May 13

The Kingdom

“And Jesus said to them, ‘Petition Caesar to redistribute wealth, institute health insurance and welfare programs, and abolish swords, for it is through the government that one loves one’s neighbor.'”

Oh, wait, no he didn’t. He fed the poor, healed the sick, comforted the brokenhearted, and taught us to do likewise– and the government killed him for it.

 

April 30

Why Should I Vote Democrat?

The email from the DNC says, “Say You’re Ready to Elect Democrats.” I don’t know how they got my email address. I’ve never registered as a Democrat in my life. For the record, I’ve never registered as a Republican, either.

My real problem with the email is not that it’s spam. I get tons of that every day, and at least they’re not questioning my manhood.

My problem is this: Why should I commit to electing a Democrat before I see the candidate?

Maybe you’re thinking, “But we need a Democrat!”

This is where I alienate both parties. Democrats hated George W. Bush because he fought wars in two countries, wiretapped phones without warrants, doubled the national debt, rolled back civil liberties, and failed to give us a national health care system. Democrats like to ignore that Obama did all of those same things. And he lifted the ban on offshore oil drilling and suspended habeus corpus for American citizens. But because he was a Democrat, the left was silent. And because he was a Democrat, the right roasted him for doing the same things as Bush.

And Hillary the Hawk? Not the best choice, especially in the face of a possible Trump presidency. It makes me wonder what a Democrat is anymore. Does the DNC actually stand for something besides “I wanna get elected”?

I’ll root for the Red Sox no matter how bad a team they field. But contrary to what some might believe in Boston, the Red Sox don’t determine the fate of the world.

Democrats, if you want me to vote for your candidate, you’ve got to do better than, “She’s not a Republican.” Heck, Trump wasn’t a Republican… until he suddenly was. And there are Republicans I might vote for. Olympia Snowe, John Huntsman, and Susan Collins spring to mind– all moderates with decades of experience, any of whom are less likely to get us into a war than the two choices we faced in 2016.

You want me to vote for your candidate? Show me the platform. And show me a history of support for that platform. Seriously, when Bernie got traction on one of his long-time goals, and two weeks later Hillary said, “Me, too,” that’s not very convincing. Come on, you’re Democrats. There’s got to be someone of principle in your party that you’re willing to put on the ticket.

I met a Democrat of principle recently. He was running for state representative. And he actually had a platform. It included such bizarre things as national health care, stopping our aggressive foreign policy so we stop making enemies, and reducing fossil fuel use. (Remember that one? Obama made promises about it, then said nothing as Bush’s solar tax credits got repealed. Hillary barely mentioned it.) Those are the things a Democrat used to stand for. This particular candidate didn’t win, but he sure got my vote.

Call me old-fashioned, but before you ask me to support your candidate, would you please tell me who that candidate is and what she (or he) stands for. This isn’t a sports team we’re talking about. It’s the future of our nation– and the world.

December 7

Minister’s Housing Allowance Under Fire

Pastor Matthew Bucher stands outside Immanuel Mennonite Church in Harrisonburg, VA. This small, socially conscious church is one of thousands that faces hardships if the housing allowance for ministers is eliminated. (News Leader photo.)

It’s not often that my past career as a tax accountant intersects with my future career as a minister, but the recent 7th Circuit Court decision does exactly that. An anti-religious group challenged the minister’s housing allowance, and won. That won’t be the end of the story. The decision will be appealed, perhaps all the way to the Supreme Court. In the mean time, while ministers will suffer in the 7th Circuit, which covers IL, IN and WI, it’s unlikely the IRS will change the rules for the rest of the country until the matter is resolved by the courts.

The problem is, there’s a world of misunderstanding behind the suit and the decision. As one opponent of the decision said,

“This tax provision ensures that faith leaders like South Side, Chicago-based pastor Chris Butler receive the same tax treatment as other employees who must live in the communities they serve-like military service members, teachers, and overseas workers.”

And there’s the rub: secular employees who are required to be on-call, on-site are entitled to tax-free housing allowances. This includes not only teachers and emergency workers, but dairy farmers, factory specialists, and others. The key is the requirement is that they are on-call on-site, 24 hours a day.

The clergy housing allowance actually applies not only to “ministers of the Gospel,” as indicated in the original law, but to clergy of any religion. Why do they require a special law? Because their’s is a special case. Unlike most employees, IRS regulations specify that most ministers are to be paid as self-employed workers–sort of. They receive a W-2 from their church (not a 1099), but the church does not withhold taxes (including social security) from the minister’s check. The minister pays these taxes on Schedule C, just like a self-employed person. Presumably this is because IRS knows the part-time, probably volunteer church treasurer has no idea how to figure payroll taxes, and hiring a professional can be burdensome.

Like a self-employed person, a minister gets to deduct his or her business expenses. Oddly, though, if a minister makes extra money from performing weddings and funerals, for example, these must be reported on a separate Schedule C, along with their related expenses. Yet this extra income and expense is combined with their primary Schedule C to calculate the tax.

Unlike most self-employed people, but like an employee, a minister is allowed a housing allowance that is exempt from income tax (but not FICA taxes) if they are on-site on-call. And on their Schedule C, they are required to reduce their business expenses by the proportion of their income that comes from the housing allowance (so long as that housing allowance was actually used for housing)– but only for income tax purposes, since the housing allowance is taxed for social security.

For example, let’s say a minister earns $10,000 in a year, and she gets an additional $5,000 for housing. She has $750 of expenses. For self-employment (FICA) tax purposes, she earned $15,000 and gets to deduct $750. Her taxable income is $14,250. But for income tax purposes, 33.3% of her income came from housing allowance which is exempt from income tax, so she has to reduce her expenses by 33% and can only deduct $500 in expenses. Her taxable income is $9,500.

If this sounds complicated, it is. This is one of the most difficult calculations I’ve encountered in the arena of individual and small business taxes. And it gets worse once the minister is semi-retired and has pensions and other sources of income.

Moreover, it’s up to the church (or other employer) to determine whether the minister will even get a housing allowance. This differs from an employee, in which circumstances (i.e. on-call on-site) dictate whether a housing allowance is involved.

So, are ministers getting a benefit denied to secular employees–or are they burdened in a way secular employees aren’t for the same benefit? It’s hard to tell. There are some benefits to clergy, such as deducting their business expenses without having them subject to the 2% haircut on Schedule A. On the other hand, they pay both parts of their FICA (social security) taxes, twice as much as an employee. And they’re going to pay as much as 3 times more to have their tax return prepared!

The judge in this case recommended simplifying the law so that employees of any 501(c) organization are subject to the same laws. I concur. They will still have to address the status of ministers as statutory employees taxed as self-employed persons. But at least the system would be consistent.

Back to the original argument: The issue here is not that secular employees are denied this benefit–it’s that ministers by their nature are a special case.

 

Further reading: “5 Takeaways from the Clergy Housing Allowance Ruling

September 28

Just Sayin’

Note to Sen. Tim Kaine (D-VA):

Hillary Clinton’s support is not something you should advertise. I received her email from your server. I have unsubscribed from your emails. So long as you represent the business-as-usual Democratic Party, I won’t vote for you. “We’re not Trump” is not a valid platform. Please take a lesson from the campaign of would-be state delegate Brent Finnegan and offer something more than what gave us Trump in the first place.

September 26

ACA – When Politics Kills

For eight years I’ve heard ACA– Obamacare– trumpeted as the Democrats’ crowning achievement in healthcare. In my former rural community peopled with farmers and self-employed people, it wasn’t very popular because it screwed people. But it seemed to be working in urban areas.

Now I live in a small urban area, and it doesn’t seem to be working any better.

Here’s a case in point.

My friend Sue is married and has three children. Her husband was fired for allegedly speaking disrespectfully to a supervisor subcontracted in from a job service. He’s fighting his termination, but since his employment was at-will, I don;t see that he has much chance of winning. After all, they don’t need a reason t terminate someone. In any case, his health insurance plan was terminated as of the date he was fired.

ACA guarantees COBRA to employees who have lost their jobs. They get the same health plan they had before, if they pay 102% of the cost out of pocket. So Sue’s family, whose major breadwinner isn’t earning right now, has to come up with almost $1,800 for the first two months of coverage. They have 45 days to do so.

They don’t tell you that COBRA won’t actually pay for anything until they’ve paid the premium. That’s fine for doctors, who can bill retroactively. But it’s not so good for pharmacies and medical suppliers who demand payment when goods are provided.

Sue has Type 1 diabetes. Like 3 million other Americans, she has to monitor her glucose levels closely. Her levels fluctuate wildly, so she uses a constant glucose monitor to keep her from going into a coma and dying. That’s not an exaggeration.

Sue is now out of supplies. Her glucose monitor is out of service. She doesn’t even have test strips to test the old fashioned way. She spent four hours on the phone yesterday and was able to find a way for the supplies to be shipped–in a week or two.

So let’s recap: We live in a country in which a person who just lost their job has to spend a month’s pay for health insurance coverage. And where until that money is paid, a diabetic can’t check her glucose levels.

I’m afraid for Sue. She may die this week. And the only reason is that our politicians can’t get their act together on health care.

In the industrialized world, that makes us the dysfunctional family member. Every other industrialized nation has universal healthcare. Even some poor nations like Sri Lanka have universal healthcare! And yes, they all complain about it. But have you noticed that when Brits or Canadians need major medical attention, they get on a plane home?

But not us. We still think keeping people alive should be a profit-making enterprise. And it’s killing people.