The Johnson Amendment Under GOP Plan

By: David Herzig

Back in May, I continued to track President Trump’s promise to end the Johnson Amendment.  At that time he promised during a National Prayer Breakfast that he would “get rid of and totally destroy” the Johnson Amendment and promised to issue an executive order (which he signed May 4).

But, a significant problem with legislating via Executive Order is that executives change and with the change so goes the Executive Orders.  What works much better is legislation. Enter, the Tax Cuts and Job Act, where there is a proposal to end the Johnson Amendment.

What is the Johnson Amendment? In 1954, without explanation, Lyndon Johnson proposed a small amendment to the tax law governing tax-exempt organizations: forbid them from endorsing or opposing candidates for office.  Although the Johnson Amendment applies to all tax-exempt organizations, it has become something of a bête noire for churches.

The main concern of the repeal of the Johnson Amendment is churches will effectively turn into giant super PACs. After all, donations to churches and other tax-exempt organizations are deductible to the donor. Expressly political donations (including to PACs) are not. Supporters of the Johnson Amendment fear that, without it as a backstop, wealthy would-be political donors will instead capture tax-exempt organizations and flood them with (deductible) donations, with the condition that they support the donor’s preferred candidate for office.

But, as Professor Brunson and I pointed out, some of these fears are overblown.  Even without the Johnson Amendment, the tax law severely constrains churches’ ability to engage in politics. Exempt organizations must primarily do things that further their exempt purpose, and politics do not qualify as an exempt purpose. As a result, if a church’s politicking (combined with all of its other non-core activities) make up more than an “insubstantial” part of its activities, the church no longer qualifies as exempt. Though the tax law does not define “insubstantial,” courts have found this to be a true limit.

It seems like the Big 6 followed our advice, from the Tax Cut Act:

Screen Shot 2017-11-02 at 1.15.37 PM

It looks like, at first blush, that religious organizations can discuss and even have candidates at their places of worship.   This is not really different than the current rules.  For example, there is an open question if a pastor can discuss politics at all.  Many churches openly contest that rule via Pulpit Sunday‘s.  These proposes rules seem to eliminate the concern of religious organizations losing their exemption for a Pulpit Sunday type sermon.

So, yes there is some tinkering at the margins, e.g., no longer will equal time be required; but, the basic  proposed rules seem to fairly similar to the current regime.

However, I begin to wonder could a church that has a national syndicated television show (e.g., Joel Osteen Ministries) run content on one candidate?  Maybe? And if so, hmmm…

Disclaimer: this is instant punditry and is subject to being very wrong!

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