Taxes, charity, and religious freedom

Elder Dallin H. Oaks, a leader in the Church of Jesus Christ of Latter-day Saints, recently testified before a Congressional committee about the importance of the charitable deduction on taxes.

[youtube]http://www.youtube.com/watch?v=22XHmK2bvkM&feature=player_embedded[/youtube]

His message focuses on the important contributions made by churches and other nonprofit agencies, which are funded by donations that are at least partially prompted or facilitated by the tax deduction.

However, he hits on a really important point around 4:30 into the video, when he talks about how some people believe the charitable deduction is effectually a tax expenditure, "because tax revenues are reduced by the benefit granted. in other words, because the gov't could have denied the charitable deduction, there is a government expenditure in its granting the deduction and foregoing the revenue."

He puts that idea into context this way:

By that reasoning, the personal income we think is ours is really the government's because of its choice not to take it away by taxation. that is certianly an attitude not shared by most Americans.

That hit home with me because I have long believed that taxation is a subtle way of impending on religious freedom.

When people talk about the erosion of religious freedoms, they usually talk about Christmas trees being banned from city hall and a lack of teacher-led prayer in public schools. But neither of those things prevents me from living my religion.

But what if taxes sometime became so high that they impended my ability to participate in religious activity?

For example, some churches (including mine) teach the principle of tithing, which states that you should give one tenth of your income for God's purposes. A friend of mine who served a mission in a European country a few decades ago told me that people would ask him whether they should pay their tithing on their income before or after taxes---because after taxes, they did not have 10 percent of their pre-tax income left over.

What if taxes became so high that people could not afford mission trips? What if people could not afford to build churches, or even to travel to a church that is more than a few blocks from their home?

Of course, this is not the case now in America. But if taxes continue to rise, and if tax deductions for charitable donations are lowered or stricken, that would significantly change people's ability to participate in faithful religious activity.