3% Taxes?
The 3% claim seems to be easily debunked. According to this article, in 2015 the IRS received $1.454 trillion from income taxes. There were 150.6 million tax returns, and given an average taxpayer income of $71,258 that makes an average of $9,655, or 13.5% in taxes.
In order to only pay 3% in taxes, that would mean the average taxpayer would only spend $2,138 in taxes. The same 150.6 million taxpayers means this totals $.322 trillion. In other words, if the 3% claim is true, then churches would have to pay $1.132 trillion in taxes. Nobody claims churches make anywhere near that amount.
I'm not sure how this 3% claim started, but it's obviously false.
$83.5 Billion in Taxes?
After that last one, this seems a much more reasonable claim. But is even this one true? This is a bit more difficult. This figure was calculated in a Secular Humanist research report and then extra was added by the Washington Post.
While many of the figures I may question their methodology, but I don't think they are trying to be exact, they're just trying to give a ballpark figure. But there is one important difference.
They say that according to Giving USA, religions received $100.95 billion in donations in 2009. (This number has gone up since the time this article came out. In 2017, it is up to $127.37 billion.) From there, they say "we assumed religions would be taxed at the maximum federal corporate tax rate, given their revenue." which at the time was 35%, so they come up with a figure of $35.3 billion.
However, the problem with that figure is that corporations only pay taxes on profit, not revenue. The beginning part of their report largely argued that churches should not be considered "charity" given that a lot of their money goes into overhead. A corporation deducts business expenses before paying taxes.
Reading another analysis, they point out that in 2016, the average corporate profit margin is 7.5% (median 6.5%) and the most successful industry had an 18.3% net profit margin. (Given that charities are nonprofit organizations, I'm not sure how that would fit in, but let's meet their assumptions that churches are really corporations, and they make a profit.)
I also questioned their bracketing methodology, but looking at the corporate tax brackets, they're a little weird. Since 2018 however, there is only a single corporate tax rate: 21%. That makes it easier to calculate, but it is also an observation that the changing tax code has also reduced the benefit the government would receive by taxing churches.
So given more updated values, it would be more like $127.37 billion x 20% profit x 21% tax rate = $5 billion. And that's assuming a generous profit margin-- 7.5% would give $2 billion.
The next largest source is from property taxes. They estimate using 47 churches in Tampa, claiming property values are about average in the nation, getting an average church land+building value of $1.7 million. Multiply by 335,000 congregations, averaged across 50 states, calculated property tax by state, then added together to get $26.2 billion.
Is that a reasonable way to estimate? I'm not sure. There's a lot of unknowns here, so I'll let someone else run these calculations.
The next highest source is from the tax break from being able to deduct religious donations as charitable contributions. The source the Washington Post gives seems reliable that taxes were reduced $39 billion for charitable giving, and Giving USA says 32% of charitable giving is to religions, giving a $12.48 billion total.
The next highest is $6.1 billion in state taxes, but this is going to have the same problem as federal income taxes: taxes are only on profit. They had to divide and calculate by state corporate tax brackets, but if we just say that the real value is 7.5%-20%, then that gives $0.5 - $1.2 billion.
The last are much smaller, I'll only briefly mention them: $2.2 billion for faith-based initiatives, $1.2 billion for parsonage, and $41 million for investment taxes.
All I changed was income tax to be only on the profit, and that reduces it to $44 billion - $48 billion, depending on the profit margin used. Keep in mind that this is both state and federal, but does not include other subsidies they did not estimate.
Other Observations
Churches do not pay taxes because they register as a charity. The report spent a lot of time talking about how little charity (in their view) churches do. But both avoid taxes by registering as a 501(c)(3) nonprofit organization. The report did not specify how one would change that.
Speaking of which, the article addressed the criticism I'm about to give by saying churches give two kinds of charity, "the type that most people think of" and "spiritual concerns." They argue that the second doesn't count because preaching and baptizing is what they "are paid to do" and that "if the function or service the charity provides were discontinued," it would not result in "public funds to continue the function." They only recognize the first as charity, "feeding and clothing the poor, building schools, and the like."
I disagree with the "that's what they are paid to do" argument. The phlebotomist at the Red Cross is paid to take my blood. The Red Cross sells that blood to hospitals. That's what they are paid to do, so that means it's not a charity? Meanwhile, they poke at The Church of Jesus Christ of Latter-day Saints a lot, but they conveniently forgot to mention that we have an unpaid lay clergy.
While I agree that "spiritual charity" isn't something the state would care about, there are charitable actions that don't fall under "things most people think of." While you don't need religion to be a good person, there's something to be said for gathering a group of people together and encouraging them to be better people. I think this is not only something the government would want, but also something difficult for them to replicate. And while some may not believe in the spiritual benefits, you could argue that there are emotional benefits people receive at church, whether it be encouragement or from counseling, these shouldn't be ignored.
In speaking of how little churches do towards charity, they reference The Church of Jesus Christ of Latter-day Saints as only giving "about $1 billion to charitable causes between 1985 and 2008." However, this is not true-- this is the amount given to humanitarian causes. The church also gives regular "type that most people think of" charity on a local level, this is categorized as welfare. This isn't publicized, but this will be much bigger, and is the largest "traditional" charity the church does. (Edit: I was right. The Church said in early 2020 that they spend about $1 billion per year in both humanitarian aid and welfare.)
Later on, they correctly recognized that the church pays taxes on its business income, including taxes from the large Florida ranch it owns. They didn't cite their source, but they expressed confusion that it appears to be paying less taxes, at a reduced rate for the ranch. This is the only place I have seen this claim, so perhaps their sources are wrong. But it's also possible that the ranch donates to charity, and is therefore tax-deductible.
Anyway, is $50 billion a large taxpayer burden? Divided between every taxpayer, that would be $332. So maybe that's still a lot. Or at least it is for those that aren't part of those donating $127 billion to religion. But yeah, people also complain about NASA, and they do fantastic work with only a $21.5 billion budget. I suppose it all boils down to what you think is worth your money. And perhaps this is something that the religious and non-religious aren't going to agree on.
For me, even if only the first category of "thinks most people think of" should be counted as charity, I'm always skeptical whenever someone thinks, "the government could do it better."
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