A few days ago, a federal district court judge in Wisconsin struck down the so-called "parsonage exemption," under which practicing clergy get to exclude many of their housing expenses from taxable income. Judge Barbara Crabb held that the exemption, included in § 107 of the Internal Revenue Code, violated the Establishment Clause as, among other things, an unjustified special favor to organized religion. Now, I'm generally a "strict separationist" on Establishment Clause questions. But this decision is quite wrong. And it misunderstands an important piece of our church-state dispensation.
Some background: With various exceptions, non-cash compensation that employers give to their employees is generally taxed at its monetary value. (Otherwise, we'd all arrange to get large chunks of our salary paid in groceries, gasoline, and dishwasher detergent.) One of those exceptions is a very old principle that excludes from taxable income the value of employer-provided housing on the premises of the business in which an employee is required to live for the “convenience of the employer." (The IRS explains the rules here.) For example, lighthouse keepers who live on the premises (only one left in the United States!) don't have to declare the fair rental value of their housing as taxable income. And neither does the President of the United States.
Under this general principle, Catholic priests and other clergy who live in rectories, parsonages, and similar housing as part of their duties would not need to declare the value of that housing as income. But clergy belonging to religious traditions that don't require their leaders to live above the store, so to speak, would get no break. This would not necessarily be unfair, as such. But it does run up against an old and important sub-constitutional principle: Our legal and political culture often tries to treat religious traditions more or less equally, even in the face of theological differences among those traditions that might, strictly speaking, justify treating them differently.
The "parsonage exemption" in the tax code is just an application of this principle. Its aim is to give all working clergy the tax benefit that, strictly speaking, would be enjoyed only by clergy belong to religious traditions whose beliefs or practices require clergy to live on the premises. It does give all clergy a benefit not available to ordinary Joes, but for the sake of treating most religious traditions (the ones that have clergy) the same, regardless of their theological differences. Judge Crabb acknowledged this justification for the law, but found it wanting. She held, in effect, that this principle could not justify conferring a general statutory benefit on religion. But this simply ignores that treating religions as "equally" as possible (even in the face of actual differences among them) is at least as important a part of our long-held understanding of church-state relations as avoiding untoward special favors to religion as a whole. And Congress should have some discretion to weigh those two principles, as it did here.
As I said, I'm talking about a "sub-constitutional" principle here: Treating religions the same even in the face of actual "neutral" differences among them is rarely mandatory. But it is still legitimate and even important. My favorite example is a silly one in some sense, but it makes the point: In New York City, cars parked on the street need to be moved on certain days of the week to allow for street cleaning. Several decades ago, the city began suspending that rule on certain Jewish holidays when observant Jews are, for religious reasons, not allowed to drive. (It had already been suspended on Good Friday, when sanitation workers were off.) Over time, though, the City Council has added a whole slew of holidays of other faiths and ethnic groups -- Christian, Muslim, and more recently Hindu and East Asian -- to the list of days on "alternate side of the street" rules are suspended. Strictly speaking, this is unjustified or at least unncessary: only Jews are actually religiously prohibited from moving their cars across the street on certain holidays. But in a religiously pluralistic city, adding more holidays to the list is a token of respect and recognition, and limiting the list to Jewish holidays alone would seem odd, even if rational.
This practice of extending law or institutions beyond their paradigm cases, even when it would be rational not to do so, is not limited to religion. I discuss some of this in my forthcoming article on same-sex marriage, in which I actually use the legislative treatment of religion (as well as the law of adoption and other examples) to illustrate a more general normative move that I call the argument from "analogy of dignity."
So Judge Crabbe is wrong at two levels. First, she gives short shrift to an important, even central, impulse that plays a legitimate role in the legislative treatment of religion. Second, she succumbs to what I have (here and elsewhere) called "constitutional glare," the tendency to overlook the importance and vitality of legal principles beyond the Constitution and to ignore how constitutional law itself plays off against, and is often embedded in, sub-constitutional values and arguments.
[Also posted in slightly different form on the Center for Law and Religion Forum.]