Church Resists Social Security Tax

The Gainesville Sun reprinted a Congressional Quarterly piece by Pamela Fessler:

Social Security goes to church

 The Rev. Olen R. Adams, pastor of the Quint City Baptist Temple in Davenport, Iowa, is a law-abiding man. But he is prepared to go to jail if he must in a fight with the government over Social Security coverage of his church’s employees.

Adams is one of possibly thousands of fundamentalist and evangelical ministers across the country who are battling a new law requiring churches to participate in the retirement system. They argue that the law is an infringement on their religious freedoms and violates the separation of church and state.

While some in Congress are trying to avert a constitutional confrontation, their solution may be inadequate to appease the protesters. Adams and others want nothing short of outright repeal of the law, which was enacted as part of a bill to rescue the financially ailing Social Security system.

“My church has taken the position that we will not be a tax collector or a tax agency for the government,” says Adams. “And we will not allow the government to take God’s money.”

Adams and other protesters object to the new law’s requirement that churches pay the employer’s share of the payroll tax that funds Social Security. The first payment for the 18 employees of the Quint City Baptist Temple was due at the Internal Revenue Service , but Adams had no plans to comply.

Under the system, employers this year must pay 7 percent and employees 6.7 percent of the first $37,800 of a worker’s salary.

The church coverage provision was included in last year’s Social Security bill to boost the system’s financial stability by expanding coverage to as many workers as possible. Prior to this year, churches and other non-profit groups had an option to participate in the program, and about 80 percent had chosen to do so. Members of the clergy and religious orders have never been required to join.

But with enactment of the new law, groups representing several thousand, mostly small churches — some of which already belonged to Social Security — raised their voices in opposition to the mandatory requirement.

“This issue strikes at the very core of the separation of church and state,” Greg Dixon, national chairman of the American Coalition of Unregistered Churches, told the Senate Finance Committee at a hearing .

To appease Dixon and others, the Senate on agreed to give churches a one-time chance to pull out of the system if they oppose participation on religious grounds. The option would allow the churches not to pay Social Security taxes for lay employees who work directly for the church or a church-run elementary or secondary school.

But there’s a catch. Employees of such churches would then be required to pay a higher Social Security tax as though they were self-employed — 11.3 percent instead of 6.7 percent in .

The Senate included this requirement to ensure that there would be minimal financial loss to the Social Security system while still allowing church employees to benefit from the program.

But according to William Bilings, executive director of the National Christian Action Coalition, some churches see the proposal as, in effect, a tax that will force them to raise employee salaries to cover the additional payments. “They feel that Congress is doing indirectly something it can’t do directly,” said Bilings.

His group, which represents 16,000 fundamentalist churches and over 12,000 church-run schools, is undecided whether it will fight the provision. “It’s not what we like, but we don’t see any other possibility right now,” he said. The coalition, as well as other church groups, seeks outright repeal or a court victory as its ultimate goal.

Still uncertain is whether the Senate solution will ever make its way into law. No similar provision has been adopted by the House, and the issue will have to be resolved in a House-Senate conference.

House conferees will likely take ther lead from Rep. J.J. Pickle, D-Texas, chairman of the Social Security Subcommittee and respected authority on the system, who aides say is still undecided whether he will fight the measure.

They point out, however, that Pickle in the past has strongly opposed any tampering with the bipartisan Social Security agreement reached . Acting Social Security Commissioner Martha A. McSteen noted in her testimony at ’s Finance Committee hearing that many low-paid church employees have no other pension programs on which they can rely.

The dispute between the churches and the government, she predicted, “will ultimately have to be decided by the courts.”

And there, the churches may face an uphill battle. In early , the Supreme Court unanimously decided that an Amish farmer and carpenter who employed other members of his sect could not refuse to pay Social Security taxes on their wages. Whatever burden on the free exercise of religion such a tax requirement imposed was outweighed by the government’s interest in the fiscal integrity of the Social Security system, the court held.

Dixon continued fighting this fight into this century, and may still be at it, but he didn’t get any sympathy from the courts. The government won a court order to seize his church, the Indianapolis Baptist Temple, and took it over in .

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