Before I begin I hastily acknowledge the current tax bill
will sabotage
the Affordable Care Act, greatly
increase inequality, cripple
grad students, mortgage
our countries future, and was practically
written in crayon.
In addition to all those horrible things, I think it may
also harm “Blue State” congregations such as my own.
I imagine it will be a one two punch. The capping of
deductions for property tax and state/local tax (SALT), and the changes to the
standard deduction, will put a real squeeze on congregations such as my own
(for two articles on this click here
and here).
New Jersey has the highest
per capita property tax rate of any state and our state and local taxes
aren’t exactly low either. Therefore a lot of New Jersey folk rely on not being
taxed on the money they’ve already been taxed on. The capping of such
deductions will hurt
states like New Jersey especially hard.
The doubling of the Standard Deduction will likely scramble
charitable donations, changing the giving patterns of 25% of taxpayers
(30,000,000 people), with 8% of Protestants saying this will cause them to
decrease their giving, all of this likely leading to a decrease of charitable
giving of between 4.9
billion and 13 billion. Essentially, giving by the very rich would be the
only kind our country’s tax system would reward.
Now that’s a lot of stuff… what might this all look like to
an average person giving to a congregation?
I can see the line of reasoning going through a person’s
head. “Oh, hey, it’s December, Christmas is coming. I always drop a surprise
$5,000 in the collection plate… but it was kinda a rough year, I paid an
additional 1,000 bucks in federal taxes this year on account of not being able
to take my usual SALT deduction… I can’t even deduct that $5,000 like normal,
because the family would have to give away $24,400 in order to do that… I’d
love to give that kind of money away, but I can’t do that… I think maybe it
makes sense to just give $3,000 this year, instead.”
No malice from this person, just a squeeze on account of
property taxes and our tax system discouraging generosity. But what’s the
ripple effect? Last year the average confirmed person in my
congregation gave $731 for a total of $130,849... with that information let’s
play with three scenarios:
-In one, that “8% of Protestants”
fits my congregation like a glove, and they give 10% less. In that case, my
congregation would be short $1,022.
-In the second scenario,
let’s assume the 25% of people who will be affected by the Standard Deduction
stuff are really rattled, because they’re in Jersey and the property tax change
hurts them, 25% of my congregation gives 10% less, then we’re short $3,450.
-In the third there is a
genuine run on the bank, those 25% are not just rattled, but really hurt by
these tax changes and give 25% less. In this case we’d be short $8,235
Now, those might sound like small numbers to you big church
folk who have it all figured out, but our total operating expenses were
$141,969 that year and as it is we’re hustling. I’ve been told most
congregations that do the kind of stuff we do have a $200,000 budget—we’re hustling,
but an extra 1,000 dollars of hustle, or an extra $8,000 of hustle—that becomes
a real hurdle.
All that to say, I worry about this tax bill and how it may reshape American society.
