxed?
Now, let us go back to this declaration by Chief Justice Marshall and substitute a few words. All of a sudden, things become clearer, judicially speaking:
If the States may tax one instrument, employed by the Church in the execution of its powers, they may tax any and every other instrument. They may tax the tithe; they may tax the building; they may tax baptisms; they may tax the communion meal; they may tax the Church’s judicial process; they may tax all the means employed by the Church, to an excess which would defeat all the ends of ecclesiastical government. This was not intended by the American people. They did not design their churches dependent on the States . . .
The question is, in truth, a question of supremacy; and if the right of the States to tax the means employed by the Church’s government be conceded, the declaration that the Bible, and the laws made in pursuance thereof, shall be the supreme law of the land, is empty and unmeaning declamation.
(For the rest of my article, click the link.)