Could Gay Marriage Lead to . . . Tax Reform?

Morningafterwise, we didn’t have to wait long for conjectures like this from Time:

Now’s the Time to End Tax Exemptions for Religious Institutions

. . .  Rather than try to rescue tax-exempt status for organizations that dissent from settled public policy on matters of race or sexuality, we need to take a more radical step. It’s time to abolish, or greatly diminish, their tax-exempt statuses.

Or the New York Times a few days before the Obergefell ruling came down:

Schools Fear Gay Marriage Ruling Could End Tax Exemptions

Conservative religious schools all over the country forbid same-sex relationships, from dating to couples’ living in married-student housing, and they fear they will soon be forced to make a wrenching choice. If the Supreme Court this month finds a constitutional right to same-sex marriage, the schools say they will have to abandon their policies that prohibit gay relationships or eventually risk losing their tax-exempt status.

The religious schools are concerned that if they continue to ban gay relationships, the Internal Revenue Service could take away their tax-exempt status as a violation of a “fundamental national public policy” under the reasoning of a 1983 Supreme Court decision that allowed the agency to revoke the tax-exempt status of schools that banned interracial relationships.

I’ve got a simple remedy for this: let’s abolish the corporate income tax. Problem solved.

Aside from the genuine problem of the government deciding what it and isn’t a bona fide religion (such as Scientology), and the problem of trying to untangle the labyrinth of civil rights law as it may now apply to gay married couples (the little old Baptist lady who won’t rent her extra unit to an unmarried straight couple has generally received a pass in housing discrimination laws, but now?), the corporate income tax is a corrupt mess of special deals and complexities that nearly all economists agree retards economic growth.  As is well known, the U.S. now has the highest corporate income tax rate in the industrialized world, but many major corporations pay very little because of how it can be manipulated. Let’s get rid of it and replace it with some kind of consumption tax.

It might not just be the corporate income tax that suddenly has a new constituency for reform.  I’m looking forward to next April 15, when so many new gay married couples file their first 1040s together, and say—“Hey wait a minute! What’s with this marriage penalty business!” 

My old mentor M. Stanton Evans liked to joke about that favorite 1960s-era cliché: “Any country that can land a man on the moon can abolish the income tax.” So here’s my corollary for today:

“Any country that can legalize gay marriage can reform the tax code.”

More seriously, there remains the problem of accreditation for religious colleges that refuse to submit tamely to the new order.  Look for the Dept. of Education to start churning out Title IX-style “Dear Colleague” letters offering the “informal guidance” that they better start flying the rainbow pride flag, or else.

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