At Thursday’s National Prayer Breakfast, President Trump renewed his campaign pledge to repeal — in his words, “totally destroy” — the Johnson Amendment, a provision of our tax code that prohibits charitable entities, including churches, mosques and synagogues, from intervening in campaigns for elected office, at the risk of losing their tax-exempt status.
Bad idea, Mr. President.
Current law already permits religious leaders and religious organizations to express their views about candidates without undermining our campaign finance laws. What they can’t do is express those views on the taxpayer’s dime. Doing away with the Johnson Amendment would undermine the principle that all campaign finances are taxed at least once, placing taxpayers in the unreasonable position of subsidizing the partisan agendas of religious entities.
On the campaign trail late last year, Trump said, “The Johnson Amendment has blocked our pastors and ministers and others from speaking their minds from their own pulpits. If they want to talk about Christianity, if they want to preach, if they want to talk about politics, they are unable to do so. If they want to do it, they take a tremendous risk, that they lose their tax-exempt status.” Indeed, they might. But if you read between the lines, it’s clear that he knows, or at least he should, that the Johnson Amendment doesn’t prevent clergy members from talking politics, it just imposes the caveat that clergy can’t talk politics while also accepting the subsidy that the tax code provides tax-exempt houses of worship — a trade-off that Congress has consistently, and correctly, ratified.
Future president, then-Senator Lyndon B. Johnson introduced this limitation as an amendment to section 501(c)(3) when the senate took up the 1954 Internal Revenue Code. Congress amended it in 1987 to clarify that the provision prohibited opposition, as well as support, of a candidate, in the process reaffirming its support for the prohibition overall. In 1996, Congress enacted a provision imposing an excise tax on political expenditures by section 501(c)(3) organizations, again indicating support for the ban. Successive attempts to loosen the prohibition for houses of worship have failed.
In its 2000 holding in Branch Ministries v. Rossotti, the D.C. federal circuit court noted, “The government has a compelling interest in maintaining the integrity of the tax system and in not subsidizing partisan political activity, and Section 501(c)(3) is the least restrictive means of accomplishing that purpose.”
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.
Lankford, Trump and others would likely argue that a clergy member’s sermon involves little direct cost, and therefore any subsidy is negligible. But such speech is still the product of and supported by a tax-exempt organizations eligible for tax-deductible contributions.
Abandoning current prohibitions would open the door to abuses. Posting sermons and other communications on congregational Web pages and distributing them through social media are now common practices. Campaign endorsements or public statements of opposition by houses of worship have the potential for wide distribution in our digital age. New organizations could form specifically to engage in campaign intervention while operating as houses of worship.
And to engage with the political process, religious organizations don’t need to change the law. They already have the option of starting affiliated 501(c)(4) social welfare organizations that are tax-exempt, but not allowed to receive deductible contributions.
While 501(c)(3)s cannot engage in campaign intervention, 501(c)(4)s can, so long as such intervention is not their primary activity. Many section 501(c)(3)s form affiliated 501(c)(4)s. Religious organizations can form 501(c)(4)s. Although it took many years to succeed — the organization’s voter guides, that it wished to distribute in churches, initially didn’t have IRS approval — eventually, the Christian Coalition received recognition as a 501(c)(4). Pairing 501c3s and 501c4s is the way groups ranging from the Sierra Club to the National Rifle Association are organized.
When a 501(c)(3) establishes an affiliated 501(c)(4), it is obligated to keep operations and finances separate. (One has to pay the other fair market value to use its staff, facilities, etc.) It can, however, control the 501(c)(4) by appointing its board members. These 501(c)(4)s can, in turn, form organizations which engage primarily in campaign intervention (such organizations are sometimes PACs, which are regulated by the Federal Election Commission, or section 527 organizations, which engage in a broader range of campaign activity than that regulated by the FEC and IRS). Moreover, in their individual capacities, members of the clergy retain their First Amendment rights to support or oppose political candidates. The IRS even permits clergy members’ affiliations to be listed in campaign ads and written materials for the purpose of identification.
In other words, religious 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.