8 E
Religion in America
THURSDAY, MAY 31. 1962
MEDFORD MAIL THIBUNt MEDFORD. OREGON
Taxation of Church Property
Undergoing Growing Scrutiny
By LOUIS CASSELS
UPI Correspondent
Should churches pay taxes?
That question is under
growing scrutiny in America,
I both by the
l churches and
by the courts.
Church prop
erty is now
immune irom
real estate
taxes in all 50
states and the
District of Co
lumbia. The
cassis income a e
rived from church-owned
business enterprises also is
exempt from both federal and
state taxation.
Some Americans are op
posed to any form of tax ex
emption for religious organ
izations. They argue that it
is a form of government sub
sidy which violates the con
stitutional principle of separa
tion of church and state.
Others contend that the
Constitution itself confers tax
immunity on churches. They
point out that the First
Amendment prohibits inter
ference with the "free exer
cise" of religion, and they
assert that if the government
had the power to tax relig
ious organizations, it would
be in a position to control
or even destroy them.
Turn Down Review
Last month, the U.S. Su
preme Court refused to re
view a state courts unan
imous ruling that property
tax exemptions for churches
are constitutional. The high
court held, 8-1, that "no sub
stantial federal question" was
presented by the case
This ruling may settle-for
a while at least-the legal de
bate over tax exemptions for
land and buildings which are
actually used as places of
worship. But there are other
areas of controversy which
were not covered by this
case.
For example, if a church
happens to own a profit-mak
ing business enterprise-such
as a printing plant, a depart
ment store, a winery or an
apartment house-should the
income be subject to the same
52 per cent tax which the
federal . government would
levy on a private corporation
engaged in the same business?
Church Business Growing
Under present law and pol
icy, the Internal Revenue
Service makes no attempt to
assess income taxes against
any business enterprise own
ed by a church, however re
mote its activities may be
from religious worship. As a
result, churches have been
going into competitive, profit
making businesses on a grow
ing scale. There are church
owned hotels, bakeries, ware
houses, radio stations, office
buildings, parking lots, print
ing firms, and similar busi-
Grange News
Phoenix Grange
The lecture program pre
ceded the regular meeting of
Phoenix Grange last week
with J. H. Creager, of the Pa
cific Northwest Bell company,
explaining how to use the all
digit system in making tele
phone calls and why it was
necessary for this develop
ment.
Charles Hockersmith and
Merviti Hixon both read re
ports concerning farming and
its effect in the country's wel
fare. .
Some hail damage was re
ported by Vaughn Quacken
bush. He said that other areas
have been planting Bartlett
pears, but that this valley is
looking for other varieties at
this time.
Mrs. Hockersmith, who re
ported for the Home Econom
ics club, reminded women how
to prepare cookies if they
were interested in participat
ing in the fair display.
Mrs. Olive Floyd was elect
ed to become a member of
the Grange. She is a former
member of Phoenix.
Thirteen members of Phoe'
nix Grange took the fifth de
gree and became Pomona
members during the program
at Central Point Grange re
cently.
Gold Hill Grange
Gold Hill Grange met re
cently with Master Wilbur
Martin presiding. Three can
didates were elected to mem
bership and one new member
was obligated in first and sec
ond degrees.
Reports were heard from
standing committee The lec
ture hour program consisted
of an entertainment, "Modern
Times Through Ancient Eyes,"
presented by the sixth and
seventh grade students of Mil
dred Black.
John Patrick will talk on
4-H work at the Grange meet
ing June 7. The Grange pot
luck suppers were called off
during the summer months
because of conflicting activities.
nesses in many parts of the
country. The Roman Catholic
Church and the Mormon
Church are most often men
tioned in this connection, but
a number of Protestant
churches are also engaged in
tax-free business operations.
One tempting opportunity
which many churches have
been unable to resist is the
so-called "sale and lease
back" deal. A business firm
sells its physical property to
a religious body, then leases
it back and continues opera
tions as before. The tax ex
emption which results from
technical church "ownership"
of the venture enables both
the church and the private
operator to proxit substan
tially from such a transac
tion.
Some Protestants Troubled
Some Protestants are deep
ly troubled about what they
regard as abuses of the tax
exemptions granted to church
es. The Rev. Dr. Eugene Car
son Blake, stated clerk of
the U ni ted Presbyterian
Church, has asserted publicly
on several occasions recently
that churches should pay reg
ular corporate tax rates "on
income from business unre
lated to the religious purpose
of the church."
Dr. Blake also believes that
churches should voluntarily
make payments in lieu of
taxes to help their communi
ties provide the police and
fire protection and other
services paid for by local
property taxes.
The Baptist joint commit
tee on public affairs has tak
en the position that "earn
ings from businesses which
have no direct connection
with the religious purposes
of the church should pay in
come taxes.
Wins Legal Victories
Although the Internal Rev
enue Service has been re
luctant to challenge the tax
exempt status of any business
which is clearly "church
owned," it has been trying
to limit the definition of
what constitutes a church for
tax exemption purposes. And
it has recently won two legal
victories on this front.
In December, a federal
court approved a settlement
under which the IRS collected
some $3.5 million in back in
come taxes from the Chris
tian Brothers of California,
one of the nation's largest
producers of wine and bran
dy. IRS contended that the
Christian Brothers, although
Historian Gives
Hobby to Institute
Huntsville, Ala. -(UPB Paul
H. Satterfield, a historian with
the federal space agency here,
earned a niche in the Smith
sonian Institution with h i s
hobby.
Satterfield, who says he just
happened on the hobby
collecting old newspapers
donated to the institution 177
newspapers chronicling the
history of American politics.
They were added to the
Smithsonian's reference de
partment files.
A bachelor, Satterfield be
gan his collection back in the
early years of the century
with several old newspapers
which his family had saved.
As he grew older, he amassed
a collection which before the
donation to the Smithsonian
was "crowding me out of the
house."
The oldest paper dates to
1896. The Chicago Daily Inter-Ocean,
no longer publish
ed, sold for two cents a copy,
carried no pictures, and edi
torialized liberally in the
news columns.
Now his clipping file re
ceives more attention than the
collecting of whole newspa
pers. The clipping file, also do
nated to the Smithsonian, in
cluded hundreds of assorted
clippings covering politics in
bygone years. It closes a gap
in historical files caused by
an inability of most museums
and libraries to keep a file on
bulky newspapers before mi
crofilm recordings was developed.
&
related to the Catholic
Church, performed no "sacer
dotal functions" in their
wineries, and were therefore
not a church.
In February, the Supreme
Court sustained an IRS claim
that Scripture Press Founda
tion of Wheaton, 111., an in
dependent private organiza
tion which sells Sunday
school materials to many
small Protestant denomina
tions, is not entitled to tax
exemption. Had Scripture
Press happened to be owned
hv a church, however, it
would be tax exempt even if
it chose to publish comic
books or racing forms.
RADIO STILL POPULAR
Chicago - IUPD - Radios def
initely are not going the way
of the buggy whip. Ameri
cans bought more radios last
year than in any previous
year except 1947, a radio
manufacturer reported. The
17 million sets sold in 1961
had a value of more than S340
million, the firm said.
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HOUND DOG IN FLIGHT - An Air Force the Strategic Air Command by North Amer-
XGAM-77A Hound Dog air-to-surface mis- ican Aviation's space and information serv-
sile is shown flying over the White Sands ices division, has the capability for both high
Missile Range in this picture released by the and low level flight following its launch
Pentagon. The Hound Dog, produced for from a B52 bomber. (UPI)
Quotes From the News
BY UNITED""PRESSfNTERNATIONAL
Moscow - Soviet Premier Nikita S. Khrushchev, upon
leaving the Benny Goodman jazz concert: n
"I don't understand jsit. but I enjoyed the concert.
San Francisco - Miguel Tejada, consul general of the
Dominican Republic, commenting on the first anniversary ot
the death of dictator Gen. Rafael Trujillo:
"It is a pity that the death of men U reason for his
countrymen to rejoice ... It might even seem d"tic. were
it not for the feet that the extermination of Trujillo alio pju
an end to a reign of terror that lasted 32 years . . .
Miami - The Miami Herald, in an editorial comment em
President Kennedy's cancellation of his subscription to the
New York Herald Tribune: .
"All that has happened to the Herald Tribune ii to get
banned at 1600 Pennsylvania ave.. or so to speak, in Boston.
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CLOSED SUNDAYS