How Money Got Us Into Trouble
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How Money Got Us Into Trouble
By C. Mervyn Maxwell, PhD
Former Professor of Church History, SDA Theological Seminary
Author, God Cares

As you read this story, do remember that administrators are human, like the rest of us, and need our prayers. Remember too that the money they attempted to save at a crucial point in this story was God's tithe; it was not their own money.

It is a story that shows how the NAD [North American Division] leadership came to the position that (a) ordination is merely a matter of church policy, not of sacred obligation, and (b) commissioning is equivalent to ordination.

In order to move meaningfully into the story, it is needful for us, for a few moments, to flash back a couple of hundred years.

Development of the Parsonage Allowance

When America was young, many churches provided rent-free residences for their pastors. These residences were known as parsonages (or as manses, vicarages, and so on). Because they belonged to their respective churches, the law stipulated that these parsonages (or whatever they were called) were tax-free. Thus the custom arose under which ministers lived in houses that were both rent-free and tax-free. As times changed, more and more churches began paying their pastors a parsonage allowance, allowing the men to find their own housing at church expense. Because this new custom was a modification of the older custom, the churches persuaded the government to treat the parsonage allowance as tax-free.

Not being required to pay income tax on income used for rent, mortgage, and utilities is obviously a plus for pastors, but because most pastors have been underpaid, few people have seemed to be jealous. Indeed, the advantage has been considerably undercut with the growth of Social Security since 1950. The American government requires employers to pay one half of the Social Security (pension) tax on their regular employees, leaving employees with the burden of paying only the other half. Ministers, however, by some quirk of the law, are considered “self-employed and are thus required to meet the entire Social Security obligation. Even so, most ministers in America pay somewhat lower taxes than other people do who have similar incomes.
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