An Economic and Constitutional Case for Repeal of the I.R.C. Section 170 Deduction for Charitable Contributions to Religious Organizations

The I.R.C. § 170 deduction for charitable contributions to religious organizations has been in existence since 1917. First amendment issues have been raised concerning the deduction, but challenges have been unsuccessful largely due to the overriding social welfare goal. Professor Lashbrooke examines the purposes and goals of the charitable deduction as a tax expenditure item, and based on economic studies, concludes that the deduction is unnecessary to accomplish the congressional social welfare goal, since contributions to religious organizations are independent of the deduction. Congress thus has an opportunity to extract itself from the constitutional issue without having to directly confront it, and at the same time, substantially increase tax receipts. Professor Lashbrooke also looks at corporate contributions to religious organizations from moral and economic points of view. The first amendment is predicated on individual choice and belief. Corporations are not natural persons and cannot have religious convictions. This conclusion is supported economically since corporate contributions are bottom line oriented. Thus, there is no justification for allowing corporations to deduct contributions to religious organizations. Professor Lashbrooke recommends repeal of the I.R.C. § 170 deduction for charitable contributions to religious organizations by individual and corporate donors