How to lower taxes

Purple Economy

We would all like to reduce the amount of tax we pay. So it’s no surprise that tax cuts are now often promised by political parties during election campaigns. Of course, the downside is that tax cuts could lead to cuts in public services like health care and education.

But I think there is a way of reducing taxation without influencing government services. I have just started reading the book The Purple Economy by Max Wallace which makes clear that in New Zealand part of our taxation is used to subsidise religious activity by providing tax exemption to religious organisations. Dr Wallace points out that “tax exemption for religious organisations is a subsidy from government which makes it effectively a tithe on the entire tax-paying population of New Zealand.”

This is an important human rights issue because we are all effectively financing supernatural organisations with which many of us disagree – and we have not been consulted about this! It is also important because the exemptions mean money is being diverted from more useful purposes which would benefit all New Zealanders.

Subsidies for advancement of religion

I was shocked to find out that the NZ Income Tax Act defines the “advancement of religion” as a charitable purpose which can be used to claim exemption from taxation. The Charities Commission helpfully provides examples of the wording which can be used to claim exemption:

“…to advance and teach the religious tenets, doctrines, observances and culture associated with the [specify faith or religion] faith – or

…to preach and advance the teachings of the [specify faith or religion] faith, and the religious tenets, doctrines, observances and culture associated with that faith

…to establish, maintain and support a house of worship with services conducted in accordance with the tenets and doctrines of the [specify faith or religion] faith

…to support and maintain missions and missionaries in order to propagate the [specify faith or religion] faith

…to establish and maintain a religious school of instruction for children, young people and adults

…to establish and maintain a religious day school

…to produce and distribute religious materials

…to advance the [specify faith or religion] faith by providing spiritual and educational resources to pastors nationally and internationally

…to advance and teach the religious tenets, doctrines, observances and culture associated with the [specify faith or religion] faith by establishing a facility to be used for religious programmes, workshops, music and bible studies.”

Let’s remove discriminatory tax privileges

Now, I think most of us agree with providing tax relief to genuine charities. But this list is very different to what we usually understand as charitable activities. And they are activities restricted to just one sector of the population – those with religious or supernatural beliefs. As Max Wallace suggests the “growing numbers of non-religious people in New Zealand mean that tax privileges for religion are discriminatory. Non-religious people must pay tax, they cannot opt out of subsidising the privilege afforded to religious organisations through tax exemptions.”

It’s even worse. Religion is defined for the purposes of tax exemption as

  • a belief in a supernatural being, thing, or principle
  • an acceptance of conduct in order to give effect to that belief.

So we are being forced to subsidise the promotion of the supernatural!

I know some people might interpret my disgust at this situation as representing a desire to undermine religion. That’s not the case. I am perfectly happy for religious people to participate in worship, build churches, employ pastors, provide superannuation schemes for their minister, print and distribute literature, teach their beliefs, etc., but let them do it at their own expense. Let them finance it the way that non-religious people do – without special exemption from taxation.

Let’s have a level playing field. Let’s do away with these special privileges. And let’s free up some of this money, which we have all contributed, so that it can be used for the benefit of all New Zealanders

See Also:
The Purple Economy (International Humanist and ethical Union)
Purchase The Purple Economy

Related Articles:
Human rights for the non-religious
New Zealand supports evolution
Thank God or Thank Goodness?
Discrimination at school
Religion and Schools
Special rights for religion?
Destiny of Christian privilege?
Trends in religious belief in New Zealand

14 responses to “How to lower taxes

  1. Captain Skeptic

    Does this mean I’m finacially supporting the Destiny Church for believing in the supernatural being of Bish’ Brian Tamaki? Do you think he will pay me back or let me borrow his hot tub?

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  2. How would you determine the difference between genuine charity performed by a religious group and advancement of their beliefs? Would they have to set up a separate charitable trust?

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  3. Yes, Captian Skeptic. We are all contributing financially to the likes of Destiny church, the Jehovah’s Witness doorknockers, etc. if they are registered for tax exemption. And their activities – promotion of supernatural beliefs – are tax exempted according to our laws.

    I guess a charitable trust is the way to go Damian. To be consistent with our human rights legislation there should be a way of separating true charitable activities from the ideological and business activities.

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  4. Another isseu with supernatural charities, i.e. churches, is that they provide no books for anyone to scrutinise their spending. If they had to pay tax like the rest of us they would need to open their books to the IRD to clearly identify which part of their income was spent on real charity versus running their church. An estimate from the USA – the only estimate I could find on Google – suggests that over 70% of church income is spent on running the church itself.

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  5. Interesting post Ken.

    Out of interest, and I’m guessing you’ll have some knowledge on this… what’s the tax status of the NZ Association of Rationalists and Humanists?

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  6. Actually, Frank, I don’t know for sure (I’m guessing they don’t have exemption). I am not yet a member (I’m not a “joiner”) – although I have finally decided to join up (partly as a result of this issue) and sent off my application the other day.

    Perhaps somebody who is already a member can give us the information. A search of the Charities Commission register shows no registration for organisations containing the words humanist or rationalist.

    Non-religious organisations may possibly be able to get exemption for work on “relief of poverty” or education. But they would be excluded from the criteria of “advancement of religion” because this requires belief in the supernatural and promotion of such – the complete opposite of NZARH rationale.

    This special privilege for religion seems to go back to the Charitable Uses Act of 1601 – a historical anomaly which conflicts with our human rights legislation. However, powerful forces (financial and ideological – not divine as far as I know!) seem to be at work because this privilege keeps getting confirmed by court decisions in NZ and UK.

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  7. servantsthoughts

    It certainly is an interesting issue. Of course, I believe that “religious” (for want of a better term) pursuits are largely beneficial for the community (and I know that’s debatable), thus I have no problem with the tax status, especially since it is the beneficial aspect that defines the charitable purpose. In saying that, I am acutely aware that there are groups that abuse the privilege, thus if a good framework could be put together to better scrutinize what happens, I would be supportive of it.

    It saddens me that NZARH cannot achieve the same status though, as I believe it has the ability to contribute in a beneficial manner…. though it’s greater purpose seems to be framing itself as a “religious watchdog” rather than providing practical and tangible benefits… I’m thinking foodbanks, city missions, programmes for the poor etc etc that churches often provide… along with the often natural outcomes of religious affiliation such as overcoming addictions etc…. it is these benefits that have the ability to reduce government spending in areas such as health, welfare etc. But I have no doubt the NZARH has the ability to outwork itself in such areas, thus I’d be open to discussions to rework the understandings in this area so they become more inclusive. I’d be happy for my tax dollars to offset the work of the NZARH because I believe it offers a needed voice…. even if I disagree with the world view and it largely speaks against my own.

    The idea of separating charitable activities from idealogical activities is a good one. But then we hit discussions about how those charitable activities come about…. they come about because of idealogical activities first, thus the first often leads to the second.

    It’s a murky area with lots of permutations, but certainly worth discussing.

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  8. That was me by the way 🙂

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  9. “I’d be happy for my tax dollars to offset the work of the NZARH because I believe it offers a needed voice…. even if I disagree with the world view and it largely speaks against my own.” Interesting approach. I wish we were all so accommodating. I suspect, however, that most religious people would be extremely unhappy about the state subsidising the advancement of atheist and humanist ideas. Although, it’s interesting that very few non-religious people are protesting about the current situation – perhaps they are just not aware of it.

    In the absence of a consensus for state subsidy of the advancement of both atheist and theist ideologies, I think the only way, consistent with our human rights legislation, is to separate ideological and charitable activities. Ideology should have nothing to do with it – I think we all have charitable aspirations whatever our ideology.

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  10. Hi Ken & others,

    the NZARH pays tax and rates etc. as we are a non-profit organisation, not a charity.

    Promotion of belief in the supernatural is classified as charitable, however it seems that promotion of non-belief in the supernatural is classified as propaganda by the Charities Commission.

    I would be interested to know what would happen if the Brights applied for charitable status purely on promotion of a naturalistic worldview. It is common for humanist groups applying for charitable status to be compelled to do some thing other than simply promote humanist ideology in order to get charitable status, whereas religious groups need not do so.

    regards
    Elizabeth McKenzie
    President, NZARH

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  11. Thanks for that information Elizabeth.

    Reading more of Max Wallace’s book I am aware that the problem is wider than just income tax exemption. Exemption apparently also applies to local body rates. I’m not sure about fringe benefit tax. The later could be quite significant as much of the remuneration of ministers of religion could be in the way of fringe benefits.

    I can’t see that the Brights or any other naturist group could get exemption on the basis of promoting their world view because being non-supernatural it would automatically be excluded.

    However, perhaps a group like the pastafarians, worshipers of the ,Flying Spaghetti Monster would be acceptable

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  12. Pingback: How we all subsidise creationists « Open Parachute

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  14. Pingback: Avoiding tax – supernaturally « Open Parachute

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