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Theology of Politics | Church Tax Exemption


“Because of religion’s role in the lives of believers, the church, as the incubator and propagator of religion, deserves tax exemption.”

–David Closson

On June 28, 2015, New York Times columnist Mark Oppenheimer fired the opening salvo in the next chapter of the religious liberty debate by forthrightly calling for the removal of tax-exempt status from churches that dissent on same-sex marriage.[1] Writing only two days after the Supreme Court decided Obergefell, legalizing same-sex marriage, Oppenheimer confirmed the fears of many religious liberty advocates, including Supreme Court Justice Samuel Alito, who had warned in his dissent that the majority’s decision would be used “to vilify Americans who are unwilling to assent to the new orthodoxy.”[2]

Since Obergefell, skirmishes between religious and erotic liberty have unfolded within the wedding industry as bakers, florists, and photographers have faced increased cultural and legal pressure to accept same-sex marriage as morally viable. The most high-profile example is Jack Phillips, a Christian baker who refused to custom-design cakes that celebrate events or convey messages contrary to his religious beliefs. After nearly a year of litigation, Phillips’ religious liberty claim prevailed at the Supreme Court,[3] though he continues to face subsequent legal challenges from the LGBT community despite the ruling. Phillips isn’t the only one who faced these battles, and threats to religious liberty remain.[4]

Many of these challenges lie at the intersection of religious liberty and LGBT rights, where, unfortunately, a zero-sum mentality has become ensconced within many influential sectors of the cultural left. Representative of this attitude is Oppenheimer, who candidly admits that the desired end for many progressives is the moral approval of the sexual revolution’s ideology. In fact, in 2019, then-presidential candidate Beto O’Rourke openly called for the revocation of tax exemption from religious institutions that refuse to endorse same-sex marriage.

For progressives like Beto O’Rourke, forfeiture of religious liberty is simply the price to pay for not falling in line.

Although there are many areas of concern for religious liberty in the United States, the contention of this paper is that the revocation of religious tax exemption constitutes an underappreciated yet serious religious liberty threat that churches must prepare for. As a larger percentage of society views biblical teachings on marriage and human sexuality as outdated and subversive, it will be imperative for churches to advance a coherent and sound rationale for maintaining their tax-exempt status. Seemingly compelling economic, historical, and legal arguments for preserving the status quo in terms of tax policy are ultimately unpersuasive because they lack a coherent philosophy of society and are thus ill-equipped to sustain future critique.

Therefore, this essay will advance philosophical and theological arguments rooted in Abraham Kuyper’s notion of “sphere sovereignty” to advance the thesis that there is a theological rationale for religious tax exemption in three sections. First, a preliminary section will consider and define the fundamental concept of tax exemption, with reference to how it has historically been conceived in the United States. Second, Kuyper’s notion of sphere sovereignty will be examined in depth from relevant primary and secondary literature. Finally, Kuyper’s insights will be applied directly to the issue of tax exemption.

Tax Exemption

Unsurprisingly, there are conflicting views regarding the nature of tax exemption within American jurisprudence. This is apparent in the differing rationales provided in the concurring opinions in Walz v. Tax Commission of the City of New York, the 1970 U.S. Supreme Court decision that upheld the constitutionality of religious tax exemption.[5] Thus, preceding an analysis of Abraham Kuyper’s political theology, it is necessary to define the concept of tax exemption and trace its history. Is tax exemption tantamount to a subsidy of religion? What rationales were historically employed in its favor? Are any of these justifications inherently theological in nature? What follows is a brief historical overview of tax exemption, a survey of rationales, and a reflection on the nature of religion as it relates to basic human goods. The pluralism theory will be introduced, which will set up the subsequent discussion on sphere sovereignty.


Scholarship indicates that governments have provided forms of religious tax exemptions for millennia.[6] Evidence of the practice has been found in the ancient worlds of Egypt, Sumeria, Babylon, Persia, and Israel.[7] Generally, religious tax exemption in antiquity was the state’s recognition of the temple’s power and communicated a desire to peacefully cooperate with the sacerdotal class. Christian churches were first exempted during the fourth century following Constantine’s conversion.[8] While the scope and latitude of the church’s tax-exempt status fluctuated under subsequent rulers, religious tax exemption remained in one form or another throughout late antiquity. Apart from wartime taxation, medieval rulers customarily continued exempting churches from taxation. This approach was gradually incorporated into English common law, the tradition most responsible for influencing how colonial lawmakers thought about law and taxing policy.

In the American colonies, the practice of establishing a state church and exempting it from taxation was a carryover from England where exemptions were accorded to established churches that discharged certain governmental burdens. [9] It is worth noting that establishment and tax exemption were often coextensive; established churches were exempt while dissenting churches were often not. However, following the War of Independence (1775-83) and the ratification of the U.S. Constitution (1788), the relationship between church and state in the new republic underwent revision, with most new states moving toward disestablishment.[10] As states disestablished, legislatures were given an opportunity to reconsider the propriety of maintaining religious tax exemptions. Significantly, states not only reenacted statutes permitting charitable and religious exemptions (specifically from local property tax), but many of the new state constitutions explicitly mandated it. The federal government likewise exempted religious institutions from tax collection.[11]


In America, rationales for religious tax exemption are varied and have developed over time. An early colonial rationale argued that exemptions were accorded to established churches because they discharged state duties. The church, as an agency of the state, was tax exempt along with other entities closely affiliated with the government, such as public libraries, police and fire departments, and state universities. After state churches were disestablished, this justification was modified into what became known as the social benefit theory, which contends that churches merit tax-exempt status because they render services to their communities that relieve the government from having to meet certain public needs.[12] In conversations about tax exemption the social benefit theory is ubiquitous, invoked by Supreme Court justices,[13] conservative policy organizations,[14] and religious advocacy groups.[15]

Although the social benefit theory is the most commonly invoked rationale for the preservation of religious tax exemption, it is not the only explanation employed by government officials, judges, churches, and tax lawyers. Other rationales, including the subsidy, income measurement, donative, historical, and double taxation or immorality theories,[16] offer an assortment of pragmatic means by which government agencies can evaluate the economic and social value of churches to their communities. The logic of these theories is that tax exemption is a commensurate response by the state to the church for the latter’s contribution to society.

The preceding arguments (particularly the social benefit theory) for religious tax exemption are persuasive to a point. If churches are contributing to their communities in economically measurable and tangible ways, financial assistance in the form of tax exemption appears reasonable. However, the question must be raised: What happens when a church is no longer perceived as economically advantageous to its community? When a congregation ceases to provide material and social capital deemed worthwhile, should the church forfeit its position in the tax code? These questions raise significant issues about the viability of rationales that rely solely on the church’s ability to procure civic benefits. Inevitably, if religious tax exemption is fundamentally grounded in a church’s social utility, a post-Christian society will find current rationales unpersuasive and expect religious organizations to shoulder their share of the tax burden.

The implications of the foregoing argument were discerned by the Supreme Court in Walz. In fact, Chief Justice Warren E. Burger, writing for an 8-1 majority, stated that “it is unnecessary to justify the tax exemption on the social welfare services or ‘good works’ that some churches perform.”[17] In a crucial paragraph, Burger explained why relying exclusively on pragmatic or public benefit considerations for determining tax exemption is not judicious for the state:

To give emphasis to so variable an aspect of the work of religious bodies would introduce an element of governmental evaluation and standards as to the worth of particular social welfare programs, thus producing a kind of continuing day-to-day relationship which the policy of neutrality seeks to minimize. Hence, the use of a social welfare yardstick as a significant element to qualify for tax exemption could conceivably give rise to confrontations that could escalate to constitutional dimensions.”[18]

Implicit in Burger’s contention is what he elsewhere states more explicitly, namely, that church and state are entities with discernable and different jurisdictions, and that it is, therefore, prudent for the state to “restrict the fiscal relationship between church and state” in a way that “reinforces[s] the desired separation insulating each from the other.”[19] Burger’s comments are important because they define what tax exemption actually is. In short, tax exemption is when the “government… abstains from demanding that the church support the state.”[20]

Significantly, this means that religious tax exemption is not a government subsidy; it is merely a withdrawal of the government’s demand for financial support.

Burger argues that the state should exercise “benevolent neutrality” toward the church because the church operates within a different realm. His concern about increased government oversight and supervision of the church in financial matters underscores an appreciation for societal pluralism, a consideration highlighted in Justice Brennan’s concurrence. For Brennan, society is served by a diversity of institutions and religious tax exemption is one means of limiting the influence of government orthodoxy on major areas of community life.[21] In fact, Brennan’s reflections on the merits of pluralism touch on philosophical principles that preview the forthcoming discussion on Abraham Kuyper’s political theories.

Religion as a Basic Good

Implied in the forgoing summary of Justice Brennan’s Walz concurrence is the assumption that pluralism is a noble political ideal, and that religion is a basic good worth defending. Because these views are challenged in some quarters today, an explanation of pluralism and the nature of religion will be helpful before shifting to Kuyper’s notion of sphere sovereignty and the development of a theological rationale for religious tax exemption.

As a political philosophy, pluralism affirms diversity within the body politic by supporting society’s mediating structures and encouraging the expression of diverse viewpoints. Pluralism encourages the expansion of institutions and believes the articulation of varying opinions is necessary for political discourse. Government’s totalitarian instincts are held in check when political power is diffused and ideas are allowed to flow freely. In a pluralistic society, families, universities, political parties, businesses, and churches work together to advance a broad vision of flourishing that serves the common good. Within this framework, churches play a significant role, and to appreciate their contribution it is vital to consider the nature of religion.

For millennia man has searched for answers to life’s most enduring questions. Existential questions related to humanity’s origin, purpose, and destiny have occupied the world’s greatest minds. For many, religion is the domain wherein these questions are settled. Because of its ability to help people grapple with questions of ultimate meaning, religion is inherently valuable. Ryan Anderson and Sheriff Girgis expound on this notion, describing religion as a “basic human good” that is indispensable for a full-orbed and meaningful life.[22] Anderson and Girgis ground their claim on the premise that religion is the locus of efforts to achieve harmony with the ultimate source(s) of meaning. Achieving harmony with the transcendent — whoever or whatever that is determined to be — produces integrity.

Thus, religion is a basic human good and deserves protection; impositions on religion should be avoided whenever reasonably possible. For Anderson and Girgis, the role religion plays in people’s lives provides the basis for broad religious liberty protections. For the purposes of this paper, it is important to extend these insights to the institutional church, the historic keeper and guardian of religion.

If the nature of religion is answering questions pertaining to ultimate meaning, the role of the church in helping the faithful pursue these questions cannot be overstated. On this point, legal scholar Dean Kelley argues that “the quality which enables a religion to satisfy the need for ultimate meaning does not appear to be the cogency, reasonableness, plausibility, or even attractiveness…of its doctrinal affirmations.” Rather, it is “the intensity with which [religions] are…embodied by a devoted community of adherents.”[23] Kelley contends that shared experiences with fellow believers are central to the quest for ultimate meaning; religion exists as a functioning reality to the degree it is embodied in ongoing community.[24]

In short, Kelley connects religion — a set of beliefs and practices — with the church, a physical, gathered fellowship of like-minded believers.[25] Because religion plays an irreplaceable role in the lives of so many people, the church ought to be afforded rights and privileges. Notably, Kelley applies his conception of the ecclesial community to the question of church-state relations and religious tax exemption.[26]

Because of religion’s role in the lives of believers, the church, as the incubator and propagator of religion, deserves tax exemption.

Abraham Kuyper’s Philosophy of Society

The argument of the preceding section is that economic and social theories ultimately fail to provide a sound and enduring rationale for religious tax exemption in a culture that increasingly views religion as outdated and the institutional church as subversive. If religious tax exemption is going to be preserved, a sound philosophy and theology of society that accounts for its metaphysical realities is required. What follows is the heart of this paper, namely, an articulation and defense of Abraham Kuyper’s notion of sphere sovereignty. I will contend that sphere sovereignty provides a theological framework from which arguments for religious tax exemption may be developed.

To provide a thorough definition of sphere sovereignty, the following section will first summarize Kuyper’s views through the lens of two speeches: the inaugural address at Free University (1880) and his third Stone Lecture delivered at Princeton University (1898). Through the arguments presented in these speeches, Kuyper’s understanding of the church-state relationship will be evaluated. Second, Kuyper’s grounding of sphere sovereignty in creational ordinances will be examined. The concern here is the biblical rationale he employs to support his political theory.

Sphere Sovereignty

Abraham Kuyper (1837-1920) was a Dutch theologian and politician who founded a political party (Anti-Revolutionary Party), a university (Free University), and a denomination (Reformed Churches in the Netherlands). Further, he served as the twentieth prime minister of the Netherlands (1901-1905) and was an elected member of the States General (national legislature) for several decades. Concerning his faith, he was a deeply committed Calvinist who championed God’s sovereignty as the most consequential truth in theology. In fact, Kuyper believed Calvinism related to the whole of life in such a comprehensive way that it should properly be understood as its own worldview.[27] His emphasis on God’s sovereignty is significant in his development of sphere sovereignty.

In 1880, Kuyper presided at the inauguration of Free University, delivering a convocation address titled “Sphere Sovereignty” wherein he outlined the broad principles of his political theology and philosophy of society. Concerning the structure of society, he argues for a form of pluralism rooted in God’s sovereignty and the structures of creation (creational ordinances).[28] Unsurprisingly, divine sovereignty is central in Kuyper’s rationale for founding the university: God possesses ultimate sovereignty and has the right to delegate limited authority to institutions like the new school. The principle of derivative sovereignty is thus crucial for justifying the existence of Free University. As Kuyperian scholar James Bratt notes, “Sphere sovereignty memorably unveils the pluralistic epistemology that warrants a distinctively Christian intellectual enterprise.”[29] This “pluralistic epistemology” finds expression in Kuyper’s social philosophy and political theory as well. Underlying his theology, philosophy, and politics, sphere sovereignty encapsulates an entire worldview for Kuyper. But these reflections pose the fundamental question: What does the idea of sphere sovereignty actually mean for Kuyper?

Although occasioned by the unique circumstances that accompany the founding of a university, Kuyper’s inaugural address combines political theory and theological reflection on God’s sovereignty in provocative and compelling ways. This is seen most clearly in his conceptualization of sphere sovereignty defined in a key section of the speech. Kuyper explains, “But here is the glorious principle of Freedom! This perfect Sovereignty of the sinless Messiah at the same time directly denies and challenges all absolute Sovereignty among sinful men on earth, and does so by dividing life into separate spheres, each with its own sovereignty.”[30] Unpacking this definition, Richard Mouw explains the basic insight of Kuyper’s “separate spheres” by noting, “It has the sense of each sphere having its own unique or separate character. Each cultural sphere has its own place in God’s plan for the creation, and each is directly under the divine rule.”[31] Kuyper elaborates on the idea further when he explains,

Human life… is so structured that the individual exists only in groups, and only in such groups can the whole become manifest. Call the parts of this one great machine ‘cogwheels,’ spring-driven on their own axles, or ‘spheres,’ each animated with its own spirit. The name or image is unimportant, so long as we recognize that there are in life as many spheres as there are constellations in the sky … each of which obeys its own laws of law, each subject to its own chief.”[32]

Thus, at its core, sphere sovereignty is a philosophy of society that divides life into distinct, autonomous jurisdictions. Although these spheres interact and may even overlap at points, there are clear lines of demarcation related to sovereignty that may not be crossed. Each sphere maintains its own derivative sovereignty at all times. The derivative nature of this sovereignty is significant and underscores Kuyper’s concern for God’s ultimate sovereignty. Sphere sovereignty is a model of diffused power rooted in the very structures of nature (creational ordinances).

Because authority is distributed across society’s vast array of institutions, no single entity or sphere accumulates ultimate sovereignty. Consequently, God’s position as supreme sovereign is preserved.

Intriguingly, Kuyper does not specify or speculate about the number of spheres within society. However, his criteria for identifying a sphere is straightforward: obvious patterns of cultural interaction indicate a Kuyperian sphere. Under this rubric, the family, business, art, science, university, church, and government qualify as spheres.[33] Significantly, these institutions exist independently from one another. That spheres are rooted in creational ordinances and derive their existence directly from God is a critical aspect of Kuyper’s thought. Mouw draws out this point by noting, “Governments do not grant these rights; they are called to recognize rights. We have families and churches and economic systems because they are grounded in creation itself.”[34] Governments, churches, and economic systems constitute distinguishable spheres in Kuyper’s framework. An appreciation of structural pluralism animates this concern, and in the context of founding Free University Kuyper’s contention is clear: The university possesses the right to operate independently from government interference because it occupies its own sphere and is accountable to its own authorities.

However, lest this preceding point lead someone to believe that Kuyper is condoning societal anarchy or endorsing a Kennedy-esque freedom for every sphere to define its “own concept of existence, of meaning, of the universe, and of the mystery of human life,”[35] it is important to clarify the ordering of authority within the sphere sovereignty framework. In his Free University inaugural address, Kuyper actually anticipates spheres vying and competing with one another for power. Returning to the metaphor of a cogwheel, he says, “The cogwheels of all these spheres engage each other, and precisely through that interaction emerges the rich, multifaceted multiformity of human life. Hence also rises the danger that one sphere in life may encroach on its neighbor.” To address this potential problem, Kuyper proposes empowering the state with limited oversight responsibility. In an important paragraph he explains:

[The state] must provide for sound mutual interaction among the various spheres… the sovereignty of the State, as the power that protects the individual and defines the mutual relationships among the visible spheres, rises high above them by its right to command and compel. But within these spheres that does not obtain. There another authority rules, an authority that descends directly from God apart from the State. This authority the State does not confer but acknowledges.”[36]

The notion of the state as a “sphere of spheres” with delegated oversight responsibilities would receive further development in subsequent speeches and articles.

Kuyper’s articulation of sphere sovereignty as a political theory reaches further maturation in his 1898 Stone Lectures. At the onset of his third lecture titled “Calvinism and Politics,” Kuyper identifies three sovereign realms: state, society, and church.[37] He reiterates familiar themes about God’s supreme sovereignty and the state’s derivative authority and explains that the sovereignty of God is the source of all temporal power. As he discusses the nature and scope of the state’s authority, he turns to theology to account for the state’s existence. He claims that “sin alone has necessitated the institution of government.”[38] Although magistrates are instruments of common grace, they are a necessary evil due to man’s depravity. Kuyper’s concern with the authority of the state reappears in his discussion on the role of society. He specifies multiple social spheres, including “the family, the business, science, art, and so forth,” and argues pointedly that they “do not owe their existence to the state…but obey a high authority within their own bosom.”[39] Kuyper argues that the “sovereignty in the individual sphere… is just as directly derived as the supremacy of state authority.”[40] Kuyper’s efforts to emphasize the parity between the state and social spheres is rooted in his abiding concern for the sovereignty of the spheres. Although the state retains its oversight responsibility it must never attempt to monopolize power. The state may intervene when a dispute arises between spheres, but as Kuyper says elsewhere, “to take over the tasks of society… lies outside [the state’s] jurisdiction.”[41] Again, an inviolable principle in Kuyper’s model is that the power of exclusive independent judgment and authoritative action resides within the domain of the spheres.[42]

Following a lengthy discussion about the state and its relationship with the social spheres, Kuyper devotes the balance of his third Stone Lecture to the church and its relationship with the state. This relationship deserves special attention because it bears directly on the issue of religious tax exemption. Kuyper’s emphasis on diffused and delegated sovereignty is again central to his argument.

Throughout his career, Kuyper supported the separation of church and state and warned against establishment. This is apparent in his 1879 political manifesto (Ons Program) where he argues that Calvinists must “give up any notion of a state church and accept the divorce of the marriage of state and church once sealed in an evil hour.” However, he immediately adds: “Yet no one should impute to us the intention to pull them apart in such a way that they would literally not have any dealings with one another.”[43] Thus, Kuyper is careful to distinguish between an appropriate separation of church and state and an infeasible separation of government from religion. This nuance is important, and one that is repeatedly emphasized throughout the Stone Lectures.

Returning to the concept of authority, Kuyper claims that the church and state must be separate because the state lacks the authority and competency to judge the internal workings of the church. As Kuyper notes, “The government bears the sword which wounds; not the sword of the Spirit, which decides in spiritual questions.”[44] Thus, the state is outside its jurisdiction if it attempts to address inherently spiritual questions such as the appointment of church officials, content of pastoral counsel, proper administration of the ordinances, or exposition of doctrine. Kuyper’s high view of church autonomy requires a religious free market; churches should be left free to proclaim their confessions and attract converts. By staying out of doctrinal disputes, the state recognizes its own limitations and respects the church’s sovereignty. Although Kuyper is firm in his Calvinist convictions, his concern for ecclesial autonomy leads him to support religious freedom for all Christian denominations.[45] His motto, expressed on the masthead of his newspaper, expressed his ideal for the church-state relationship: “A Free Church in a Free State.”[46] In this conception, both church and state exist within their own spheres and respect the rights, privileges, and responsibilities of one another.

While Kuyper is deeply committed to church sovereignty, the church is not given unlimited authority in his political theology. Kuyper concludes his speech at Princeton by recalling that even the church is held in check by the “sovereignty of the free personality.”[47] The church is sovereign within its own domain but may not exercise power over those who live outside its sphere. Thus, the state respects its citizens by allowing them to pursue religion or no religion according to the dictates of their own conscience.

The state honors the sovereignty of the individual by respecting the sovereignty of the institutions they join, in this case, the church. From Kuyper’s perspective, this arrangement allows even the secular state to honor God and accomplish its divinely ordained purpose.

Creational Ordinances

Although space considerations do not allow for a full examination of the theological underpinnings of sphere sovereignty, a possible concern must be addressed. Stated succinctly, is the idea of sphere sovereignty biblical? Is there biblical warrant to substantiate Kuyper’s political theology and philosophy of society? If the contention of this paper is that sphere sovereignty provides the theological rationale for religious tax exemption, it is critical to defend the theological integrity of Kuyper’s project. Straightforwardly, if sphere sovereignty as a concept is not biblical, the thesis of this paper fails.

As mentioned previously, Kuyper roots much of his argument for structural pluralism in God’s sovereignty and the reality of creational ordinances. While the Bible is replete with affirmations attesting to God’s sovereignty, the concept of creational ordinances is more opaque. Because Kuyper’s theory is sustained or repudiated largely on the veracity of creational ordinances, their biblical evidence must be considered.

Kuyper himself addresses the question of biblical support for sphere sovereignty in his inaugural address at Free University. He argues,

“Should anyone ask whether ‘sphere sovereignty is really derived from the heart of Scripture and the treasury of Reformed life, I would entreat him first of all to plumb the depths of the organic faith principle in Scripture, further to note Hebron’s tribal law for David’s coronation, to notice Elijah’s resistance to Ahab’s tyranny, the disciples’ refusal to yield to Jerusalem’s police regulations, and, not least, to listen to their Lord’s maxim concerning what is God’s and what is Caesar’s.”[48]

Without examining each biblical example in detail, it is obvious what each example has in common: Each illustrates in one way or another the separation of powers. For Kuyper, this evidence points to a divine interest in the separation of powers which is rooted in the very fabric of creation itself.[49] Thus, while the Bible may not explicitly provide a theory of sphere sovereignty, it reveals God’s design for the ordering of society. The principles that dictate the social organization of society are evidences of creational ordinances.[50] These ordinances are hardwired into nature and are discerned through the order and structure exhibited in the world. God’s creation ordinances are what allow people to develop a plurality of fields of endeavor and function in a multiplicity of social spheres.[51]

Applying Sphere Sovereignty to Tax Exemption

Preceding sections have sought to define terms such as religious tax exemption and sphere sovereignty. In short, religious tax exemption is not a government subsidy; it is merely a withdrawal of the government’s demand on churches and religious organizations for financial support. Sphere sovereignty is a conception of society that divides life into distinct, autonomous jurisdictions. Although these spheres may overlap at points, there are clear lines of demarcation between them relating to authority. Already in discussions about structural pluralism implications for tax exemption have likely become apparent. Likewise, the undergirding theological rationale of sphere sovereignty implicitly challenges the expectations of the state regarding taxing power. Therefore, this concluding section will seek to make explicit what has been implied and intimated thus far by applying Kuyper’s insights directly to the issue of tax exemption in two ways. First, the nature of the church as a divine institution answerable to God will be considered. Second, taxation’s inherent power to destroy will be analyzed from the perspective of sphere sovereignty.

Nature of the Church

As previously discussed, the church fulfills a significant role in helping believers pursue questions of ultimate meaning. Historically, this is why the church has been the locus of religious practice and catechesis. God meets with His people in the church, ministering to them through the administration of the sacraments, worship, and preaching. In terms of authority, the church lives “coram Deo.”[52] Using Kuyper’s vocabulary, the church occupies its own sphere where it carries out its tasks, governs its members, and submits to God’s authority. According to Kuyper, the church should be allowed to fulfill its calling unmolested by actors from other spheres. Although the state as a “sphere of spheres” possesses delegated power to intervene when disagreements break out between spheres, the state does not have the right to interfere with the church’s internal proceedings. To do so would violate the sovereignty of the church and involve the state in matters where it is incompetent.

Significantly, the nature of the church dictates its ultimate allegiance. The church is accountable to God; it was founded by Him, exists for Him, and is constantly sustained by Him.

The New Testament’s practice of referring to the church as the “bride of Christ” (Eph. 5:25-27; Rev. 19:7-9, 21:2-4) reinforces this point. Thus, getting practical, the very nature of the church suggests that a theological rationale for why churches should be tax-exempt is that they are divine institutions answerable exclusively to God. Religious tax exemption is an implication of the state’s recognition that it does not control the church. Rather, the state acknowledges a greater authority than itself is present when it exempts churches from paying taxes.

Taxation and the Power to Destroy

While Jesus promised His disciples that the gates of hell will not prevail against His church (Mat. 16:18), no individual congregation has ever been guaranteed perpetual existence. For centuries churches have been started, served the needs of members for a period of time, and disbanded. There are many reasons for why a particular church may dissolve including lack of resources, lack of members, or poor leadership. In other words, the closure of a church is not uncommon; in the United States, approximately 9,000 churches close each year.[53]. Although Kuyper would likely be grieved by the number of churches closing in America, he would affirm their right to do so. This is because churches are allowed to close on their own terms. Employing Kuyperian language, churches are self-governing spheres answerable to God and retain the right to make principal decisions including whether or not to disband. The state should respect these decisions.

The discussion about a church’s right to disband is immediately relevant to the issue of tax exemption because of what taxation represents. Chief Justice John Marshall famously observed that “the power to tax involves the power to destroy”[54] Of course it is important to recognize that not all taxes are totally destructive; there is nothing inherently sinful about a reasonable tax rate (Mat. 22:21). However, there is an underlining principle at stake when it comes to taxing churches. According to the principles of sphere sovereignty, churches occupy self-governing spheres. No outside authority or coercive power should ever be brought to bear against the church. However, imposing taxes is inherently a form of exercising authority; it represents a breach of church sovereignty and an overstepping of boundaries. Thus, the intrinsically coercive nature of taxation represents a sound theological rationale for maintaining religious tax exemption. It is always the state’s responsibility to protect the church, but taxation, by its very nature, is a threat to and assault on church sovereignty.

Although it may sound alarmist to claim that taxation constitutes a threat on church sovereignty, consider the following statistics: There are currently 450,000 churches in America and if these churches were taxed, they would cumulatively owe $35.3 billion in federal income tax, $6.1 billion in state income tax, and $26.2 billion in property taxes.[55] Further, if the parsonage exemption on ministers’ housing were removed, American clergy would owe $2.3 billion over the next five years. Worth noting is that the average American pastor with a congregation of 300 members earns less than $28,000 per year. Only five percent of all pastors earn more than $50,000.[56]

In short, the power to tax is the power to destroy, and if religious tax exemption is revoked hundreds of thousands of churches in the United States would lose their property and buildings and be forced to disband.

Smaller, rural churches would suffer dramatically as would churches occupying valuable land in the heart of America’s great cities. Thus, taxation not only violates the philosophical and theological principles elaborated in Kuyper’s sphere sovereignty model, it represents a literal existential threat to many churches.


Although there are many areas of concern for religious liberty in the United States, the contention of this paper is that the revocation of religious tax exemption represents an existential threat to churches. Although recent debates have focused on wedding providers, there are already calls for churches to “pay their fair share.” Recall Mark Oppenheimer’s demand that churches acquiesce to the demands of the sexual revolution or forfeit their tax-exempt status. To churches that refuse to change their teachings, Oppenheimer sneers: “…when that day comes [when they lose their tax exemption], it will be long overdue.”[58]

Admittedly, churches and religious organizations in America have previously not had to consider the possibility of losing their tax-exempt status. After all, religious tax exemption has been the norm since the founding of the country. However, as the church finds itself increasingly out of step with culture, particularly on issues related to human sexuality and marriage, it will be forced to articulate what could previously be assumed. While there are economic, historical, and legal arguments for maintaining the status quo in terms of tax policy, these arguments are unconvincing due to their failure to address underlining philosophical and theological considerations. Thus, the need for a deeper, more robust vision of the role of religion, the nature of the church, and the relationship between church and state. On this score, Kuyper’s framework of sphere sovereignty offers a way forward for reconceiving these issues and the church’s future in a pluralistic society.

David Closson, Th.M.

David Closson serves as the director of the Center for Biblical Worldview at Family Research Council where he researches and writes on life, human sexuality, religious liberty, and related issues from a biblical worldview. He is published with Fox News, National Review, Real Clear Politics, The Council for Biblical Manhood and Womanhood, The Gospel Coalition, Townhall, Decision Magazine, and Christian Post. David is a regular guest on “Washington Watch,” FRC’s national television and radio program heard on over 800 stations in 48 states. 

Currently, David is completing a Ph.D. in Christian ethics at Southwestern Baptist Theological Seminary. David is a graduate of The Southern Baptist Theological Seminary (M.Div., Th.M.) and the University of Central Florida. David lives in Washington, D.C., and is a member of Capitol Hill Baptist Church. 


[1] Oppenheimer wrote, “Rather than try to rescue tax-exempt status for organizations that dissent from settled public policy on matters of race and sexuality, we need to take a more radical step. It’s time to abolish, or greatly diminish, their tax-exempt status.” Mark Oppenheimer, “Now’s the Time to End Tax Exemptions for Religious Institutions,” Time Magazine, June 28, 2015, http://time.com/3939143/nows-the-time-to-end-tax-exemptions-for-religious-institutions/.

[2] Obergefell v. Hodges, 576 U.S. ___ (2015), 6. Presciently, Alito also observed that the decision “will be exploited by those who are determined to stamp out every vestige of dissent.” Alito’s concerns about religious liberty were echoed by Justice Clarence Thomas, who wrote: “Had the majority allowed the definition of marriage to be left to the political process—as the Constitution requires—the People could have considered the religious liberty implications of deviating from the traditional definition as part of their deliberative process. Instead, the majority’s decision short-circuits that process, with potentially ruinous consequences for religious liberty,” 19.

[3] Masterpiece Cakeshop v. Colorado Civil Rights Commission, 584 U.S. ___ (2018). The Court ruled that Phillips was treated with hostility because of his religious beliefs and that U.S. law must be applied in a manner that is neutral toward religion. Although the Supreme Court ruled on narrow grounds in favor of Phillips, most conservative court observers were hopeful that the decision set a good trajectory for religious liberty. For this opinion, see Andrew T. Walker, “Masterpiece Ruling: A Good Trajectory for the Future of Christians in the Public Square,” ERLC, June 4, 2018, http://erlc.com/resource-library/articles/masterpiece-ruling-a-good-trajectory-for-the-future-of-christians-in-the-public-square.

[4] In addition to further religious liberty challenges facing the wedding industry, religious liberty remains an ongoing concern for military chaplains, Muslim mosques facing unfair zoning laws, athletic coaches leading team prayer, student graduation speeches, and religious memorials. For a list and summary of several pending cases with religious liberty concerns, see https://firstliberty.org/cases/.

[5] Walz v. Tax Commission of City of New York, 397 U.S. 664 (1970). Chief Justice Warren Burger highlights several possible rationales for religious tax exemption before ultimately resorting to historical arguments. Although he hints at it, he does not fully elaborate a pluralism theory. Nevertheless, he rejects the social benefit theory (contra Justice William J. Brennan) as a persuasive rationale, a move heartily endorsed by this paper.

[6] Elizabeth Livingston, “A Bright Line Points Toward Legal Compromise: IRS Condoned Lobbying Activities for Religious Entities and Non-Profits,” Rutgers Journal of Law and Religion 9.1 (Spring 2008), 2.

[7] The Old Testament mentions religious tax exemption. See Erika Lietzan, “Tax Exemptions and the Establishment Clause,” Syracuse Law Review, January 1, 1999, 973–74. Lietzan’s examples are Genesis 47:26 (“Joseph made it a law over the land of Egypt unto this day, that Pharaoh should have the fifth part; except the land of the priests only”) and Ezra 7:24 (“It shall not be lawful to impose toll, tribute, or custom upon… priests… or ministers of the house of God”).

[8] Livingston, “A Bright Line Points Toward Legal Compromise: IRS Condoned Lobbying Activities for Religious Entities and Non-Profits,” 2-3.

[9] John Witte, “Tax Exemption of Church Property: Historical Anomaly or Valid Constitutional Practice?”, Southern California Law Review 64, no. 2 (January 1, 1991): 368. Witte’s article was included (and expanded) in John Witte, Religion and The American Constitutional Experiment: Essential Rights and Liberties (Boulder, CO: Westview Press, 2000), 185–215.

[10] As noted by Lietzan, the pace of disestablishment varied considerably among the states. While Virginia, New York, Maryland, and North Carolina officially disestablished in 1787, other states took much longer. For example, Massachusetts did not disestablish the Congregational Church until 1833. For additional disestablishment dates, see Lietzan, “Tax Exemptions and the Establishment Clause,” 977–78.

[11] Lietzan, 980. Lietzan summarizes the history of tax exemption in America, writing, “Exemptions from property tax of property dedicated to religious uses or belonging to religious associations, while differently formulated and worded across the several states and through the two centuries, have been a consistent and stable feature of our tax collection system, dating to the very point in time when states disestablished their churches, and they remain a consistent feature of state tax schemes. The federal government too, has always exempted religious institutions… indeed every federal income tax law since the Revenue Act of 1894 has contained the religious and charitable organization exemption that eventually became the 501 of the Internal Revenue Code,” 979-80.

[12] Cafardi and Cherry provide a succinct definition of the social benefit theory which they label the “public benefit theory.” They write, “The public benefit theory is a very basic rationale supporting the existence of the tax-exempt sector simply because tax-exempt organizations perform activities (education, health care, social welfare, moral or mental improvement, etc.) which benefit the common good, and therefore their existence should be encouraged by the Government in the nature of a tax exemption.” For further explanation of the social/public benefit theory, see Nicholas P. Cafardi and Jaclyn Fabean Cherry, Understanding Nonprofit and Tax Exempt Organizations (New Providence, NJ: LexisNexis, 2012), 51–52.

[13] Justice Brennan’s concurrence in Walz v. Tax Commission of City of New York, 397 U.S. 664 (1970) is the most famous example from the courts. The crux of Brennan’s argument is that government provides tax exemptions to churches and religious organizations because “they… contribute to the well-being of the community in a variety of non-religious ways, and thereby bear burdens that would otherwise either have to be met by general taxation, or be left undone, to the detriment of the community.”

[14] Andy Lewis, “Some Positive Benefits Churches Bring to Communities,” ERLC, May 1, 2015, http://erlc.com/resource-library/white-papers/some-positive-benefits-churches-bring-to-communities.

[15] Cnaan’s in-depth analysis of 90 congregations in Chicago, Philadelphia, and Fort Worth revealed that the average church in an urban environment generates over $1.7 million annually in economic impact. Cnaan’s study shows that education ($679, 511), direct church spending ($549,073), and what he calls “catalytic economic value” ($478,665) account for the three largest categories. For the breakdown of Cnaan’s study, see Ram Cnaan, “The Economic Halo Effect of Historic Sacred Places,” Sacred Places: The Magazine of Partners for Sacred Places, 2016, 4.

[16] According to Cafardi and Cherry, the subsidy theory holds that tax exemption is a form of government grant or subsidy to those organizations which qualify as tax exempt. Income measurement theory states that it is inappropriate to use traditional categories of taxable revenue for non-profits, and thus they remain tax exempt. The donative theory argues that the willingness of the public to contribute to tax-exempt organizations demonstrates their worthiness and neediness and thus suggests the government should provide a “shadow subsidy” in the form of a tax exemption. The historical theory says that the most basic rationale for the existence of the tax-exempt sector is that Congress wrote the law that way and that it would be imprudent to change the status quo. Finally, the double taxation theory argues that since money given to tax-exempt organizations has already been taxed it would be immoral to tax it again. Cafardi and Cherry, Understanding Nonprofit and Tax Exempt Organizations, 54-60.

[17] Walz v. Tax Commission of City of New York, 397 U.S. 664 (1970) at 674.

[18] Walz v. Tax Commission of City of New York, 397 U.S. 664 (1970) at 674.

[19] Walz v. Tax Commission of City of New York, 397 U.S. 664 (1970) at 676. Burger’s primary argument in Walz is that religious tax exemption does not violate the Establishment Clause of the U.S. Constitution. To this concern he writes, “The grant of a tax exemption is not sponsorship since the government does not transfer part of its revenue to churches but simply abstains from demanding that the church support the state.”

[20] Walz v. Tax Commission of City of New York, 397 U.S. 664 (1970) at 675.

[21] Walz v. Tax Commission of City of New York, 397 U.S. 664 (1970) at 689. Addressing the issue of tax exemption, Brennan writes, “government grants exemptions to religious organizations because they uniquely contribute to the pluralism of American society by their religious activity. Government may properly include religious institutions among the variety of private, nonprofit groups that receive tax exemptions, for each group contributes to the diversity of association, viewpoint, and enterprise essential to a vigorous, pluralistic society.” Cafardi and Cherry’s explanation of Brennan’s rationale in Walz is helpful, as is their explication of “pluralism theory.” See Cafardi and Cherry, Understanding Nonprofit and Tax Exempt Organizations, 53-4.

[22] John Corvino, Ryan T. Anderson, and Sherif Girgis, Debating Religious Liberty and Discrimination (New York: Oxford University Press, 2017), 131. The rest of this paragraph attempts to summarize the crux of Anderson and Girgis’ argument on pages 125-31.

[23] Dean M. Kelley, Why Churches Should Not Pay Taxes (New York: Harper & Row, 1977), 49. While Kelley may overstate his case on which aspect of religion — he argues for the primacy of fellowship — is most important for achieving answers to life’s ultimate questions, he is nonetheless helpful in highlighting the formative nature of the institutional church.

[24] Kelley, 49.

[25] Kuyper himself makes the connection between religion and the church. Writing in his 1879 political manifesto, he says, “The religious life of the nation is for the greater part carried on within the form of a church, and it is therefore in that form, and in that form alone, that government must get in touch with this expression of national life.” See Abraham Kuyper, Our Program: A Christian Political Manifesto, ed. Harry Van Dyke (Bellingham, WA: Lexham Press, 2015), 354.

[26] Kelley, 57. Regarding the codification of religious tax exemption in the United States, Kelley writes, “Tax exemption is of the very essence of that relationship between government and religion: it neither gives to the organizations of religion anything they would not otherwise have nor takes away from them anything they have attracted from adherents on their own merits, and the same applies equally to all religious groups.”

[27] Craig G. Bartholomew, Contours of the Kuyperian Tradition: A Systematic Introduction (Downers Grove, Illinois: IVP Academic, 2017), 104.

[28] Vincent Bacote, The Spirit in Public Theology: Appropriating the Legacy of Abraham Kuyper (Grand Rapids: Baker Academic, 2005), 61.

[29] James D. Bratt, Abraham Kuyper: Modern Calvinist, Christian Democrat (Grand Rapids: Eerdmans, 2013), 130.

[30] Abraham Kuyper, Abraham Kuyper: A Centennial Reader, ed. James D. Bratt (Grand Rapids: Eerdmans, 1998), 467.

[31] Richard J. Mouw, Abraham Kuyper: A Short and Personal Introduction (Grand Rapids: Eerdmans, 2011), 23.

[32] Kuyper, Abraham Kuyper, 467.

[33] Mouw, Abraham Kuyper, 23.

[34] Mouw, 24. This point about creation ordinances will be developed in the next section. A focus on government and Kuyper’s approach to church-state relations will also be discussed.

[35] Planned Parenthood of Southeastern Pennsylvania v. Casey, 505 US 833 (1992) at 851.

[36] Kuyper, Abraham Kuyper, 468 (emphasis original).

[37] Abraham Kuyper, Lectures on Calvinism (Peabody, Mass.: Hendrickson Publishers, 2008), 66.

[38] Kuyper, 69.

[39] Kuyper, 77. Discussing the authority of the various spheres, he adds “In this independent character a special higher authority is of necessity involved and this highest authority we intentionally call sovereignty in the individual spheres, in order that it may be sharply and decidedly expressed that these different developments of social life have nothing above themselves but God, and that the state cannot intrude here, and has nothing to command their domain. As you feel at once, this is the deeply interesting question for our civil liberties,” 77-8.

[40] Kuyper, 84.

[41] Abraham Kuyper, Christianity and the Class Struggle (Grand Rapids: Piet Hein, 1950), 57–8. The full quote reads: “Finally, as a last concrete point, a brief word about this state intervention. God the Lord unmistakably instituted the basic rule for the duty of government. Government exists to arrange His justice on earth, and to uphold that justice. To take over the tasks of society and of the family, therefore, lies outside its jurisdiction. With those it is not to meddle… What it may therefore do in no case is to grant such assurance of justice to one sphere and withhold it from another,” 57-8.

[42] Kuyper, Lectures on Calvinism, 82.

[43] Kuyper, Our Program: A Christian Political Manifesto, 354.

[44] Kuyper, Lectures on Calvinism, 92.

[45] Kuyper’s defense of religious liberty does not include non-Christian denominations. This is seen in his conception of a “Committee of Correspondence” that would advise the government on religious matters. The composition of the committee would be Christian ministers appointed by the various denominations. However, he says, “Of course there can be no question here of Jewish, Unitarian, or atheist bodies. A church ceases to be church the moment Christ ceases to be worshiped as Lord and Master.” See Kuyper, Our Program: A Christian Political Manifesto, 357.

[46] Kuyper, Lectures on Calvinism, 85. Although he does not mention it in the course of the Stone Lectures, Kuyper pursued his vision of a “free church in a free state” to the point where he advocated for the revision of the Belgic Confession (1561), the oldest doctrinal statement of faith in the Reformed church. Kuyper dissented from Article 36, which conceded to the civil magistrate the right “to protect the sacred ministry” and thus to “remove and prevent all idolatry and false worship.” As Heslam observes, “Kuyper refused to accept [the view] that the government was obliged… to judge which of the various denominations was the true church,” Peter S. Heslam, Creating a Christian Worldview: Abraham Kuyper’s Lectures on Calvinism (Grand Rapids: Eerdmans, 1998), 163.

[47] Kuyper, 93.

[48] Kuyper, Abraham Kuyper, 480.

[49] Richard J. Mouw, Religion, Pluralism, and Public Life: Abraham Kuyper’s Legacy for the Twenty-First Century, ed. Luis E. Lugo (Grand Rapids: Eerdmans, 2000), 97-8.

[50] Spykman, quoting H. van Riessen, argues that “the Bible surely teaches such diversity in so far as it then manifested itself in practical living.” Spkyman’s contention is that ordinances built into creation are borne out in the ways in which society constitutes itself. See Spykman, Exploring the Heritage of John Calvin, 175.

[51] James W. Skillen and Rockne M. McCarthy, eds., Political Order and the Plural Structure of Society (Atlanta: Scholars Press, 1991), 242.

[52] Defining “coram Deo,” Sproul writes, “To live coram Deo is to live one’s entire life in the presence of God, under the authority of God, to the glory of God,” R.C. Sproul, “What Does ‘Coram Deo’ Mean?,” Ligonier Ministries, https://www.ligonier.org/blog/what-does-coram-deo-mean/.

[53] Thom Rainer, “13 Issues for Churches in 2013,” ChurchLeaders, January 15, 2013, https://churchleaders.com/pastors/pastor-articles/164787-thom-rainer-13-issues-churches-2013.html.

[54] McCulloch v. Maryland, 17 U.S. 316 (1819) at 431.

[55] Dylan Matthews, “Analysis: You Give Religions More than $82.5 Billion a Year,” Washington Post, https://www.washingtonpost.com/news/wonk/wp/2013/08/22/you-give-religions-more-than-82-5-billion-a-year/.

[56] “Churches and Taxes,” https://churchesandtaxes.procon.org/#background.

[57] Oppenheimer, “Now’s the Time to End Tax Exemptions for Religious Institutions.”

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