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3 religious issues to watch during the tax reform debate

POSTED: November 12, 2017 9:19 p.m.
Kelsey Dallas/

Tax reform proposals are working their way through the House of Representatives and Senate.

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Republican leaders in both houses of Congress have put forward tax reform plans, proposing major changes to corporate tax rates and deduction rules. As they struggle to pass a bill by the end of the year, they'll face a number of potential roadblocks, including people of faith.

"The 'Tax Cuts and Jobs Act of 2017' contains many fundamental structural flaws that must be corrected. As currently written, the proposal is unacceptable," wrote leaders from the U.S. Conference of Catholic Bishops about the House's tax bill.

Religious organizations and individual members of the clergy have expressed a number of concerns about the current proposals, emphasizing the need to protect poor and middle-class Americans. They're worried about shifts that could politicize church pulpits or shrink the budgets of community nonprofits that serve the poor, homeless and others in need.

"Tax plans are moral documents — as much, or more so, than budgets," wrote Peter Laarman, a United Church of Christ minister, for Religion Dispatches.

Proposed reforms are still in flux, and the final version of the tax bill likely won't take shape until next month. But here are three issues on religious leaders' radars.

1. Politicking from the pulpit

President Donald Trump has had faith-related tax regulations in his sights since his campaign, regularly promising pastors that they would soon be free to be more politically active.

"I will get rid of and totally destroy the Johnson Amendment and allow our representatives of faith to speak freely and without fear of retribution," he said at the National Prayer Breakfast in February, addressing the tax code provision that prevents nonprofit organizations from endorsing or collecting donations for political candidates.

The tax plan proposed by House GOP leaders fulfills part of this promise, enabling clergy members to deliver speeches or sermons from the pulpit either in favor of or against politicians.

"The idea, in other words, is to permit pastors to give a sermon that endorses, say, Donald Trump for re-election. But organizing phone banks or door-to-door canvassing, or taking out ads or publishing materials on a candidate's behalf would still fall within the ambit of the Johnson Amendment," wrote Mark Silk for Religion News Service.

The news was met with mixed reactions, as Reuters reported. Although more than 4,000 faith leaders have signed an open letter to Congress opposing changes to the Johnson Amendment, conservative pastors say current rules run counter to religious freedom protections.

"It is evangelical Christians — who have become increasingly more engaged in the political process in the past 25 years — who have clamored the most loudly for the change," the article noted.

Since the first version of the House tax plan was released on Nov. 2, policymakers have clashed over proper limits on faith-based political activism. First, Rep. John Lewis, D-Ga., moved to block the proposed change, and then Rep. Kevin Brady, R-Texas, acted to allow not just houses of worship, but any nonprofit, to endorse or oppose candidates.

2. Financial support for adoptive parents

People of faith speak with a more unified voice on potential changes to adoption-related tax policy. Numerous leaders and groups decried the proposed end to the adoption tax credit.

"Looks like House leadership wants to double down on removing (the) adoption tax credit, all while funding Planned Parenthood. This move hurts children, adopting families and actually costs the (government money) in the long term. Insane," tweeted Russell Moore, president of the Ethics & Religious Liberty Commission of the Southern Baptist Convention.

The tax benefit enables adoptive families to receive up to a $13,000 credit after completing the adoption process.

"According to the Department of Health and Human Services' Children's Bureau, the cost of private agency domestic adoptions — medical and legal expenses, home studies, etc. — may range from $20,000 to $45,000," The Weekly Standard reported.

Moore and other faith leaders were baffled by Republican support for ending the credit, since it's a such small component of federal expenditures and has bipartisan support.

"The federal adoption tax credit is a tiny sliver of federal spending — the $300 million spent annually equals less than 0.01 percent of the federal budget," The Weekly Standard reported.

On Thursday, GOP leaders restored it in the version of their bill passed out of the House Ways and Means Committee. The Senate tax plan also preserves the credit.

3. Tax benefits for charitable giving

The third faith-related repercussion created by early versions of the House and Senate tax plans is more subtle, involving a benefit offered to families or individuals who don't itemize their taxes. House and Senate Republicans want to boost the standard deduction.

"The (House) proposal would increase the standard deduction — the amount of household income that is not taxable if no other deductions are taken — from $12,700 to $24,000 for a couple, and from $6,350 to $12,000 for individuals," Quartz reported.

This change might reduce charitable giving, since fewer people would take advantage of related tax breaks, NPR reported.

"Una Osili, of the Lilly Family School of Philanthropy at Indiana University, estimates that a change would lead to a reduction of up to $13 billion a year in charitable giving, and 28 million fewer Americans itemizing their returns. She says it doesn't mean people would stop giving, just that they're likely to give less," the article noted.

Although this piece of the proposed tax reform might not affect the amount of money dropped into church offering plates, it could derail contributions to social service programs.

"Perhaps unintentionally … the plan risks crippling charitable giving," wrote Bishop Frank Dewane, chairman of the U.S. Conference of Catholic Bishops' committee on domestic justice and human development, in an Oct. 25 letter sent to the Senate and the House of Representatives.
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