Elder Dallin H. Oaks, previous Justice of the State of Utah Supreme Court, but currently in the First Presidency of the Mormon church, submitted a “testimony” to the Senate Finance Committee Hearing in 2011 regarding the debate on whether charitable deductions should be considered when calculating taxes. In other words, he’s talking about the tax-exempt status of the church.
He’s making an argument that it is imperative that the senate keeps the tax-exempt status for charitable organizations, like the church. He claims that the financial well-being of the private sector is dependent on private contributions that qualify for a charitable deduction, here he’s referring to tithing donations to the church and claims that the well-being of the whole private sector would be upset if donations to the church were no longer tax deductible.
Along with Oaks’ submitted testimony, we also see that U.S. Senator Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee, delivered the opening statement in the hearing to examine the effectiveness of tax incentives for charitable giving.
Here is the text of his submission where he claims to speak not only for churches but also for the entire private sector (but really he’s just hoping to keep his own church’s tax advantages):
I am Elder Dallin H. Oaks of the Quorum of the Twelve Apostles of The Church of Jesus Christ of Latter-day Saints.
I appear here to speak not only for churches and their charitable works, but also for the entire private sector, of which our churches and other charitable institutions are only a part.
While I appear here as a religious leader, the possible impairment of the charitable deduction in order to enhance tax revenues is not a religious issue. It is not a political issue. It is not even an economic issue. It poses a question about the nature and future of America.
The charitable deduction is vital to the private sector that is unique to America. Alexis de Tocqueville, one of the most astute observers of our nation in its infancy, wrote:
“The Americans make associations to give entertainment, to found seminaries, to build inns, to construct churches, to diffuse books, to send missionaries to the antipodes; and in this manner they found hospitals, prisons, and schools. If it is proposed to inculcate some truth or to foster some feeling by the encouragement of a great example, they form a society. Wherever at the head of some new undertaking you see the government in France, or a man of rank in England, in the United States you will be sure to find an association.”
Today millions of these private “associations”—religious and charitable—are responsible for tens of millions of jobs and innumerable services that benefit our citizens at every level. I speak of private educational institutions, hospitals, social welfare agencies, and innumerable other organizations ministering to the needs of children, youth, the aged, the poor, and citizens generally. The financial wellbeing of this private sector is dependent upon private contributions that qualify for the charitable deduction. And the impact these private institutions have on those they serve is magnified by the millions of volunteers motivated by the ideals they
pursue.For example, in the aftermath of Katrina and the other 2005 Gulf Coast hurricanes, The Church of Jesus Christ of Latter-day Saints aided the cleanup efforts with almost 3,000 tons of emergency supplies, over $13 million in cash and use of heavy equipment, and its members gave more than 42,000 man-days of service. Other non-profit organizations provided over $3.5 billion in cash and inkind donations to help with relief efforts.
Another example concerns the unique role of our nation’s churches, synagogues, and other religious organizations.
John Adams wrote: “Our constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.” This wise Founding Father explained:
“[We] have no government armed with power capable of contending with human passions unbridled by morality and religion. Avarice, ambition, revenge, or gallantry, would break the strongest cords of our Constitution as a whale goes through a net.”
Our nation is held together not just by law and its enforcement, but by voluntary obedience to the unenforceable and by widespread adherence to norms of right and wrong, such as the vital principle of honesty. For a large proportion of our citizens these essential norms are grounded in the principles of our religious beliefs, taught in our churches and synagogues.
There is no need to provide other examples. Throughout your life, each of you Senators and those you love have personally benefitted from a host of private organizations—some Church-related, but many not.
The private sector of charitable activity is almost unique and surely uniquely valued in America. And we all understand that its activities are funded by private donations produced or importantly stimulated by a charitable deduction that reduces the donor’s taxes.
Some economists and other scholars contend that this is, in effect, a tax expenditure because tax revenues are reduced by the benefit granted. In other words, because the government could have denied the charitable deduction there is a government expenditure in its granting the deduction and forgoing the revenue. By that reasoning the personal income we think is ours is really the government’s because of its choice not to take it away by taxation. That is surely an attitude not
shared by most Americans.Some also assert that reductions in the charitable deduction would not cause charitable organizations to suffer financial losses from decreased private gifts since the government would make up some of these losses by additional appropriations. Again, I submit that most Americans would not have us relinquish the freedom and diversity of our vigorous private sector of charities in exchange for the assurance that the government would select and manage their functions.
We are grateful for charitable deductions, which encourage donations to churches and other charities. The effect of this tax benefit is built into the financing of charitable enterprises that are vital to our nation, and it is a significant and wise support of the private sector. The charitable deduction should remain unimpaired, not just for religions and their unique role but for the benefit of the entire private sector of our nation.
I close with a quote from an 1830 debate in the United States Senate on a matter of great national importance. These words provide an appropriate reminder during the current discussion of the advisability of modifying the charitable deduction. We have heard arguments pro and con, with complex and competing analyses. So it was in Senator Daniel Webster’s day, when he offered this suggestion:
“When the mariner has been tossed for many days in thick weather, and on an unknown sea, he naturally avails himself of the first pause in the storm, the earliest glance of the sun, to take his latitude, and ascertain how far the elements have driven him from his true course. Let us imitate this prudence, and, before we float farther on the waves of this debate, refer to the point from which we departed, that we may at least be able to conjecture where we now are.”
“Where we now are” is midway in a discussion of whether the charitable deduction—so essential to maintaining the private sector of American life—is to be retained intact. That private, non-profit sector has always been an important counterweight to the powers and potentially repressive influence of governments. The private sector is essential to preserving pluralism and freedom in our nation. In behalf of countless churches and other charities, and in behalf of the tens of millions who are benefited by their services and by the services of the millions of volunteers who are motivated by them, I say, don’t impair the charitable deduction!
Testimony Submitted by Elder Dallin H. Oaks Senate Finance Committee Hearing October 18, 2011
https://www.finance.senate.gov/imo/media/doc/Oaks%20Testimony1.pdf
Elder Oaks references the vital principle of honesty that holds our nation together. What else was happening during 2011? We know that the church was already funneling tithing funds into massive investments with Ensign Peak, which have now been exposed and the church has settled with the SEC for five million dollars! He would likely have been aware of what was going on and would have known that keeping the church’s tax-exempt status would lead to increased gains in their investments!
Once the whistleblower exposed the massing investments of the church, we can see that the church and Ensign Peak investments were able to outperform others due to the fact that they didn’t need to pay tax!
In the document, he estimates that his former employer has evaded payments of more than $20 billion in taxes and concealed foreign accounts that should total $2 billion in penalties.
In the document, he argues that holding EPA accountable will promote better compliance by religious and other nonprofits with tax laws and will “discourage fraudulent attempts by other organizations tempted to abuse exempt status.”
His document argues that EPA’s tax avoidance gave it a “distinct competitive advantage over other investment firms.” The document alleges the firm’s cash-rich position and secretive, stable status made it a preferred investor in private equity institutions.
“EPA did not need cash from its investments to pay tax, private equity funds could rely upon EPA to leave their investments intact for the long term,” the document said.
Whistleblower Details New Allegations About $100 Billion LDS Fund
https://religionunplugged.com/news/2023/2/8/former-employee-of-ensign-peak-advisors-submits-document-to-senate-finance-committee
Perhaps it is time to request an encore appearance of Mr. Dallin Oaks before the Senate Finance Committee to explain things.
More reading:
- https://www.finance.senate.gov/hearings/tax-reform-options-incentives-for-charitable-giving
- https://www.finance.senate.gov/imo/media/doc/Oaks%20Testimony1.pdf
- LDS Church’s Misstated Filings to SEC Approved by First Presidency
- Whistleblowing On the Mormon 100 Billion “Rainy-Day Fund”
- Development of Mormon Tithing – From Meager Origins to Ensign Peak Billions
- https://www.reddit.com/r/exmormon/comments/122qakd/2011_mr_dallin_oaks_lectures_the_senate_finance/
- https://religionunplugged.com/news/2023/2/8/former-employee-of-ensign-peak-advisors-submits-document-to-senate-finance-committee