Since before last year’s election, Donald Trump has promised the religious right he’d deliver on one of the movement’s top priorities: allowing houses of worship to engage in partisan activities without fear of losing their tax-exempt status. To that end, Republican legislation to change federal tax law has slowly been working its way through Capitol Hill this year.
But that bill may not be necessary. GOP policymakers have also included repeal of the Johnson Amendment, the tax law provision that prohibits church politicking, in the Republican tax plan. As a strategic matter, this makes sense: the proposed tax cuts aren’t especially popular, so it stands to reason GOP officials would try to generate some support from their Christian conservative allies.
Late last week, however, The Hill noted that House Ways and Means Chairman Kevin Brady (R-Texas) made some changes to the tax plan, including one big one related to non-profits and political activities.
Under the amendment, churches and other nonprofits with 501(c)(3) tax-exempt status would be able to engage in political speech from 2019 to 2023. The initial bill would not have had a sunset date but would have only applied to houses of worship, rather than all 501(c)(3) organizations.
Let’s unpack this a bit. Under current law, tax-exempt houses of worship that engage in partisan political activities risk losing their tax exemption. Under the initial Republican plan, the law would be changed to allow ministries to intervene in elections and keep their tax-exempt status anyway.
Under the latest GOP proposal, which passed the House Ways and Means Committee on Thursday, all tax-exempt groups – houses of worship, universities and other educational organizations, charities, publications, etc. – could engage in partisan politicking without fear of punishment from the IRS.
In other words, every U.S. non-profit that is now, by law, non-partisan could start endorsing candidates, aligning with super PACs, contributing to political parties, etc.
Faced with a controversy over their efforts to repeal the Johnson Amendment, Republicans managed to make their effort quite a bit more radical.
And why should anyone care whether every tax-exempt entity starts getting involved in partisan politics? Because as we discussed over the summer, the consequences have the potential to be dramatic.
Imagine the campaign-finance mess that would exist if parties, candidates, and PACs could funnel campaign donations through tax-exempt entities, free of oversight.
For that matter, imagine if a foreign government, eager to secretly help put a specific candidate in power, decided to start funneling money to specific non-profit organizations – including churches – knowing that those entities would in turn use the resources to support that candidate. The 501(c)3 groups would never have to disclose any of this, and the public would be kept in the dark.
The GOP proposal fixes a problem that doesn’t exist. There’s no public demand for such a change, and there’s no reason to create this campaign-finance nightmare.