Render unto Caesar

This week at Sunnyside Troy ponders the tax exempt and what would happen if they weren't...

He also apologizes for not putting out his newsletter yet which is forthcoming and of course you can still join by simply following this link: https://lp.constantcontactpages.com/sl/so8PkyQ

Transcript

SPEAKER_01 0:00

Hello, friends and neighbors. Welcome to light. Well after shining brightness, I'll end with charts. Let's craze the place where love ignite.

SPEAKER_00 0:17

Hello, friends and neighbors, and welcome to Sunnyside. Happy to be with you today. And uh just a couple days after celebrating America's 250th birthday, and what a wonderful weekend it was uh in our part of the country. It rained on uh the 4th of July in the morning and into the early afternoon, but then the uh the day warmed up, the rain stopped, and uh, if you're like us, uh many folks uh we were out on the lake and we were enjoying time with friends and family and just uh celebrating America's birthday together and enjoying our our freedoms uh and looking forward to another 250 years. We are a quarter of a millennia old, and uh with God's grace, we will be able to continue in that uh ever uh popular and wonderful motion forward to celebrate our freedoms and maintain them. And as it's been said, we're just always one generation away from um yeah, from from losing those freedoms. So it's our responsibility, each and every one of us together, to um to just to make sure that those things that our founding fathers worked so hard to create for us uh are able to be maintained. And so uh I hope you had a fantastic uh 4th of July, Independence Day weekend, the birthday of our country, the celebrating of the uh independence, uh the declaration of independence, and what bold characters it took to uh make that happen, the risks that were associated with it, and that um each and every one of us uh should commemorate as we do each and every year. And it's just uh things but but it is just about my favorite holiday. Thanksgiving is actually my favorite holiday. Fourth of July is right up there uh behind it, and I do of course love Christmas. But why is Christmas the third one? And uh those other two secular ones are in front. I don't know, I don't know. Easter should probably be at the top, right? Resurrection Sunday. Let's put that at the top and move everything down a notch. Let's do it that way. Well, I uh I have to apologize because if you've been listening to the program last week, I think I said, No, I know I did, I said, that uh we were gonna send the newsletter out on uh Tuesday of last week. It was gonna come out at the end of the month of June, uh, which would have been on Tuesday, and I didn't do it. Uh I didn't uh do it because I was uh I didn't have all the videos made, and I didn't have I still don't have all the videos made that I want to share with uh our newsletter subscribers, but I am working on that now and will be out this week. I do have to do some things, help out my son Tanner. Uh I've been working on some projects. Uh the chicken house is almost all done. The chickens are in it. I've got a video that I will put together, and that'll be in this newsletter that will come out this week. You'll see that some of the operations that we've got with the cattle and a little bit about what's going on at Sunnyside Hollow, the new pasture that we're developing in our ponds and so on and so forth. But I um, you know, it just takes time to put all that together. I thought in my brain, this is how I do everything. You think in your brain, right? Uh I thought that I would have it all put together and I would be like, there's no problem. I'll set myself a ridiculous time frame. I'll go ahead and uh try to make this uh deadline, and I failed myself and you, and I'm so sorry. But I did see that more of you did sign up for the newsletter. That's great. That's uh that's as long as you want to be at the new look, it is coming out this week, I promise. And I've got some cool videos that I'm gonna put together, and I'm working on uh getting that editing done. I'm just sorry that it took so much longer. I started working on this this hen holler project for the hen house like oh a year, uh over a year ago, and uh I finally am just about done with that. Just got a couple more things to paint in the foyer because why doesn't a hen house have a foyer? You'll see why. If you subscribe to the newsletter, keep building it up and building up and then not sending it out. Don't worry. Look, it's probably gonna be this way. Um, I will try to get a newsletter out every single month. I'll put that together amongst all my other projects that I've got going on, just so you can see what's going on here at Sunnyside that I always talk about. And again, that's just for the newsletter subscribers. So I'm not really trying to sell you anything. Obviously, there will be opportunities for people to know when we have certain things that are available for sale, whether it's the beef or the chicken or the different projects that we've got going on in the shop or whatever it happens to be. But that's not the real uh the range. The range is just to, you know, for the folks that have been listening, enjoy the show and the program. I want to be able to show you uh what I'm doing. And then down in the road, down the down the road, I'll have uh smaller versions of videos that I will just put out on YouTube for the general public. Uh, but that that uh private YouTube channel is just for the subscribers, so you get the longer version, uh, see what it is uh of you know that I'm working on and the things that I've been talking about and probably some other things as that develops. So I'm really excited about it. I don't have it done. It's like every other project that I've got going on. Uh they're just uh, you know, it's a slow process. So be patient. I'm a one-man operation in most cases, and uh and uh I do it is coming out this week, and I'm very excited because I just did some filming today um that uh is uh concluding the tour of Hanhalla. So that'll be out and you'll be able to see what it is that we've been doing here. Um yeah, so all of that. I apologize again for not putting it out. I set these deadlines for myself and then frequently don't meet them. I'm really good at estimating materials and costs, but I'm just way, way, way off when it comes to time. Just terrible at the whole timing thing. Uh so be patient. I appreciate uh your interest and thanks for signing up for the newsletter. If you haven't done so yet, you'll be able to click on the link in the show notes again. And that and then you'll be a part of our family, and we'll be able to tell you all the things that are going on and coming up that uh everybody else doesn't necessarily get the insights into on the show. But today's show is something different, celebrating 250 years of America. It's been uh it's just been such a wonderful journey. I was explaining to my kids, to our family, our friends, and everything told it uh it's like, hey, you know, uh uh if you're lucky, you get to experience kind of two of these big celebrations in your life. Uh I was about a year and a half old when uh we had the bicentennial in uh 1976, and uh and so I maybe two years. Um and I, you know, I don't remember it. My wife is just a little bit older than me. She does remember it, got great pictures uh of uh her and uh of course the community, small communities and can just like this year, you know, towns all over celebrating the 4th of July. And of course the bicentennial was a big big year. She's a little girl and she was all dressed up and um you know celebrating, had her trike or her bike all decorated by her dad, uh America stuff in 1776 and the spirit of 76 and all that good stuff. And so um that was that was uh you know, uh that's a true childhood memory for her, and now here we are at the 250th, and we've both had the opportunity to uh be uh around for the bicentennial and now the semiquasca centennial. Is that what this is called? I'm not exactly sure to what 250 years is. And so, but we're not gonna see 300. I'm sorry. I mean, it's not gonna not gonna happen. So we've been lucky to see um these two big celebrations in our life, and we hope that our kids will all see it, you know, they'll have two as well. We're hoping that that you know, every 50 years, you know, we kind of make a big deal of it, and we should, uh, as long as things keep uh running smoothly. And so it's a it's a memory for the kids. Um, they'll be able to think back just like we can and say, I remember that. Um, and uh my kids were like, You're not gonna be around for 300. I'm like, man, I'll be like 102 years old. Uh I don't think that's gonna happen. So we're just uh happy that we get what we get and uh and that we continue doing the things that we need to do as citizens and neighbors and friends as uh Americans and just uh taking care of one another, which is what I want to talk about today. Um this is kind of a weird take, and of course you can expect that from me. Maybe you've never thought of it before, maybe you have thought about it, maybe you're going to vehemently disagree with me on this, and I'm not as you know, I'm not sold on and I've just been thinking. Um it came to my attention as I was looking into other things because I'm um uh I'm president of a couple of 501c3 organizations. Uh you raise money and you put those right back into the community uh directed towards your mission, whatever it happens to be. And of course, I've uh, you know, as as a as a Christian, uh, you know, you look at our churches and and they are tax-exempt organizations. We have lots of tax-exempt organizations. I did an episode a couple of uh weeks ago uh after Stacy Besch had lost her run for the state senate and just kind of explained how 501c4 organizations, which are kind of those PAC and those political organizations, what they're involved with, um, and how they um, you know, can manipulate uh certain things in in our elections, in our primaries, and so forth. And uh it just kind of all got me looking into these tax exempt. I'm like I said, I'm the head of two organizations which are tax exempt. I'm the also the president of a school board, uh, you know, it's a government entity, a public school, and so those are tax exempt. Um, you know, and so I went to a private uh college which was you know tax exempt, and and tax exemptions are great, and tax exempt organizations are very useful. I think the small organizations that do not have paid staff uh that are entirely comprised of volunteers are fundamental to the success of um this our communities. Look, we talk about federal and we talk about you know state issues sometimes on this program. Um, but the best business, the best governance, the things that are going to affect your life and mine the most are always at the most local level. Uh the decisions that are made by the uh the county supervisors or the city council or the local school boards or whatever it happens to be, and and our state legislators to an extent, like those are the things that affect you and me the most, uh, even though the federal government makes all of us pull our hair out. Um it's those lower entity government agencies that that uh affect things. And of course, they all survive on taxes, and you know how I feel about property taxes and taxes in general. And so I'm not a tax expert, I'm not a uh an accountant, I'm you know, I'm not a tax preparer, um, just a citizen um out here on the farm, just like you know, you, wherever you happen to be. And I wanted to talk about this whole tax exempt situation because uh one of my pet peeves is organizations that collect a lot of money, and uh I heard a statistic that something like 94% of the funds that are generated for a lot of these, particularly the big organizations, including enormous churches, are not spent as you would expect them to be spent, but rather they're spent on the their employees, their benefits, their their infrastructure, their buildings, their pro you know, and and and and not necessarily on what is the mission. Now, the two organizations um that I happen to be the president of, um, both related to sports in the local community, uh, those organizations are entirely volunteer driven, and all of that money goes towards either the teams or team uh that we're supporting, that is written in our charter. And I get irritated when I hear things about large not you know nonprofit organizations that are not turning that money over. It's it's not a good investment for folks that are honestly giving their money to um organizations. And in and this honestly includes churches, um uh and and the rules that have been written into the tax code that allows um uh organizations to own auxiliaries, particularly religious organizations that can auxiliary organ uh items that allow them to be investments and they own real estate and they own all that. I mean it which it's it's an astounding situation. And so I think that the best organizations that are um tax exempt, the charitable organizations, are the small ones, the ones that are uh they don't have paid employees, um, they're not worried, you know. Uh how many college kids have uh it's been on the upturn in the last 20 years that have graduated from our you know higher education institutions and their dream is to work for a nonprofit. And I think that they expect to be like rich from doing that, which is problematic. Uh so their hearts are in the right place, but they want to work for a nonprofit. And so we're gonna talk about uh the tax exempt status today, and I've got some thoughts on it, um, and we'll see where it ends up, but um, stick with me. Uh it's probably not something that you expected to talk about necessarily right after the 4th of July, but it's been on my heart and my mind for a little while, and I just want to get into it with you and have this conversation. So let's start with defining what exactly tax exempt status actually means. So the Internal Revenue Service, the Federal IRS, grants tax exempt status under Section 501A of the Internal Revenue Code. And while the most recognized category is 501c3, which is a charitable organization, the IRS actually recognizes nearly 30 distinct types of tax exempt organizations. And those are primarily outlined in the IRS publication 557, which I'm sure that you've all read and are tracking right along with me. And they're categorized below by their structural purpose. So let's talk about them. First of all, the charitable ones, the religious, the educational organizations, 501c3. You hear that a lot. It's the largest category of tax exempt organizations. Donations that are made to such organizations as these are generally tax deductible. We all like that for the donor. And when you get a tax deduction, it's gonna be based on your income tax rate. So, like if you give $100 and and uh you're at a 20% tax rate, for example, um, then you're gonna get uh it's like an 80, you get 20 20 bucks back if that if that makes sense. That's how that works. And so the IRS takes these 501c3s and they break them down specifically into three types. And I'm sure you're familiar with these, and I'll explain them a little bit as we go through it, just so you kind of know what what we're when we say tax exempt organizations, what we're actually talking about. So, first off, the public charities, those are subsidized by uh you and me, the general public, um, or sometimes government grants. Um, and these public charities can include churches, schools, hospitals, and food banks, so on and so forth. Then they're also uh in the 501c3 category, there's private foundations. Now, those are typically funded by a single individual or a family uh or corporation, and their primary focus is to distribute grants. So they're taking some money that they have and um and and giving it away um in in uh in the form of a foundation, a private foundation. Then there's the private operating foundations, slightly different. These are entities that spend the bulk of their funds um just actively running their own charitable programs. So slightly different. You have private foundations, which are kind of more like of a single use, single individual family or corporation, and then there's private entities that make up private operating foundations, uh, but they all give away money and they're all tax deductible for the people who give money to them. Then there's also social and welfare civic organizations. Um, these are entities that are focused on community improvement and advocacy, which is a nice way of saying um things like civic leagues and special or social welfare uh or veterans organizations. These are not usually tax deductible. Uh, they're not tax deductible. These are 501c4s, which are uh promoting community welfare, civic good. This is where your political advocacy come advocacy comes in. Um, you know, you got your volunteer fire departments that are part of the 501c4 stuff, the advocacy groups, et cetera, et cetera. 501c19 are veterans groups, so think the American Legion, VFW, MVET, so on and so forth, groups that are composed primarily of past or present members of the U.S. Armed Forces. Tax exempt, but not tax deductible. Then there's the uh membership labor and trade associations, also tax exempt. These organizations exist to serve uh shared professional, economic, uh, recreational interests for their members. So 501c5, you got your labor unions, your agricultural unions organizations, horticultural things like that, uh, farm bureaus, collective bargaining groups that are designed allegedly to improve working conditions. And then there's the 501c6 organizations right after it, which is part of this group. And those are business leagues, and that's where your chambers of commerce go. Again, tax exempt, not tax-deductible, trade associations, real estate boards. They're all aimed allegedly at improving industry-wide business conditions. They do a lot of good most of the time, you think, but you never know. So those that's the that's 501c6, and there's 501c7, and then that's your social and your recreational clubs. So these are like hobby clubs, member-only groups, country clubs, uh, college frats and sororities, and they are again tax exempt, organized for pleasure and recreation. 501c7. You didn't even know, but I'm going through them. Speaking of fraternal orders, your benefit uh societies like the lodge system folks, those are 501c8. Um, those are fraternal beneficiary societies. So they provide now, 501c8 will provide life, sick, or accident insurance benefits to its members that belong to a fraternal lodge. And when you think of lodges, you're thinking like masons and elk and moose and uh so on and so forth, the odd fellows. These are groups that are um slowly, unfortunately, fading. The fraternal groups used to be a big thing in America. Um, they've they've really, just like church membership and so many other organized uh things such as that that are charitable uh or fraternal, they're kind of going uh by the wayside. Everybody's seeing a decline in membership, and that's frustrating. Uh, it's just unfortunate how we are as an American site. We're just not joiners like we used to be. Um, and there's some good reason for that, uh, probably some cynicism, but uh, you don't see as many uh, you know, the the the Elks Lodge and the Moose Lodge and some of these organizations. Some communities are able to hold them together really well. I think Rotary might fit into that and different groups like that, the Lions and so forth. But they're just not as popular as they used to be, uh, and they do good work. But they fall under 501c8 if they provide life sick or accident insurance benefits just to its members that are part of that lodge system. Then there's 501c10, and those are the domestic fraternal society. So they do operate under that lodge system, but they don't provide insurance benefits. Instead, they devote their money that they get, the earnings that they come in uh through charitable donations, uh, they give those to charitable causes, fraternal causes, things like that. So your rotary would be involved in that kind of that stuff and a lot of the elk and the moose. You know, if they're not providing insurance uh to its members that are special to that group, then it's a 501c10. And then there's 501c9, so jumping back one, which is like a voluntary employees benefit associate the uh benefit beneficiary associations, those are called VIBAs, I guess, uh V E B A. And those are the funds that are pro created to provide uh life sick or accident insurance to its employee members. Okay, so you're a member of a lodge and the lodge has paid employees, uh, those become VIBAs, and that money is for their life sick or accident insurance, whatever it happens to be. All right, there you go. There's also um a fifth category, financial trust and infrastructure organizations under the tax exemptions. Um, these are specialized corporate entities that are formed under specific federal parameters to act like a holding company uh or a credit system. So under the 501c1, you'll have corporations that are organized under an act of Congress, and that's like federal credit unions or instrumentalities of the United States. There's 501, those are title holding corporations. Again, tax exempt, not tax deductible. They're entities that are organized for the sole purpose of just holding title to property for an exempt organization. Uh 501c14 is state chartered credit unions, you know, mutual reserve funds that uh don't have capital stock. And 5017 are supplemental unemployment benefit trusts, which are trusts that are set up to pay for supplemental unemployment benefits to employees. Again, everybody wants to work for a nonprofit, apparently, and so the employee benefits, and we'll we'll discuss how these this is problematic, in my opinion. So you have your miscellaneous uh category, alternative exempt subsections in the IRS, uh, get some exemption, uh give some exemption status to some uh niche cooperatives and political structures such as 501D, uh, which would be religious and apostolic associations. Those are religious communities that share a common treasury, thing, you know, like a commune sort of type of deal. Uh cooperatives, 521A uh would be like your farmers' cooperatives, like we have here in small town America. Uh, those are cooperatives that market products or purchase equipment for regional farmers, and they are tax exempt as well, uh, but it's not tax deductible. And then uh under this category comes 527. That's where your political organizations belong. Those are where your actual PACs are. So not 501c4, but 527 political action committees, um, PACs, parties, committees organized to accept contributions specifically for political campaigns. Definitely not tax deductible. And in most cases, I don't think they're very good, but that's where they go, and they are tax exempt. So they're not paying taxes on any of the money that they generate so that they can spread their truth. If you want to call it that. No, probably not. So the four most common types that I just said, just in review, 501c3, that's charitable, religious, educational. Uh, they're supposed to have broad public benefit, and that is deductible. 501c3 is deductible for you, the person who donates money. 501c4, those are your social welfare and civic leagues. That's for community advocacy, and those are not generally deductible. 501c5, you got your labor and ag, that's better work and farm conditions improvements, not deductible. 501c6, those are your business leagues and your chambers of commerce. They're supposed to improve industry conditions, also not deductible. The IRS and state regulators monitor all of these tax exempt organizations through standardized annual information returns and public disclosures. And while these organizations are they are exempt from federal income tax, sometimes they face strict reporting rules to maintain their status in general to the federal government and sometimes also to the state. The IRS requires most tax-exempt organizations, by the way, to file this annual return information. And it's the specific form, specifically the 990, that depends on the organization's gross receipts and their total assets. So there's a few of them. There's the 990N, it's just like an electronic postcard. That's for organizations with less than 50 grand that they get an annual amount of money. The two organizations that I share are in that category. There's the Form 990 EZ, which is a short form, and that's for the mid-size organizations. They have gross receipts under 200 grand, but they have total assets under 500,000 grand. So one organization, we might be into that easy form. So the Form 990, which is the full return, is meant for the big organizations, uh charitable and otherwise, that fall under this tax exempt category. And they've got gross receipts annually of 200 grand or more, and or assets of 500 grand or more. And they do require extensive disclosures on their governance, their programs, their finances, you know, subject to auditing, all of that stuff for those big charitable organizations. And then there's one more category, the Form 990 PF, which is the mandatory one for private don foundations. It doesn't matter what size uh financial returns they get each year. So that's the Form 990 PF. Anyway, um, here's the fun part churches and integrated auxiliaries, which we'll talk about a lot more, such as their churches' conventions or associations of the churches, completely exempt from filing the annual Form 990 of any type. So an integrated auxiliary of a church, just to be clear, that is a legal classification that's defined by the IRS for tax-exempt organizations that are closely related to a church or a convention or synod, however you want to call it, uh, of, or association of churches, but they do not function as a standalone congregation. So because they are considered to be a direct extension of a church's ministry, integrated auxiliaries, which is what they're called, are granted the same tax privileges as churches, which means they're not required to file an annual Form 990 at all. So to be recognized, we're going to come back to that, believe me. To be recognized by the IRS as an integrated auxiliary, um, an organization has to strictly satisfy three distinct tests. And they don't seem like they're that hard to satisfy. The first one is they have to be a 501 and they have to pass that public charity test, which means that the organization has to be recognized as a tax-exempt entity under 501c3, and they have to be classified as a public charity rather than as a private foundation. That's the 501c3 public charity test. The second one is the affiliation test. The organization has to be structurally connected to a church or a convention or association or synod of churches, and this is demonstrated if the entity is covered by the church's group exemption letter or if it is directly operated, supervised, or controlled by church leadership. So there should be a board or people with appointment powers, that type of thing. And the third test is the internal financial support test. So the organization has to derive more than half, more than 50% of its financial support from the internal church sources, like direct funding from the mother church, tithing, donations from church members in general. And it can't come from fundraising from the public, government grants, or commercial services. So at least half of the money has to come from basically the church folks giving the money up, uh, and it has to pass that internal financial support test for it to be um okay as an integrated auxiliary uh part of uh under that 501c thing for a church. Why is this important? Well, here's some examples. The IRS explicitly recognizes several types of organizations that are considered integrated auxiliaries, which only applies to churches. And they are generally uh in two broad buckets. One, they're automatically uh accepted groups, so there's no financial support test that is needed, and because the IRS acknowledges that certain core religious structures inherently rely on external funding. Um, so under the Treasury regulation, the following entities you know that I'm gonna talk about qualify as an integrated auxiliary based solely on their religious purpose and church affiliation, even if they get their funding from somewhere else, outside sources. So things like seminaries, uh, schools of divinity, a theological training school that's controlled by a specific denomination or association of churches to train pastors and their missionaries. Uh, mission societies, speaking of which, organizations that are sponsored by a group of churches to send missionaries to foreign countries or run local outreach networks. Those count as integrated auxiliaries. So whatever they're doing over there, sending the missionaries out, we're sure they're doing good work, and they're never, and they're completely unreportable. Um, and then there's the internal church auxiliary groups. This is the third category that the IRS recognizes as integrated or automatically accepted groups. And so the internal church auxiliary groups are that local church-governed men's group or women's group or the youth fellowships or you know, the specialized discipleship groups, whatever that happens to be. Then there's other ministry extensions that they do have to pass some sort of financial support test. So they're not just, you know, no support test needed in the first category. So like if an organization conducts a broader charitable educational or a media operation, say a church has a big media deal, it can still qualify as an integrated auxiliary, but only if it is church controlled and it receives more than 50% of its funding internally, still coming from the members. So you've got things like the church-controlled religious schools, you know, the local K-12 Christian Academy or parochial school that operates directly uh from a church uh locally. Uh, its funding is coming almost entirely from that church, subsidation, subsidization and and and member tuition. Um, you got your local mercy ministries, right? The church-controlled things like a food pantry, a benevolence fund, or the clothing closet that's funded, for example, by uh entirely by the congregational tithes to serve the local neighborhood. And then there is the denominational pension boards, which is always interesting. Uh, I think things got worse when pastors got paid. But anyway, separate legal entities, you set up an association of churches uh that are solely there to manage the retirement and health benefits for pastors and the ministry staff. And we're gonna see that the staffing, not just in churches, but in general, I've mentioned this already. Uh, staffing and paid employees of these nonprofits is just shockingly expensive. And it really kind of twists and turns upside down what it is that you think you're giving your money to, what the actual accountability is, you know, percentage-wise, of each and every dollar that we donate to these organizations in the 501c3 category, even. So um if it it's not an integrated auxiliary, if uh so independence from the church control applies, it automatically disqualifies an organization. So if there's uh also you know large public-facing operations that do rely on, say, government funding or broad public fees generally, they typically fail to support that internal test. Uh that means they just have to file the standard form 990. So you got to report those things. So there are some large church uh organizations, for example, in the U.S., uh uh uh whether it's Catholic or Lutheran or Methodism and all these different that have uh they do a lot of it's kind of one of the things that Elon Musk was looking at uh with the you know, with with sort of the funds that they received from the government to do some of the work, particularly with um uh you know um refugees and that type of thing. So they do typically have to file the 990. Doesn't mean that they're they're not paying any taxes on it, but they do have some accountability for it, mostly because they're getting a lot of money from uh other things outside of the church, particularly the federal government. Also, if you're a hospital or a nursing home that's affiliated with a church or an associated group of church, even if they're part of a religious denomination, uh they have to file because they are primarily funded by the patient fees uh or insurance fees um or Medicare, right? So they just they're disqualified from that auxiliary status. They're making money and they have to up, you know, they can still be tax exempt, but they still have, but they have to a little more scrutiny on those organizations. And then there's these things that are like faith-based community organizations, um, which are standalone sort of church organizations, maybe like a Christian uh homeless shelter or uh domestic abuse clinic, stuff like that. They operate independently of any specific church board, and they rely on corporate sponsorship sometimes or a lot of times, or city grants or county grants, they are not an integrated auxiliary. Now you know. And I'll tell you, what does all this mean? Who cares? Why are we even talking about this? And it's gonna come down to dollars and cents and how it's being used. And believe me, stick with me, it's gonna make sense, I hope, in a second. Well, maybe a little more than a second. If all of the tax-exempt organizations in the United States were just they weren't tax exempt anymore, they were stripped of their exempt status and they were taxed, say like a non-exempt corporation is, then the federal government would generate somewhere between 40 to 55 billion dollars in additional tax revenue annually. We're only talking about income tax based on corporation levels, right? Not on the property taxes, those are localized, state, and things like that. This is just at the federal level only. So you can extrapolate from there, which I'm not going to do today. We're just going to be talking about this uh amount of money. But that $40 to $55 billion is based on um something significantly larger. Okay, so if we're talking about um uh these are all corporate bodies, they just happen to be tax-exempt corporate bodies. So they're uh they are corporations, churches are corporate entities, um, but they are not paying, they don't pay taxes, they're separate. We'll talk about why in a second. So while the whole tax exempt sector um makes up an enormous economic engine for the United States, it's uh when I say enormous, like how much money annually is estimated that we give to tax exempt organizations as as a country. You and me, you know, writing a check, dropping some money in the plate, supporting an organization that's you know, someone, some sort of 501 organization. It's three point nine trillion dollars annually. Three point nine trillion. That's what Americans give. If people ever say that we're selfish, say, well, there's three point nine trillion that we're giving of our own money annually to all these little organizations, my couple of little organizations that that we run in the community and all of the other wonderful things that are going on in each community and then nationally and so forth. 3.9 trillion dollars. So the tax exempt sector that's a lot of money. 3.9 trillion total annual revenue. Now the vast majority of that money we hope is immediately spent on things that those organizations are advertised to us that they're supposed to be doing with it, whether it's to our local church or to a you know, whatever organization happens to be, you know. $3.9 trillion dollars. But the vast majority of that is in it's spent immediately. So you got your operations costs, your wages, a lot of that, and and then hopefully the actual programs that they're supposed to be running, they they they spend that majority of the money of that three point nine trillion on those things. And we hope that the majority of that is spent on the programs that are meant to benefit the communities uh and so forth that they're serving. But the actual revenue um would depend so so so so they're not retaining $3.9 trillion as profit. So if you're using a corporate tax structure, you can only tax profit. Okay, so $3.9 trillion isn't isn't profit the way it's it's codified. The actual revenue depends on how the corporate tax rules are applied uh to the unique financial structures in this 501 category and and so forth. So I'm gonna hopefully not make this more confusing, but corporate tax income is is levied on net income, which is so all the money that a corporation takes in, any business, minus the deductible expenses for the business. It's not the gross revenue. So 3.9 trillion is gross, it's not net. The entire tax exempt economy, which includes our hospitals, our universities, our charities, our credit unions, that brings in roughly $3.9 trillion annually. But after they pay their employees, they maintain their buildings, their infrastructure, their grounds, they've got their programs that they are supposed to be funding, and they do the entire tax exempt sector's combined annual net surplus, what they are left with, which is what in in the business world you call that net profit, is about $210 billion. So $3.9 trillion gross, $210 billion net. And so if you were to apply the federal 21% corporate tax rate directly to that $210 billion surplus annually, if you were to tax them on that, it would be about $44 billion hypothetically in federal revenue. But the benefits of tax exemption um are highly concentrated in a very few highly commercialized profit-generating nonprofit sectors. So they they're nonprofit sectors, but they're generating profit. And so according to tax policy research from institutions like the Mercatus Center and the Tax Policy Center, the government could recapture the most revenue from these specific sectors in there, the nonprofit hospitals and healthcare systems. That's $10.7 billion annually if you tax their operational net surpluses. You got your federal credit unions, which are 501c1. Those are uh joint committee on taxation estimates that they're if you took the credit union exemption away, that generate about $4 billion per year because of the net um uh tax uh 21% tax rate. And then you're uh also the private and public universities, private and public universities, believe it or not. So taxing those tuition-driven surpluses and massive endowment investments, uh, particularly their payouts, would again, at the corporate rate, bring in about $1.7 billion annually from your private and your public universities. Then you're the voluntary employees beneficiary associations, remember the Vebas that we talked about? Uh, if you tax the investment income on Vebas, that that they they're the ones that fund their employee benefit trusts, that would generate about $31 billion over a five-year window, uh, just because of their, you know, generating the paying out and and and essentially um working with employee benefit trusts, $31 billion over five years, so about six billion a year. So the big variable here is um what counts as taxable income. Um if there was, and obviously this would all take legislation if you were ever to attempt, if uh if the United States was ever to attempt to take away some of this tax exempt status uh for these tax exempt organizations, if that legislative shift had a does occur, lawmakers they'd have to resolve just a huge accounting dilemma. They'd have to decide are charitable joint uh are charitable donations considered taxable corporate revenue, uh in which case we'd it'd be about $50 billion. So in a standard corporate accounting, you'd find an investor that gives money to business to help it run, that is considered a contribution to capital, which is not taxable revenue. But if the IRS treated charitable donations and say public grants that total about $550 billion to $900 billion annually as capital contributions, uh those would then still remain untaxed based on that contribution to capital. Uh the government then would only tax the net profits from program services, so like hospital fees or college tuition. And that would then yield your what I talked about earlier, that $40 to $55 billion is the is the estimate annually. Um donations that are treated um as gross revenue, if we did it that way. So if we said if the government aggressively treated every donation that was given to every tax-exempt organization currently, whether it was a donation or a tithe, a foundation grant, whatever, uh if we tax that as taxable corporate income, then the sector's gross revenue would spike drastically. But these are smart people running these organizations. Uh nonprofits would then probably just immediately counter this by aggressively writing off 100% of their charitable program expenses. And so the actual net taxable profit would likely be about the same. It probably wouldn't change anything. So about that $40 to $55 billion. If you would think so, I'm going to go ahead and tax that uh $3.9 trillion or whatever it is as gross revenue and count it. Um, it doesn't work because you could still write off 100% uh for program expenses. But it's not like these organizations don't pay taxes because I don't want you to come at me from you know an angle, maybe you're a treasurer for an organization like this. Like, hey, we pay taxes. It's common misconception that tax exempt organizations pay zero federal tax. Nonprofits that are already integrated into the federal tax system um by other alternative mechanisms. So you've got your payroll taxes, right? All these employees that they've got, they still pay payroll taxes. They've got their unrelated business income tax, like if a charity uh makes money from an activity unrelated to its core mission. For example, like if the university, uh, which is tax exempt but it sells commercial ad space, they have to, they they pay a corporate tax rate on that of 21%. Uh, and then there's excise taxes. So the private foundations that we talked about, they pay specialized federal excise taxes that they get on their investment income. And that's about $734 million for the IRS annually. So it's it's not like they're not paying, uh, but it's very specifically related uh to um those those key items. Um here's the problem. About 94%, almost 95%, 94.62% of the $3.9 trillion gross tax exempt economy we talked about is spent on operational expenses. Like I said, paying your employees, maintaining your infrastructure, directly funding your community programs, which is what we want them to do. It's hard to break out, though, what that is all the time. Like how much is it actually? Are you, you know, do you have a lot of people that you're paying to be a part of this? And some of it's going to the local food, whatever it happens to be. Not blaming the local food bank. But that means that out of the total sector revenue of tax-exempt organizations, collectively, they spend $3.69 trillion of that $3.9 trillion just to run their operations. And that leaves that net surplus of $210 billion, which is about 5.38%. So you're, you know, is that what you would tax if that were the case? But to put this, I guess, into some perspective, the internal allocation of that 94.62% of expenses, say that bucket over there with almost 95% of the money, that typically falls into three categories according to the IRS. It's programmed services, which we hope, and it's in that 70 to 75% range. So program services is what we're hoping for. And again, if we're going to talk about churches, this is not a this is not churches that we're talking about. We'll come back to churches. This is the other organization, you know, that we're talking about. So the vast majority of the budget goes directly toward, you know, filling those tax exempt that organization's purpose, uh, which is that 70 to 75% range that they're saying. You know, you give it to the gridiron club, you know, at least 70 to 75% should go to that. Well, we don't, for example, the Waldorf Gridiron Club, we don't have any paid employees, so it's like 99%. That's almost everything, right? Goes to the football team. Um, but you know, unfortunately, program services, quote unquote, that's 70 to 75 percent, includes like the university professor's salaries, their benefits, their medical supplies for those nonprofit hospitals. We got research grants that are given out, and then you got your direct community aid, which is what we all want. Not that those other things aren't important. I'm not saying that people shouldn't earn a living, but I mean that's included in that 70 to 75 percent of program services. Your management and general operations of these organizations is like 15 to 20 percent of their revenue, and that covers your administrative expenses that are you need to keep the organizations running. Like you need HR departments, I guess. You got to have your IT people, you got your rent for your office space, your utilities, your legal compliance, executive salaries, that's where that goes. Yeah. That's 15 to 20 percent of of these organizations, not including churches. We'll come back to that. Then there's the fundraising costs, and that wraps up the rest of the less, you know, say two to five percent. And that represents it's really a small portion of the expenses, but that's you know, you have to you have to sometimes spend some money to solicit the public donations. You gotta write the grants, or sometimes you gotta pay right grant writers, and then if you're hosting these fundraising events, whatever that costs, as you're trying to generate this future revenue. So it kind of breaks down program services management, general operations, and fundraising costs. The most expensive being program services, which you would think sounds like what the programs are to the community, but it actually is, again, mostly just paid employee stuff, not including management. That 5.38%, which is that $210 billion, is not spent uh during the fiscal year, typically, they're gonna carry it over. Um, and you would do that because it's because you you got other things you need to spend it on in the future. You gotta save for a rainy day. And unlike a corporation that you can invest in, it's not distributed to shareholders or the owners. Um instead, uh, you know, the IRS recognizes that these organizations want to reinvest the surplus directly back into the organization. So they'll typically put it in cash reserves, CDs, that type of thing, just in case economic downturns come. Um it's used to fund future capital expansions, like if you want to build a new hospital wing or something like that, you're saving up for that. Or it's placed into things like university endowments that generate, you know, long-term investment income at the same time. So when you talk about the billions of dollars that Harvard has, or even Grinnell here in Iowa, lots of money, a billion-dollar endowment. Well, um, there's that that's that's where those that surplus is kept. And it continues to grow, which is what you want it to do. So uh these tax-exempt nonprofit organizations, particularly the churches, though, and their are uh their integrated auxiliaries, remember those things, uh, it's just a huge part of American fiscal policy. And it's also part of constitutional law, which we're going to talk about a little bit uh regarding constitutional protection. The arguments in favor of maintaining the status of tax exemption uh is rooted, um, some would say in the combination of social economics, uh, constitutional protections, and just practical governance, I suppose. So for religious organizations and their integrated auxiliaries, which would be things like ministries, seminaries, mission societies, et cetera, the strongest argument is just right there in the First Amendment of the U.S. Constitution to remain tax exempt. So the power to tax is the power to destroy. We're going to talk about this a lot in the next few minutes. And this is a famous legal doctrine that argues that if the federal government has the power to tax a church, well then it gains the leverage to control, penalize, or shut down religious institutions that voice unpopular beliefs. And their exemption ensures, allegedly, true government neutrality. And it also avoids excessive entanglement. So if the IRS were to audit a church's religious activities to determine what are taxable profits, for example, versus what were uh permissible religious deductions, the state then, a secular state, would become deeply entangled in defining what constitutes a legitimate quote unquote religious expense. And the tax exemption, then in that status for churches, draws a pretty clean line that keeps the state out of church finances. Um if you, you know, we love these tax exempt uh situations for all of these organizations for a variety of reasons, um, particularly the tax deductibility part and the 501c3 category, and churches fall into that. So supporters argue that the tax exempt organizations provide those essential public services and they do it more efficiently and compassionately than the federal government ever could. I concur. Um you've got things like uh local ministries, the food pantries, the homeless shelters, the church-run daycare centers, and those groups pick up the slack where the government programs always inevitably fall short. If these entities were taxed, well, then they would have fewer resources, which would force the government to step in, and then they would have to fund these services directly using taxpayer dollars. Um, the efficiency factor, right? Uh boots on the ground is the concept. Neighborhood churches and their auxiliaries, they're right there, you know, boots on the ground. They can identify and react to a local crisis like a sudden um layout at a regional fact, layoff at a regional factory or a natural disaster occurs. We've seen that many times. And they can do that much faster than a bureaucratic federal agency can, which we also know is true. Then there's um the concept that nonprofits are fundamentally different from these commercial corporations that are taxed, and that's because they lack owners or shareholders. Most churches. I don't know. So under the IRS uh rules that there's no individual or legally uh no individual can legally profit from a tax-exempt organization's net surplus. Because any that's any money that's left over, remember that 5% surplus that we talked about, has to be legally reinvested back into the community or the organization's mission. And taxing that surplus yields no public benefit, apparently. It simply just shrinks the pool of capital that'll be available for the public good. Tax exemption uh then fosters a vibrant civil society uh under the way things currently stand by allowing diverse groups of citizens to organize around shared values without financial penalty from the state, the big state. They apply equally to all recognized organizations, they uh whether they're small, alternative, or minority religious groups and the community associations receive the same protections as you know the great big massive establishment institutions. So there's some you know, pluralism in that regard and some um some balance. Congregations and civic organizations and groups they serve as a place like a social hub. Uh they promote volunteerism, you hope. They get the mental health support uh that you need. Uh there's community cohesion, and they're, you know, really kind of creating an intangible amount of economic value that far outweighs the estimated, what do we say, $40, $55 billion in in what would be foregone tax revenue is an argument that you would say in favor of keeping these organizations tax exempt, and particularly, you know, churches. So there's a constitutional, economic, a structural, and a social argument uh that benefits society for keeping things the way they are, and kind of why they are the way they are. But the debate that surrounds tax exemptions for religious institutions has intensified in recent years, and this got me to thinking. Critics argue, for example, that historical justifications for these exemptions, they don't align with modern economic realities, or transparency standards, or the principle of church state separation, believe it or not. The primary arguments, or the counter-arguments, and the criticisms against tax exemptions for churches and their integrated auxiliaries, which is very suspicious to me, include things like the transparency and accountability thing. The unlike the secular 501c3 groups, like the nonprofits that aren't churches, um churches in their church auxiliaries are legally exempt from filing anything with the IRS uh regarding the Form 990. It's called the black box problem because churches don't have to publicly disclose their revenues, their executive salaries uh or their operational expenses. Some critics argue that it is impossible for the public or the IRS to verify whether those funds are actually being used for charitable purposes. So there is potential there for abuse, right? The lack of oversight has occasionally, Jim Baker, enabled high profile abuses such as televangelists uh using those church donations to fund lavish personal lifestyles, private jets. If your pastor has a private jet, run. Run away, close your checkbook, run away. Uh if they've got private jets and luxury real estate, uh, because they that's their parsonage, uh I mean that's abuse, right? I think it's abuse. So there's that argument. Then there's this tax exemption situation that really isn't that neutral for churches because it functions really, if you want to look at this way, as a government subsidy that's paid for by regular taxpayers who aren't going to this church or whatever it happens to be. So, for example, churches consume, right, like every like every building and every organization that exists, public services. They benefit from police protection, firefighting, roads, sanitation, but they don't pay local property taxes. So as a result, local homeowners right next door and everybody else around them, uh the secular small businesses, they have to pay higher property and sales taxes to make up for the untaxed real estate, which might be prime real estate. We'll talk about that in a minute, by these religious groups. This is not an argument against religion. You'll see where I'm going. Uh, but you'll but but we have to have this conversation. Secular citizens argue that tax exemptions actually reduce total government revenue. Non-religious taxpayers then have to uh are effectively forced to indirectly subsidize institutions whose religious doctrines they don't support, which is true. While there are proponents that argue that taxing churches would violate the First Amendment, critics of the argument flip it. They they contend that the granting of special tax privileges exclusively to religious groups actually violates the establishment clause, which forbids the government from establishing or favoring religion. Secular community groups, humanist organizations, social clubs, well, those groups they get a tax advantage, but they have to jump through strict regulatory hoops and file extensive paperwork just to prove that they are part of the public benefit. Whereas religious groups, well, they receive automatic exemptions from any of those rules. So many modern religious institutions operate vast financial empires that resemble really commercial corporations more than they do traditional houses of worship. Some large religious organizations hold billions of dollars in commercial real estate, corporate stocks, and investment portfolios that face minimal or any tax drag compared to the private investment firms that we're investing in, right? So by funneling the commercial ventures such as publishing houses, large-scale media networks, fitness centers, even, that's all under or could be under the umbrella of an integrated auxiliary group, which is legal as a church under the tax exemption law in 501, groups can sometimes shelter highly profitable business operations from the public scrutiny, no reporting, that everybody else on the secular side has to face. So under federal law, particularly the Johnson Amendment, all 501c3 organizations, including churches, are strictly prohibited from endorsing or opposing political candidates. Does that happen? Critics argue that because the IRS rarely audits churches due to political sensitivities, many houses of worship openly violate the law by endorsing candidates or funding partisan political activity from the pulpit. And because church donations are untraceable, they don't file the Form 990, watchdog organizations warn that uh religious entities can be weaponized and used for dark money or by dark money as pipelines to influence elections without public accountability. And nobody likes that. Maybe we do. I don't know. So let's take a look at this. I want to take a look at who are the wealthiest religious organizations in the United States, just so we can throw this your way. It's uniquely a challenge, by the way, because churches are not legally required to file Form 990 tax returns. So we're with the IRS. So it's a lot of guesstimation here. But consequently, there are other places like the internal financial balances, stock portfolios, real estate holdings. Those all remain hidden under this black box accounting that churches do. But there are institutional leaks. There are some required SEC filings for investment subsidiaries. There's obviously regional land registries and financial journalism has looked into this. And there's a clear picture, to some degree, of the wealthiest religious organizations operating in the United States under a tax exempt status. And the first thing I got to do is throw out a caveat because you're probably thinking it's the Catholics, which is probably correct. Before looking at all of these single organizations in a top 10 type thing that I put together for you, I have to throw a caveat, a warning shot. There is a in the United States, there's a legal distinction that has to be made regarding the Roman Catholic Church in the United States. Not talking about the Orthodox, but if the Roman Catholic Church is evaluated if we're just as a single centralized entity, then yes, the United States Catholic Church would sit atop this list by a lot. They've got their total real estate, which is thousands of parishes, schools, universities, hospitals, all that stuff they own, and then investments, investments, believe me, that is estimated well into hundreds and hundreds of billions of dollars. But the IRS and the corporate courts, uh, they don't view the Catholic Church as one entity. Instead, it's structurally fragmented into thousands of separate tax-exempt legal corporations that are based on dioceses, archdioceses, individual religious orders like the Jesuits or the Franciscans. And so because of that, they're all tracked individually or noted by their distinct national network. So yeah, it's it's not as when you do it that way, they don't come in as the top ten. But what you do have is let's talk about the Mormons. The Church of Jesus Christ of Latter-day Saints, LDS Mormon Church, has an estimated total asset value of somewhere between $250 billion and $293 billion. They also own Enzyme Enzyme, Enzyme Peak Advisors, and that's one of their auxiliaries, which also include they also have Farmland Reserve Incorporated and Ag Reserves Incorporated. The LDS Church holds the most heavily concentrated and well-documented single wealth portfolio of any United States-based religious organization. Its financial arm, Enzyme Peak, manages an estimated $100 to $120 billion plus in corporate stocks, bonds, and liquid assets. Additionally, the LDS Church is one of the largest private landowners in the United States of America, owning over 2.3 million acres of land, including massive commercial real estate properties like the $1.5 billion City Creek Center Mall in Salt Lake City and vast agricultural networks. The Catholic Church, the Catholic Church Network, the aggregated U.S. dioceses and orders, comes in a little under that, with $100 billion collectively in the U.S. Legally they're decentralized. The collective real estate footprint, though, of the Catholics and entities in the United States is still staggering. And it includes invaluable primary real estate, uh, primary real estate in major metropolitan hubs. For instance, the Archdeioces of New York's properties in Manhattan. And they have a multi-billion dollar health network and university endowment portfolios that operate under Catholic tax exempt umbrellas. But here's an interesting one. Number three, Trinity Church on Wall Street. Now, the Trinity Church uh also, Trinity Church on Wall Street is worth six billion dollars. It has uh also got the Trinity Church Heritage Fund and a real estate portfolio. Trinity Church is a single, one, just one episcopal parish in New York City with wealth that rivals global religious denominations. Its immense net worth stems from a historic land grant that was given by Britain's Queen Anne in 1705. Today, Trinity owns 14 acres of prime commercial real estate in downtown Manhattan, and it functions simultaneously as an episcopal parish, which I'm sure is well attended, and an elite New York City real estate developer. And it uses its multi-billion dollar commercial portfolio to bankroll international Anglican ministries. Anglican ministries, you know, the Church of England. The Church Pension Fund, which also belongs to the Episcopal Church, is coming in next at number four with assets of 17.5 billion dollars. So this is a prominent example, by the way, of a massive denominational integrated auxiliary. The Church Pension Fund of the Episcopalians manages the retirement, health, and life insurance portfolios for clergy and their lay employees of the Episcopal Church. And because it operates under the church's tax exempt status, its multi-billion dollar diversified investment portfolio, which is heavily exposed to international corporate stocks and private equity, grows tax-free every day. Next comes the Seventh day Adventists. Yeah, did you know you forgot about those guys? They're rolling in at $15.6 billion. They got some financial vehicles, the Adventist Health System and General Conference Corporation. They're headquartered in Maryland. The General Conference Corporation of the Seventh day Adventists coordinates a highly integrated global and domestic financial empire. A significant portion of their tens of billions in assets is tied up in real estate, institutional real estate to be specific, including a vast nationwide network of tax-exempt hospitals such as Advanced Health, and also their universities and their global publishing houses. And then there's the Lutheran Church, the Missouri Synod, the LCMS, and its subsidiaries. They're estimated at five to eight billion dollars, and that includes their auxiliary funds. Their financial vehicles include the LCMS Foundation, the Lutheran Church Extension Fund, and they operate a highly sophisticated financial structure. So through the LCEF and its central foundation, that organization pools billions of dollars in investments, in real estate loans, and corporate securities to finance church properties, schools, and also investment endowments across the country. Then come the Christian scientists, the first church of Christ Scientist. Two and a half to three and a half billion dollar value, total assets. The Christian Science Publishing Society is their main financial vehicle. So that's why you got the reading rooms. Based in Boston, Massachusetts, it's an organization that holds an incredibly large endowment that's relative to its smaller active membership, like there's nobody that is in it. Its wealth is primarily stored in a massive prime real estate footprint right in the heart of Boston, which is the Christian Science Plaza, alongside a heavily capitalized conservative investment portfolio designed to fund its global publishing and broadcasting arms in perpetuity. Next come the Baptists. The National Baptist Convention in the USA, large Baptist foundations, is worth between two and three billion dollars, estimated collectively across, I guess, the central entities. The financial vehicles are primarily uh individual state conventions and the Southern Baptist Convention, SBC Executive Committee, and its multi-billion dollar investment pension arm, which is known as Guidestone Financial Resources. It commands over $13 billion in assets under the management as a financial auxiliary. The asset breakdown works like this. Baptists emphasize local church autonomy, as we well know. Their centralized cooperative programs, their pension boards, uh, their massive educational seminaries hold massive investment endowments and extensive real estate holdings throughout the America and South and right here in the Midwest. Then comes Scientology, as we're getting close at number nine to rounding out our top ten churches with the most money. Their total assets, Scientology, is between two and two and a half billion dollars. And um, their financial vehicle, their primary one, is Church of Spiritual Technology, CST. So, look, they've had a historic, decades-long legal battle where the IRS granted finally, I guess, good or bad or indifferent, Scientology got tax exempt status back in 1993 because they considered it a church, which I did not do that. But the organization's wealth is heavily concentrated in high-value historic real estate holdings across Hollywood and also Clearwater, Florida, alongside secretive, heavily fortified rural underground archiving facilities designed to preserve the writings of their crazy founder, L. Ron Hubbard. And finally, the Jehovah's Witnesses rolling in at number 10, the Watchtower Bible and Tract Society of Pennsylvania is actually what they're known. We know them as Jehovah's Witnesses, knocking on your door any moment. They're between one and a half billion to two billion dollars in total assets. They've got the Watchtower real estate and publishing arms of their uh financial vehicles. And for decades, the Watchtower Society had an immense high-value real estate portfolio in Brooklyn, New York. But in recent years, the organization liquidated those urban properties for nearly a billion dollars and then relocated its global headquarters to a massive tax exempt campus in Warwick, Warwick, New York. And the the organization, by the way, commands significant capital through its localized Kingdom Hall real estate holdings and global multilingual printing infrastructure. Now, in the Gospel of Matthew, chapter 25, verses 14 through 30, Jesus tells the story of a master who entrusts his servants with wealth. We call them talents, uh, before they went on a journey. And two of the servants actively invest and they multiply their capital, right? Then there was the third who was paralyzed by fear. He Buries his coin in the ground. Upon his return, the master praises the industrious servants as good and faithful, while condemning the fearful servant for failing for at least to place the money with bankers to earn interest. And from a theological and institutional perspective, this parable serves as a robust defense for churches that are generating, investing, and holding significant financial assets, right? The parable establishes that wealth is not inherently evil, it's just a tool provided by God that demands active strategic stewardship. A church that allows its financial resources to sit idle or diminish through poor planning is behaving like the wicked lazy servant. But by aggressively investing in real estate and corporate stocks and diverse portfolios, a religious organization is fulfilling its divine mandate to multiply the resources entrusted to it. Just as the faithful servants doubled their master's money, a church that grows a multi-billion dollar endowment or acquires high-value real estate creates a self-sustaining financial engine. These gains are not stored for private enrichment, but they're weaponized to fund global missions, build hospitals, maintain houses of worship, and insulate charitable programs for economic downturns, not to mention my new coffee machine. And then, of course, that parable explicitly rewards calculation, risk taking, and economic engagement. Wealth generation, within a tax-exempt religious structure, is framed not as corporate greed, but as an act of active faith, ensuring that the master's estate expands aggressively across the earth. Right? Well, the defense of using the parable of the talents, which we so often hear in church, can be entirely dismantled by looking at Jesus' famous confrontation with the Pharisees, you know, the ones who was in charge of the church at the time. Regarding those imperial taxes that he talked about in Matthew chapter twenty-two, verses fifteen through twenty two. When asked if it is lawful to pay taxes to the Roman occupier, Jesus examines a denarius, notes the image of the emperor stapped upon it, and declares, Render therefore unto Caesar the things which are Caesar's, and unto God the things that are God's. This admonition provides a sharp and direct counterargument against shielding massive institutional wealth from public taxation. Jesus draws a clear, unyielding line between the spiritual kingdom of God and the physical economic systems of the state. Caesar. Money, corporate stocks, and real estate deeds are inherently products of Caesar's realm. They are minted, regulated, and protected by the legal and physical infrastructure of the government. By accumulating massive portfolios of worldly assets while refusing to pay taxes on them, churches are improperly hoarding the things of Caesar under the guise of serving God. To render under Caesar means acknowledging a moral obligation to pay for the societal benefits one enjoys. Tax-exempt religious organizations rely heavily on Caesar's infrastructure, using public roads for congregants, relying on state-funded police and fire departments to protect their real estate, and operating within stable financial markets regulated by the government. Demanding the full protection and utility of the state's economic system while withholding tax revenue could be a direct violation of Jesus' command to give the state what it is rightfully owed. So when Jesus tells his followers to keep God's realm separate from Caesar's, he is warning that the purity of spiritual ministry is corrupted when it becomes deeply entangled with the pursuit of secular financial dominance, using sophisticated legal loopholes and investment auxiliaries to shelter billions of dollars in corporate profit merges. The church was Caesar's economic machine. In doing so, the institution ceases to render to God what is God's, and instead they may begin worshiping the very currency stamped the image of the world. When Chief Justice John Marshall famously wrote the power to tax involves the power to destroy in the landmark 1819 Supreme Court case McCulloch v. Maryland, he was describing a fundamental truth about state power that applies to every individual, small business and corporation, not just churches. The core distinction in constitutional law is not whether taxation can destroy, but what the government is legally allowed to destroy. For any individual or regular corporation, excessive taxation can, and it routinely does, diminish financial viability or it completely destroys an enterprise. If corporate tax rates are set too high for businesses, a business can be driven into bankruptcy, destroying jobs and economic value. High property or income taxes can force people out of their homes or discourage them from working. In a standard democratic system, the check against the government using this power to destroy everyday citizens and businesses is political and economic. If lawmakers tax the public or corporations to the point of destruction, voters can vote them out of office. Or the economy is going to collapse, drying up the government's own revenue source. Can't kill the cow, right? Or the golden goose. If the power to tax is destructive to everyone, my question is why does the American legal system specifically use this quote to protect churches while allowing regular corporations to be taxed? Well, there is a First Amendment argument that places religious practice entirely outside the jurisdiction of government control. Under the Constitution, the government has the right to regulate and, if necessary, economically dismantle a regular corporation through taxation or law if it deems it in the public interest. However, the government is explicitly forbidden from destroying or infringing upon the free exercise of religion. And because regular corporations are secular, a tax code applies to them based on financial metrics. However, if the state had the power to tax churches, a hostile administration could theoretically use targeted taxation to destroy specific religious groups that it happened to disagree with. For example, a government could pass a tax on specific religious articles, or they could heavily tax mosques while exempting churches, or vice versa, effectively using the tax code to eradicate minority faiths. Critics of church tax exemption look at this exact double standard and argue that the power to destroy argument has just been taken too far. They argue that applying a neutral, uniform tax to a church's secular activities, like its real estate investments or corporate stock gains, it's not an attempt to destroy religion at all. Instead, it treats the church exactly like any other corporate entity, utilizing public infrastructure. So in this view, by completely shielding churches from the power to destroy, the government has accidentally given them the power to unfairly dominate the secular economy. That leaves regular citizens like you and me and businesses to shoulder the entire tax burden. Now, obviously, those churches and entities and exempt organizations are made up of people like you and me. So six one way, half duns the other, maybe. But in the land of the night in the landmark 1970 case of Walls versus Tax Commission of the City of New York, remember that? No, probably not. The U.S. Supreme Court formally debated how John Marshall's classic 1819 quote, the power to tax, involves the power to destroy, intersects with church tax exemptions. And the lawsuit, which was brought by Frederick Waltz, who was a property owner, that argued that New York's property tax exemption for religious organizations forced secular taxpayers to indirectly subsidize churches, violated the First Amendment's establishment clause. The case forced the court to decide what is more dangerous to religious freedom, the government's power to destroy a church via taxation, or the government's power to sponsor a church via tax exemptions. And the debate split the justices into two distinct philosophies. The majority opinion, which was written, the majority, by the way, was seven to one, and it was written by Justice Chief Justice Warren Berger, he upheld the tax exemptions, and he integrated the power to destroy concept directly into a new legal standard called the excessive entanglement doctrine. Berger explicitly agreed that if the state is given the authority to tax a church, it implicitly gains the power to penalize, foreclose on, or destroy it if the church fails to pay. The majority argued that the process of taxing a church actually creates more of a dangerous government overreach than tax exemption. To collect taxes, the government would have to collect the monetary value of church property, file tax liens, and audit religious books to decide what counts as a permissible religious expense versus taxable profit. Berger famously argued that an exemption is not a financial subsidy because a subsidy involves the state actively transferring taxpayer cash to a church. An exemption is simply the government abstaining from demanding that the church support the state, which effectively insulates both entities from one another. The loan dissenter, and remember, the vote was seven to one. We'll come back to that. Why is there only eight? Justice William Douglas rejected the majority's use of the power to destroy doctrine to justify total tax immunity of churches. Douglas counted that a tax exemption is functionally identical to a cash handout, because by removing churches from the tax rolls, the state shifts the financial burden of funding public utilities like police and fire protection, et cetera, onto the secular property owners like Frederick Waltz. I mean, and everybody else, whether they're secular or not, that goes to church. As noted in the subsequent legal scholarship, analyze and attention if the power to tax is the power to destroy, the power to not not to tax is the power to foster or create. Ha ha! Now that I understand. The power not to tax is the power to foster or create. Well, Douglass argued that by giving churches a special financial pass, the government was actively favoring religion over non-religion, violating the core promise of the establishment clause. Douglass argued that if a church is vital to its community, its own followers should donate enough money to cover its secular tax obligations rather than relying on a state-mandated tax shield. It was a seven-to-one argument. The Waltz case cemented benevolent neutrality into American law in 1970, establishing that while taxation can destroy, and often does, complete exemption is a constitutional tool used to prevent the government from interfering in religious life. As a side note, you might be wondering, was the Supreme Court of the 1970 Waltz versus TAC Commission of New York the same Supreme Court which rendered the Roe v. Wade decision? And the answer is no, they were not exactly the same court. Both cases were decided by the broader Burger Court area led by Chief Justice Warren Berger, but the specific nine Justice Bench underwent significant membership turnover between 1970 and 1973. So you ended up getting a couple of additions, three to be specific, including William Rehnquist. And so you have uh uh and Lewis Powell and um Harry Blackman. Rowe was a 7-2 major majority, and Rehnquist and White were the dissenters, just in case you're interested in that. You know, it was the great Chief Justice John Marshall, who, way back in 1819, looked out across the landscape of our young republic and uttered a warning that still rings down through the halls of time. He said, The power to tax involves the power to destroy. And for over two centuries, our tax collectors have taken that truth to heart. Today, if you look at the tax ledger of this great nation, you're gonna find nearly thirty distinct flavors of tax exempt organizations safely tucked away under Section 501 of the Internal Revenue Code. And they are, you know, the civic leagues, the trade boards, the credit unions, and of course, the churches. Together, they form a colossal economic engine, pulling in a staggering $3.9 trillion every single year. Now the good folks who defend this arrangement, and they do so with a passion, they point right back to good old John Marshall. They say if Uncle Sam can tax a church, he can destroy a church. They tell us that tax exemptions create a beautiful, benevolent firewall that keeps the sticky fingers of government bureaucracy out of the collection plate. And for a long time the Supreme Court agreed, calling it benevolent neutrality. But as any hardworking taxpayer will tell you, neutrality has gotten awfully expensive. You see, while everyday citizens and secular small businesses watch their wallets shrink under the weight of rising property and income taxes, that $3.9 trillion exempt economy is just sailing along, accumulating prime downtown real estate, multibilli corporate stock portfolios, and secretive investment trusts. Some of these institutions have grown so massive their assets rival the treasuries of foreign nations, yet because of a legal loophole, they're treated as a black box, exempt from filing the Standard Form 990, exempt from public auditing, and entirely exempt from contributing a single dime to the local police, fire, and road crews that protect their properties. And that brings us to a moment of profound accountability. Two thousand years ago, a group of clever men tried to trap a traveling Galilean carpenter with a question about taxes. They handed him a silver coin, and he asked them whose face was stamped on it? Caesar's, they replied. And then came those immortal words, render therefore unto Caesar the things which are Caesar's, and unto God the things that are God's. My friends, money, real estate deeds, corporate stock certificates are entirely the things of Caesar. They are minted by the government, regulated by the government, and protected by the government. When an organization hoards billions of Caesar's dollars in Wall Street portfolios while refusing to pay its civic share. No, I don't think it's serving God. It's just shortchanging its neighbors. Imagine, if you will, a different path. Imagine a nation where we boldly choose to render unto Caesar what is Caesar's, which nobody likes to do, by the way. By asking these massive, commercialized, exempt empires to step up and pay a fair, uniform tax on their secular wealth, we could instantly lift a crushing financial burden off the backs of everyday citizens like you and me and everybody else struggling. Secular businesses, you name it. But we wouldn't stop there. No, sir. For the resources that do remain with those tax exempt organizations, we would establish a new, higher standard of stewardship. Maybe a 90% rule. Instead of allowing billions to sit idle in stagnant reserves, executive bonuses or luxury endowments, these organizations would be required to channel at least 90% of their resources directly into active boots on the ground community services, like what churches are supposed to do. Think of what that would mean. It would mean a dynamic revival of the true American character. A culture where we take care of our neighbors at the hyperlocal level, parish by parish, neighborhood by neighborhood. It would breathe life into that local food bank of ours, the neighborhood clinic, and the community shelter, managed not by a distant bloated federal bureaucracy, but by the folks who actually know your name. And we would finally trade that cold, inefficient hand of government programming for the warm, purposeful heart of local charity. We could lower the taxes on the forgotten man, put the church back in the business of pure ministry, and leave the state to do only what the state must do. It's maybe a return to boundaries, uh maybe a return to fairness, and maybe a return to simple divine instruction that we should have never forgotten in the first place. You know, it is one thing to draw a clean line between the things of Caesar and the things of God. It is quite another to ensure that Caesar doesn't take his new bounty and throw it right down a bureaucratic rat hole. If we're going to ask these multibilli tax exempt empires to step up and pay their fair share on secular wealth, we have to address the elephant that's right here in the room with us. And that elephant is a federal government that has grown so large, so hungry, and so undisciplined that it can swallow billions of dollars for breakfast and ask what's for lunch. And for this grand idea to actually work, for it to truly lift the burden off the back of the forgotten American taxpayer, those new tax revenues cannot become a license for Washington just to spend more. No. In a truly American way, every single dime collected from those newly taxed commercial assets must be legally chained to three unyielding pillars of fiscal sanity, reducing the federal debt, cutting federal spending, and demanding absolute accountability at every single level of governance. Think about it. We currently face a mountain of national debt that threatens the very future of our grandchildren. If we take this new revenue and simply use it to bankroll new federal agencies and blow to programs, we haven't solved anything. We've just fed the beast. The beast. Instead, the law has to dictate that these funds go directly toward tearing down that mountain of debt. At the exact same time, for every dollar captured from the commercialized exempt sector, Uncle Sam must be forced to cut a dollar from his own overhead. We must intentionally starve the central bureaucracy to let the local communities thrive. You see, the real magic, I think, happens when you pair Washington's diet with a local feast of charity. When you shrink the federal footprint, you force accountability back to where the citizens can actually see it. No more hiding behind a thousand page spending bill passed in the dead of night. If a town needs a clinic or a neighborhood needs a food bank, it won't be funded by a distant federal grant wrapped up in red tape forever. It will be funded by that 90% standard that we talked about, poured directly into local organizations where the donors, the volunteers, and the neighbors can look the director right in the eye. That's the American way. It's the way of the town hall, the local parish, and the neighborhood council working together. By using this new tax revenue to pay off our national debt, our past dues, slashing the size of the federal government, and by forcing a return to hyperlocal stewardship led by locals, we do something remarkable. We don't just balance the ledger, we restore the balance of power. We take the clipboards away from the Washington bureaucrats and hand the reins back to the folks on Main Street. Or an honest day's work. You know, there's an old saying that the road to a certain unpleasant destination is paved with the very best of intentions. And if we aren't careful, this grand blueprint for fiscal sanity could easily stumble down that very same path. Because well, let's be entirely honest with ourselves. If we ask our churches, our ministries, and our great charitable foundations to render unto Caesar the profits of their worldly goods, we are taking money that was originally given with a pure heart, pennies from widows, tithes from hardworking families, and gifts meant to heal the sick, and we are handing it over to a secular government that has some awfully bad habits. And that is why there has to be a firewall, a sacred, unbreakable promise written into the very bedrock of any law that comes this way. This new revenue idea, harvested from the commercial assets of our own charitable institutions, can never be allowed to touch the dark, cynical machinery of Washington. It must be legally and permanently quarantined. Like the ark. It can never be used to fund the tragic machinery of war. Not one dime. It can go toward bombs or tanks or foreign conflicts that have nothing to do with the peace these ministries preach. It can never be shipped overseas as foreign aid to prop up distant dictators or line the pockets of int international bureaucrats with our own streets crumbling and our own people sleeping under bridges. And heaven forbid it can never, ever, ever be weaponized for partisan politics. We cannot allow the sacred offerings of the faithful to be transformed into dark money campaign at partisan partisan mundsling or the funding of political action committees that divide this country right down the middle. No. If we're going to harvest this fruit, we have to keep it clean. We must ensure that the best intentions of these grand organizations are never dirtied by the worst habits of our secular government. Instead, this revenue must have one singular beautiful destination, and that is to lighten the load right here at home. By using every penny strictly to pay down the national debt, lower the tax burden on everyday folks, and fund hyperlocal care, we do something wonderful. We ensure that this money is used exactly where it belongs to lift the heavy clouds of the financial worry off the backs of our own citizens, our own families, and our own neighborhoods. It's keeping the sacred separate from the profane. It's protecting the heart of charity, even while balancing the scales of justice. We turn that revenue into a force for pure local good, making it quite simply the sunny side of American citizens' lives.

SPEAKER_01 1:28:51

When the shadows fall and doubts begin to creep, remember together we're strong every week. Lift your neighbor up with kindness every day. Let your actions speak the words you want to say.

SPEAKER_00 1:29:08

The sunny side of life is a weekly production about our life on the family farmstead here in Iowa, the liberties we prize, and the pursuits which make us happy. None of this is possible, of course, without Christ in our lives. For the Lord God is our stomach and our shield.