Tax subsidies vs. non-tax subsidies

[A.E. Brownstein]

Two quick responses, Eugene.

First, would economists distinguish between the government giving a 
religious institution cash subsidies (enough to hire a person for a 
particular job with appropriate benefits) to hire someone to provide some 
secular assistance to a religious school or charity and the government 
hiring a person that satisfied the religious institution's employment 
criteria (including religious belief) and assigning the employee to the 
institution to provide the same assistance? Assuming that this is a general 
program available to both secular and religious non governmental providers, 
if the former is constitutional, is the latter constitutional?

Second, the answer to these exemption/subsidy issues may not be either of 
the two alternatives that you suggest (as Marty says, notwithstanding what 
economists think). Working out a framework to reconcile conflicting values 
in the religion clause area may involve line drawing that is in part 
arbitrary and in part represents an assessment of risks to be avoided and 
goals to be achieved. Tax exemptions as Marty argues may be less prone to 
manipulation and government favoritism, taxing religious institutions may 
be viewed as particularly threatening to religious autonomy, tax deductions 
are more consistent with a tradition of religious voluntarism than 
subsidies etc.

Or to put the issue in a broader perspective, many religious communities, 
particularly minority faiths, need both independence and autonomy (for want 
of a better term call it reserved private space) and the ability to 
participate with others in the larger community, economy, society, and 
polity (call that access to public space).  Serving both objectives 
requires putting some limits on turning government resources (and even some 
private resources e.g. corporate commercial employers) into reserved 
private space. Distinguishing between tax exemptions, vouchers, tax 
deductions, direct subsidies etc are arguably imprecise but useful ways to 
accomplish those objectives. Certainly one may argue that compared to many 
other societies, religious liberty and equality (and religion generally) 
have flourished in the U.S. during the period in which those distinctions 
have been recognized.

Alan Brownstein


>Eugene writes
>
>It seems to me that this brings up the old question of the extent to which 
>tax exemptions are effectively subsidies.  The Court has generally held 
>that they are, see, e.g., Texas Monthly v. Bullock (religion-preferential 
>tax exemption violates the Establishment Clause); Bob Jones Univ. v. U.S. 
>(the government has a compelling interest in not subsidizing 
>discrimination, which justifies denying tax exemption to a racially 
>discriminatory schools); Taxation With Representation v. Regan (special 
>tax exemption for veteran's groups that lets them, but not other 
>tax-exempt groups, lobby is permissible under the Free Speech Clause 
>because it's just a subsidy to those groups).  Economists likewise tell us 
>that they are.
>
>If this is so, then it seems to me that either (1) religious institutions 
>*must* be denied tax exemptions under the Establishment Clause, because 
>they are legally allowed to discriminate based on religion and because 
>they often do so discriminate, or (2) religious institutions *need not* be 
>denied the ability to participate in generally available aid programs (at 
>least ones in which the money is distributed based on objective criteria) 
>even if they discriminate, since those programs are just like tax 
>exemptions.  (This intentionally doesn't speak to whether the First 
>Amendment *requires* that religiously discriminatory organizations be 
>included in the programs, only to whether it *forbids* such inclusion.)
>
>Now perhaps, as Marty suggests, the answer is indeed different when the 
>aid program (unlike exemption programs) is administered pursuant to 
>subjective criteria rather than objective ones.  But if the government 
>pays for the cost of all school bus service, lets schools hire their own 
>drivers, and doesn't object when religious schools hire based on religion, 
>then it strikes me as quite similar to the government giving a tax 
>exemption to all donors to charitable causes, and doesn't object when 
>religious recipients of the donations hire based on religion.
>
>Eugene
>
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