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Icelanders are rekindling an ancient religion to avoid paying taxes

AP Photo/Tania Fuentez
Icelanders are rebelling against the country’s religious tax.
  • Alexander Holt
By Alexander Holt

Policy Analyst, New America's Education Policy Program

Published This article is more than 2 years old.

Lots of people are zealous about saving money. But does the worship of tax breaks count as a religion?

Iceland residents are debating this issue thanks to the rising popularity of an ancient Sumerian religion known as Zuism. Roughly 1% of the country’s population, or 3,100 people, have registered as Zuist in just the past few weeks in order to avoid paying Iceland’s religious tax, according to a recent report by the Guardian.

Resurrecting an ancient faith might seem like an outlandish solution to a tax problem. But Iceland’s religious tax is pretty unreasonable itself.

In Iceland, citizens are required to pay a religious tax even if they’re religiously unaffiliated or belong to a faith that hasn’t registered with the state. Residents register their religion with the government and pay annual taxes (about $80 this year), which are then doled out proportionately to churches based on their total membership count. Iceland’s constitution recognizes the Evangelical Lutheran Church as the official state church.

In Iceland, citizens are required to pay a religious tax even if they’re religiously unaffiliated.

Icelanders are fed up with this system: over one-half of citizens polled in September said they want it to end. So it’s no surprise that Zuism has gained support. Its leadership has promised to directly pay fees back to members of their church, thereby negating the tax. The organization has pledged to disband once the religious tax and registration system is abolished.

This battle is hardly unprecedented. The United States actually went through a very similar debate in the first half of the 19th century, which helped to establish the country’s current treatment of churches as tax-exempt organizations.

In the early 1800s, Massachusetts and New Hampshire recognized the Congregational Church as their official state church. New Hampshire’s constitution allowed for taxation to pay for “protestant teachers” because “morality and piety, rightly grounded on evangelical principles, will give the best and greatest security to Government.”

Because the founders of these states saw religion as a necessary component of a healthy republic, they thought these churches deserved state support. In order to continue to promote religious liberty, they allowed for a proportionate amount of tax revenue to go to other incorporated churches, just as Iceland does now.

This became an issue, however, when the Federalists who controlled both New Hampshire and Massachusetts proved reluctant to incorporate certain churches, especially those of the Baptist and Unitarian denominations.

Federalists believed that incorporated churches “received local taxes in return for promoting the state’s policy objectives,”according to historian Johann Neem. He chronicles a Massachusetts Supreme Court case from 1810 determining whether a Unitarian minister of an unincorporated church was entitled to some of the state’s tax revenue. The Federalist judges argued only incorporated churches deserved tax revenue, and therefore Unitarian Minister Thomas Barnes’ church did not.

In response, Baptist and Unitarian churches increasingly sought to be incorporated to share in the tax revenue pie, which the Republicans supported. When the Republicans gained power in Massachusetts, they granted a much higher number of charters than the Federalists had.

In 1819, New Hampshire passed the Toleration Act under Republican control. The law allowed churches, incorporated or otherwise, to collect dues from members, but “did not require all citizens to support a church,” according to Neem.

Today, it has become quite easy to register as a tax-exempt church in the US.

By the 1820s, both New Hampshire and Massachusetts had stopped giving state churches privileged status. Both Federalists and Republicans believed that religion was important, but Republicans wanted churches to be formed voluntarily by citizens and to have to compete with each other rather than receive government support.

The Zuists of Iceland have taken a position similar to that of the Republicans. And it seems only a matter of time before they succeed in their quest, despite some politicians’ arguments that the Zuists are at odds with the official policies of the state.

Today, it has become quite easy to register as a tax-exempt church in the US. The Republicans insisted that the state had no right to determine which religions were and were not acceptable. Churches do not even have to register with the IRS in order to qualify as tax exempt.

This year, HBO comedian John Oliver created a church to highlight how little oversight there is. However, I would caution Oliver (or anyone else) from suggesting that it would be better to have the government determine which churches count as “real” religion. In this, I am a Zuist believer.

This piece was originally published in New America’s digital magazine, The New America Weekly. Sign up to get it delivered to your inbox each Thursday here, and follow @New America on Twitter.

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