It is a matter of Taiwanese law. But general principles of freedom of religion or belief, and common sense, also tell us that religious and spiritual paths should not be taxed.
by Massimo Introvigne*
*Conclusions of the session “Religion in Taiwan After the 2024 Elections: Social and Tax Issues” at the European Academy of Religion 2024 conference, Palermo, Italy, May 20, 2024.
An article already published in Bitter Winter on May 31st, 2024.
We have heard in this session that considering the monetary offerings given by Tai Ji Men dizi (disciples) to their Shifu (Grand Master) in the so-called “red envelopes” as tuition fees for a (non-existing) cram school rather than as gifts derived from a misconstruction of the master-disciple relationship and of how martial arts teachings are imparted. It was also a disaster, and an example of the abuses of taxation that wise men since Ibn Khaldūn have warned may lead to the decline of once prosperous societies. And the hope has been expressed that the new President inaugurated today after the 2024 elections may finally solve the case.
One question was, however, taken for granted that should perhaps be shortly discussed in my conclusions. Cram schools’ tuition fees are taxable. Gifts from disciples to master in spiritual organizations are not taxable. The question is why.
It can have a very simple answer: because in Taiwanese law and practice gifts to masters of qigong, martial arts, and self-cultivations by their disciples are not taxed. They are not taxed for many other similar organizations, and they should not be taxed for Tai Ji Men either.
This is surely true, Taiwanese scholars tell us, with respect to Taiwan’s law.
However, while this is true, the Tai Ji Men case remains unsolved. And there are many other cases throughout the world that remain unsolved where taxes are used as a tool of discrimination against religious and spiritual minorities. This indicates that it is not enough to persuade courts of law. There is also the court of public opinion.
We are in Italy, a country where from the 19th century, with precedents as old as the Middle Ages, one of the most common subject of satirical cartoons is the fat Catholic priest who eats well and becomes rich thanks to the gifts of his poor and naïve parishioners. It is still an argument of anti-Catholic and anti-religious controversy today, which explains why Pope Francis in how he dresses and behaves often adopts a style of poverty that some do not like or regard as excessive. We hear periodically criticism and even legal actions contesting the principle that religions should be tax-exempt, filed by those who argue that spiritual organizations are not better than many other groups that pay taxes, and indeed have been plagued by multiple scandals.
The argument is not used in Italy only. It was the subject matter in 1970 of one of the most famous decisions of the U.S. Supreme Court, “Walz v. Tax Commission of the City of New York.” One Frederick Walz, who owned real estate in Staten Island, New York, complained that the fact that he should pay taxes on it, while religious organizations did not, violated the provision of the First Amendment mandating the separation of church and state.
The “Walz” decision is so important because it did not limit itself to note the obvious, i.e., that the drafters of the American Constitution were inspired by a “benevolent neutrality” towards religion, which is different from French-style “laïcité.” They turned Walz’s argument on its head, stating that in fact making religions non-taxable was needed to protect the separation of church and state. The decision concluded that “exemptions for religious organizations created only a minimal and remote involvement between church and state, and far less of an involvement than would be created by taxation of churches… The exemption created a more minimal and remote involvement between church and state than did taxation because it restricted the fiscal relationship between church and state and reinforced the desired separation insulating one from the other.”
If the state would be allowed to tax religious and spiritual organizations, it would have the power to control them by modulating taxes. As the U.S. Supreme Court stated in the 1819 decision “McCulloch v. Maryland,” “the power to tax involves the power to destroy.” American legal scholar Ken Jacobsen has discussed the implications of this principle for the Tai Ji Men case. Religious liberty thus requires that religions be tax-exempt, and the exemption in fact preserves the principle of separation rather than denying it.
This is the main argument for making gifts to religious and spiritual organizations, and the property purchased with these gifts, non-taxable, but is not the only one. Economists who have looked at religion and spirituality have concluded that they allow governments to save significant money. Many of them have charitable institutions that provide services for the needy, including disaster relief, at their expenses or at the expenses of their parishioners. The state would (perhaps) be able to provide the same services, but it would spend the taxpayers’ money.
Economists have also argued that many religious and spiritual organizations improve the physical and psychological well-being of their members, keep them away from alcoholism and drug addictions, and teach in general a healthy lifestyle. If this is true, then spiritually motivated organizations help governments save millions in medical expenses. Some religious organizations also organize cultural events and performances at their own or their members’ expenses, which benefit the prestige of their countries and their governments domestically and internationally.
This is certainly true for Tai Ji Men and Taiwan. Those who study Tai Ji Men hear countless testimonies from dizi who claim that they have derived crucial health benefits from the practice of Qigong in the academies. Dizi also bring spectacular cultural performances to the whole world, certainly promoting the international image of Taiwan, and they are volunteers, all traveling at their own expenses.
There is of course a rich literature on this subject, and the conversation can continue. I believe I have contributed the first elements to answer the question why both religions and spiritual communities such as Tai Ji Men should be tax-exempt. It is a matter of Taiwanese law, but it is also a matter of freedom of religion or belief and of common sense. We should not be shy when defending the right of religions and spiritual paths not to be taxed.