During his 2016 campaign, Donald Trump promised his Evangelical supporters that he would eliminate the Johnson Amendment, a law that has barred tax-exempt charities from weighing in on political candidates since the 1950s.
Trump reiterated his promise at the first National Prayer Breakfast of his presidency, telling the audience he would “get rid of and totally destroy” it. In July 2017, he claimed success, signing an executive order designed to do just that.
Taking credit for eliminating the Johnson Amendment turned out to be premature because doing so requires an act of Congress. But some Republican lawmakers are stepping up.
As a law professor who studies how the tax law impacts churches, I believe that repealing the Johnson Amendment could alter electoral politics by making it easier for people to anonymously funnel tax-deductible donations to political candidates. And even if that doesn’t happen, its repeal could prove tremendously damaging to the very churches that Trump was apparently trying to help.
The Johnson Amendment
Technically, the Johnson Amendment prohibits charities from supporting or opposing candidates for office. This ban covers a spectrum of actions, ranging from endorsements made out loud or in writing to giving candidates money. Charities that violate this prohibition lose their tax exemption and may get fined.
But charities don’t have to stay out of politics altogether. Nonprofits lobby all the time, both to protect their own interests and to further their missions.
And that lobbying is not subject to a blanket prohibition. Rather, it is subject to a second restriction: The activities cannot constitute a “substantial” amount of a charity’s work measured in time and money.
Trump appears to be only care about getting rid of the Johnson Amendment, however.
And on July 19, the House of Representatives showed it was ready to help him fulfill his campaign promise when it passed an appropriations bill with a provision that would effectively declaw the Johnson Amendment.
Rather than repeal the measure, this provision would bar the IRS from spending any money to enforce it. Without any threat of being subjected to Johnson Amendment enforcement, churches would become effectively exempt from it.
But first the Senate would have to approve the measure.
Religious freedom
In case you’re wondering, for tax purposes a “church” is an organization that has several of the attributes on a list developed by courts and the IRS, even if people wouldn’t commonly think of it as a church.
Most Christian, Muslim, Jewish, Sikh, Buddhist and Hindu houses of worship conform to this official definition. So does the First Church of Cannabis.
Johnson Amendment opponents argue that it infringes on the religious and speech rights of pastors. Clergy, they say, have a religious duty to oppose political candidates they find morally unacceptable and to back candidates who will further their churches’ missions. The Johnson Amendment prevents them from doing that.
But not all religious institutions would welcome this tax policy change.
The movement to revoke the Johnson Amendment has been spearheaded by the Alliance Defending Freedom, an organization formed to protect and defend the legal rights of Christians and Christian churches. A vocal group of conservative white Evangelicals also supports this effort.
Since 2008, in fact, the alliance has sponsored Pulpit Freedom Sunday, during which participating pastors preach a sermon in which they endorse or oppose a candidate for office. They then send the IRS a copy of their sermon, challenging tax authorities to revoke their exempt status.
Interestingly enough, not a single participating church has been punished. In fact, in the nearly 65 years that the Johnson Amendment has been part of the tax law, I’m aware of only one church that has lost its exemption as a result of violating the Johnson Amendment. Even without repeal, the Johnson Amendment is almost entirely unenforced.
But the lack of IRS enforcement doesn’t mean that the Johnson Amendment is ineffective, or that it has no impact on church behavior. The law is on the books, even if it is unenforced, and it probably discourages at least some pulpit politicking.
Deducting dark money
Should this policy change, I see two big downsides to allowing churches to endorse endorse candidates.
First, donations to churches are deductible but not political donations. If churches could hand candidates money from donors, the government could be effectively subsidizing political gifts.
This would make those donations a bargain for political donors, at least those who are the biggest earners. And doing away with the Johnson Amendment for religious organizations could potentially invite widespread campaign finance laundering through churches.
Second, unlike other charities, churches aren’t required to make financial disclosures. Thus, should political donors take advantage of the enforcement vacuum, on top of potentially getting a tax break, their donations would be anonymous.
Already, hundreds of millions of dollars of what’s known as “dark money” is moving to campaign coffers during election years. Without the Johnson Amendment, donors who want anonymity could use churches to make dark money contributions.
Of course, churches would still face constraints on their ability to funnel money to political candidates even if Congress votes to repeal the Johnson Amendment. Their political activities – including donations for candidates – would still have to be an insubstantial part of their activities.
Any churches that become nothing more than conduits for political money would still be vulnerable to losing their tax-exempt status. As long they spend sufficient time and money on worship and other religious activities, though, they would be free to use a new influx in donations to support or oppose political candidates.
Religious opposition
Which is why thousands of religious leaders oppose repeal.
Without the excuse to stay out of politics the measure gives churches, politicians could pressure religious groups for endorsements. Large donors could demand that the church back specific candidates in exchange for monetary gifts.
Consider this hypothetical situation involving a pastor who does not want to endorse a particular candidate despite a donor’s demand. Perhaps she personally opposes the candidate. Perhaps she worries that injecting politics will sow discord among congregants. Perhaps she has another reason.
Sure, politics must be an insubstantial part of the church’s activities. But mentioning a candidate once during a 15-minute sermon, or even once during every sermon, would not be a substantial part of the church’s activities.
Currently, the Johnson Amendment would require her to decline a gift in exchange for her endorsement. Without it, that excuse vanishes.
By allowing churches to funnel deductible dark money into politics, I believe that repealing the Johnson Amendment would hurt America’s democracy. Even if that doesn’t happen, I fear that repeal could damage churches, their missions and their communities.
Samuel Brunson, Professor of Law, Loyola University Chicago
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