Separation of Church and State: 
a Logical Impossibility?

By Roger E. Bissell 

[This essay was written in 1979 and delivered to a local Libertarian discussion group in Nashville, Tennessee. It was inspired by personal discussions with Ray L. Walker and Philip Carden, prominent local Libertarians in the area.]  

            The doctrine of Separation has been a mainstay of those who favor democracy and a free society for nearly 200 years. Many civil libertarians maintain that the First Amendment to the U.S. Constitution sets up a “wall of separation” between government and religion. They say that government should keep “hands-off” religion—religious laissez-faire, so to speak. 

            Yet, government being the kind of creature that it is, is this democratic ideal really possible? As long as the government raises its revenues coercively through taxation, isn’t it inevitably going to interfere with people’s practice of religion, one way or another? 

            Consider the alternatives: either the federal government, let’s say, passes laws which treat churches in a special way, tax-wise—or it passes laws which tax churches in the same way as every other individual or group in society. Either government’s tax code gives churches a special exemption, or it treats them just like everyone else. 

            If government exempts churches, the first question that naturally arises is: which churches? And who decides? If only one church is given the special tax-exempt status, this amounts to its being set up as the “official” or “established” church. All the rest of the churches are penalized for being different. Religious freedom exists only for the state-approved church. The other churches are not free. 

            Some may object that everyone is still free to believe what he or she chooses, even if their church is taxed into pauperdom. This is true, but irrelevant. Religious freedom includes not just freedom to select the contents of one’s religious beliefs, but also, more importantly, the practicing of one’s beliefs, living according to one’s beliefs in the real world. As such, religious freedom is inseparable from the freedom to use one’s resources however one chooses in the service of one’s beliefs—so long, of course, as one recognizes that others have the same rights and one does not use force or fraud against them. And when a church’s resources are taxed away, the members of its congregation are being denied their religious freedom, pure and simple. 

            This used to be a major issue and a major problem 200 years ago. To add insult to injury, not only did people of other faiths have to pay taxes that people of the official church did not, but in some cases, their tax dollars went to pay salaries and expenses of officials of the official church! Thanks to the First Amendment, this kind of blatant subsidy of one church at the expense of all others no longer exists. 

            Today we have what is called a “pluralistic” system. Tax-exempt status is given not to just one privileged church, but to all legitimate churches. But what is a “legitimate” church? Who decides? It varies from state to state, but generally speaking, the bureaucrats in the tax system and the judges in the tax courts do the deciding. You apply for your tax-exempt status, and if you don’t have hymnbooks or an Asian refugee program, they deny your application and sock it to you with the tax code. 

            In recent years, with the oppressive increases in taxation at all levels of government and the rise of the anti-tax libertarian movement, there have been a number of court cases dealing with churches which appear to many to have been set up purely for tax-shelter purposes. Libertarians and others have seen their tax dollars going to support domestic and foreign policies antagonistic to their beliefs, and they have seized upon the do-it-yourself church as a way to channel their resources in directions they approve of. 

            The question is not whether some “churches” are set up purely for tax avoidance purposes. Undoubtedly, some are. The real problem arises in trying to decide which are and which aren’t. Libertarians, nature-worshippers, Buddhists, Unitarians, atheists, and others have the same right to “churchify” their beliefs as do Catholics, Jews, and Church of Christ people. Yet, the bureaucrats and judges in the tax system—who are often devout believers in one of the established, “respectable” churches—don’t see it this way. To them, your moral and philosophical and metaphysical beliefs don’t deserve tax-exempt status, if they don’t include belief in God, eternal life, and (preferably, in the South, at least) Jesus Christ as Lord and Savior. 

            On the other hand, there are also some tax officials and judges who do recognize the equal right of non-Judeo-Christian churches to be granted tax-exempt status, so long as they have some kind of non-trivial doctrine and they meet and function like a congregation in a way which is at least generally similar to the “regular” churches. The trouble is, where do you draw the line? This opens the door to very subjective, arbitrary decisions as to what is or is not a church. In a way, it’s even more oppressive than the dogmatic, rigid, orthodox types, who only recognize churches that worship the Judeo-Christian God. At least, with the dogmatic people, you know where you stand. 

            In either case, however, what the government is doing is establishing religion. It is defining—dogmatically or subjectively—what is or is not a church. And this is something the First Amendment says the government has no business doing. 

            Of course, the real root of the government’s unwillingness to give tax-exempt status to alternative churches is not so much a matter of religious prejudice as it is a desire to protect the government’s revenues! What if everyone had his or her own church? The U.S. Treasury would be decimated! With people supporting the causes and purchasing the services they wanted, rather than what the politicians, bureaucrats and special interests want, there would be little for the government to do except, perhaps, operate the courts, the police, and a drastically reduced armed forces.  

Naturally, those who enjoy their positions and privileges in the present system cannot allow such a thing to happen! If it’s a choice between unfairness to “oddball” churches and self-destructing “The System” itself, they will gladly sacrifice the few and their religious freedom. 

            These are not the basic alternatives, however. These are both ways of favoring churches—either some but not others, or all churches indiscriminately. What kind of case can we make for exempting no churches? If we tax all churches without exception, does this result in a more just system—or does it amount to the worst possible denial of religious freedom? 

            If all churches are taxes, on what basis will they be assessed?  

·        Will it be a flat fee of so many dollars, regardless of the size or wealth of the church? No one else is taxed in this manner, so churches shouldn’t be either.

·        Will it be a flat rate of so many percent of the church’s revenues? Some states have personal income tax set up on this basis, and there are proposals to do this with federal income tax, too. But without a basic exemption of a certain minimum number of dollars, a flat rate tax could cripple or destroy the efforts of the smallest churches to operate effectively.

·        How about a progressive tax rate, that increases with the church’ revenue? This penalizes the larger churches and discourages church growth. There would be a trend toward smaller and smaller churches, and large ones would split up, perhaps only on paper, into smaller ones in order to avoid the higher rate—much the same way welfare families “break up” in order to keep the income support benefits coming in when both parents are working. To keep revenues from dropping off, the tax rate would have to be raised, which would increase the burden on the smaller churches anyway, defeating the purpose of the progressive rate (which is hardly progressive, once churches end up at the same small size!).           

However the tax on churches was structured, it would hurt the small churches most. The power to tax is the power to destroy, as the Supreme Court held in Marbury vs. Madison. But even if it only cripples, rather than kills, the small churches, it is hurting their ability to use their resources in the service of their beliefs. In taxing churches, government is unavoidably interfering with the religious freedom of the members of their congregations—and the small churches suffer most. 

            Some may object that churches are not entitled to a free ride, that they should pay like everyone else for the services they receive. If churches receive and pay for telephone and electrical service, for instance, why shouldn’t they also pay for the fire and police protection and garbage collection that they receive? Shouldn’t they have to pay some sort of fee “in lieu of taxes” for those services? Yes, but only if they want and receive those services

            Suppose a church would prefer to hire a private security company to patrol its premises and direct traffic on Sunday—or a private garbage company to pick up its trash. Or suppose members of the congregation volunteered to provide those services free of charge. In such a case, a church would owe nothing to the city or county. They could be required to pay only if they asked for and got the government’s services. And they could not morally or logically regard this as government interference in religion or violation of the separation of Church and State. 

            Others may point to government welfare or school or mass transit programs which do not provide a service to everyone, but from which everyone benefits, nevertheless. Shouldn’t everyone have to pay their share of the cost of these public goods, even if they don’t personally partake of them? For instance, isn’t it important that we have an educated society, even if we choose not to have children—and shouldn’t we, therefore, be required to support the public schools? 

            The answer to that is simple. The Tennessee State Constitution be damned: if you are using the public schools, you should have to pay for using them, but only if you are using them. And this should be in the form of a direct fee, whether its source is the parents’ present income, loans, scholarships, or gifts. Otherwise, if you want to support the public schools, you can; but you should also be free to instead put that money anywhere else you choose, too, whether in an alternative school, a bowling alley, extra restaurant meals, an IRA, a trip to the Mustang Ranch, or whatever. 

            Yes, those children who are properly educated in a public school do benefit society as a whole. But so do those who are properly educated at home or in an alternative school. And if parents or alternative school teachers do not have the right to force us to support their educational efforts, neither do public school teachers. 

            More generally, anything you buy with your money, if it is a free exchange between consenting individuals, benefits society as a whole. That’s true for alternative schooling, restaurant meals, an evening of bowling or recreation at the Mustang Ranch, or future security with an IRA. Each party to the transaction has decided that, in their scheme of personal values, what they are giving to the other person—money, goods, or services—is not worth as much to them as what the other person is willing to give them in exchange.  

In other words, each party is better off than before the exchange. Society benefits because two-by-two, its members are becoming better off, and without causing someone else to be worse off. The level of well-being of society rises higher and higher as a result, with no infringement on the freedom of any of its individual members.           

            This is not true when government tries to make some people provide others with money, goods, or services—or to forbid or discourage such exchanges with regulations and tax laws. It stifles our normal impulses to be productive and to be generous with the surplus of our productivity. It encourages more and more people to be unproductive and to continue living off others, who in turn are producing less and less. The more government tightens and loosens the regulations and tax provisions which affect us, the wider become the ups and downs of our roller-coaster economy. This is not an environment for creative, productive people to plan long-range for their betterment and the betterment of those in society. 

            So, really, everything that has been said about churches applies, or should apply, to each of us as individuals, too. We should be free to choose what services we want and to pay for them. We should be free to support programs and services we approve of and can afford to help, and to not be forced to support others. We should be free to choose whom to deal with, on what terms, so long as we don’t use force or fraud against them. 

            We’re talking about basic freedom of association, of which freedom of religion is just a subcategory. Whether it’s your body, your labor, your property, or your money, if you are forced to use it to serve people, programs, plans, etc., that you have not freely chosen, you are being denied the freedom of association. And when religious ideas and values are involved, more specifically, your freedom of religion is being denied. 

            Nowhere is this more obvious than in education. By the very nature of the beast, the public schools must support or promote someone’s religious world-view, to the detriment of someone else’s. Putting the secular humanists in the driver’s seat does great injustice to the religious fundamentalists and others who don’t want teachers delving too deeply into such topics as sex, death, and parental authority—especially when those teachers instill values opposite to those the parents want their children to learn. Is this any less an injustice than the child of atheist or Jewish or Unitarian parents who had to endure propaganda twenty years ago from over-zealous Christian teachers in the public schools? 

            Now, if the parents in each case were free to remove their children and their tax dollars from the public schools and put them in a school more to their liking, that would solve their problem and restore their religious freedom. But what about childless people and businesses who object for the same reasons to the goings-on in the public schools? What of their religious freedom?  

And, to return to the main subject, what about church congregations who do not approve of the public schools, or the public transit system, or the public welfare system, etc.? If they are to be taxed, does this not abridge their religious freedom? Does this not constitute interference in the practice of their belief, being forced to support things they disapprove of on religious grounds? Does this not amount to a gaping hole in the wall of separation between Church and State? Yes, to all three questions. 

So, no matter which way we turn, in regard to taxes, we find that the separation of Church and State is a logical impossibility. It can’t exist. If we exempt some churches, we trample on he religious freedom of those not exempted. If we tax all churches, we trample on the religious freedom of those who would prefer to spend their congregation’s money differently than the Congress or legislature or town council. In either case, great harm if not destruction results for religion. 

Only if we exempt all churches—i.e., anything somebody wants to call a church—will government be able to avoid interfering in freedom of religion. But that, as we have seen, would harm if not destroy the state! Many would find this a horrendous prospect. But I, for one, would instead paraphrase Thomas Jefferson—an intellectual giant on this issue, as on so many others: faced with the choice between a society without a healthy religious sector and society without a healthy state apparatus, I would without hesitation choose the latter.