Buffalo diocese sues to get 1.7 million dollar SBA loan through COVID-19 relief program

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This is very straightforward, at least to me. There are requirements for the program. If they meet the requirements they should get the loan. If they do not, they should not.
 
Is the church in the U.S. of A. an employer as any other employing entity, while at the same time not having to pay the same taxes as other employing entities?
 
It’s an employer for purposes of this loan program. The article notes that several other dioceses have already received the loans, which are meant to keep employees on the payroll during the pandemic. Rochester and Buffalo weren’t allowed to apply because they had declared bankruptcy. They’re arguing that there is no condition regarding bankruptcy in the law as enacted. It was added by the SBA later on. Looks like an interesting administrative law issue.

Of course, all the anti-Catholics out there will use these lawsuits as another opportunity to make a fuss about the mean, bad ol’ Church.
 
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Michaelangelo said:
Is the church in the U.S. of A. an employer as any other employing entity, while at the same time not having to pay the same taxes as other employing entities?
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Depends on what you mean by this. Churches are tax exempt entities. They generally pay payroll taxes, use taxes, sales taxes, etc, but they do not pay income taxes. Tax exempt entities can be treated as small businesses for many (most?) purposes. BUT, religious entities do not generally qualify for small business loans, because those loans are meant to encourage and grow businesses (and Churches are not “businesses”). Churches were allowed to apply for the PPP loans because those loans were meant to just keep payroll going (and Churches have payrolls).

All that said, there are rules to follow to get the loans. If these Catholic dioceses meet the rules, they should be included. If they do not meet those rules (for example, because they are bankrupt), then they should not get the money. I don’t see why they would be treated differently than any other entity.
 
Tis_Bearself said:
They’re arguing that there is no condition regarding bankruptcy in the law as enacted. It was added by the SBA later on. Looks like an interesting administrative law issue.
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Most of the rules surrounding PPP were added by the SBA later. There will be a number of fights over that. In addition to bankrupt entities, the SBA is now claiming that some entities should have sought funds elsewhere (e.g. publicly traded companies could have sold stock), even though the statute says nothing about that, either.
 
They’re not asking for different treatment, they’re saying the SBA added an additional condition to the rules for the loan that wasn’t in the original law as passed. Admin agencies have a certain amount of leeway to put laws into practice, so I presume the argument here will be that the agency overstepped its authority. I would presume the rule regarding bankruptcy would affect any other business that had filed for Chapter 11 before the pandemic hit and now wants to apply for a loan. Whether there are any other bankrupt businesses who’d have their act together to bring such a suit, I don’t know.
 
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Tis_Bearself said:
They’re not asking for different treatment, they’re saying the SBA added an additional condition to the rules for the loan that wasn’t in the original law as passed. Admin agencies have a certain amount of leeway to put laws into practice, so I presume the argument here will be that the agency overstepped its authority. I would presume the rule regarding bankruptcy would affect any other business that had filed for Chapter 11 before the pandemic hit and now wants to apply for a loan. Whether there are any other bankrupt businesses who’d have their act together to bring such a suit, I don’t know.
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I get that. All I am saying is that if the no bankruptcy rule is the proper rule for everyone else, there is no reason to treat Churches differently. Whether it is the right rule (in terms of good policy) is a different question from whether it is within the SBA’s authority, of course. Whether it is withing the SBA’s authority is a complicated question, and I have not read the statute, so I am not opining on that.

I am guessing that very few bankrupt entities have the resources for such a suit, so these dioceses might be among the very few.
 
TMC said:
All that said, there are rules to follow to get the loans. If these Catholic dioceses meet the rules, they should be included. If they do not meet those rules (for example, because they are bankrupt), then they should not get the money. I don’t see why they would be treated differently than any other entity.
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To me as an outsider, this system where an entity not paying certain taxes still can apply for funds from the same collective tax pile as the enteties who are forced to pay the same taxes, does not really make sense. 🤔
But hey. I’m just an observer.
 
Michaelangelo said:
To me as an outsider, this system where an entity not paying certain taxes still can apply for funds from the same collective tax pile as the enteties who are forced to pay the same taxes, does not really make sense. 🤔
But hey. I’m just an observer.
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Well, as I said, they do pay certain types of taxes, and their employees generally pay taxes. Recall that the money they get has to be used (mostly) to pay employees, so those taxpaying employees are the ones benefiting. Personally, I am not a big fan of the way the tax exempt laws work, but given that tax exempt entities exist, I have no problem with them participating in this kind of program.
 
Michaelangelo said:
To me as an outsider, this system where an entity not paying certain taxes still can apply for funds from the same collective tax pile as the enteties who are forced to pay the same taxes, does not really make sense. 🤔
But hey. I’m just an observer.
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This has NOTHING to do with taxes. The “loan” is meant to keep people employed during the pandemic and thus keep the economy afloat.

I don’t think the church staff all deserves to be out of a job and on the street just because you have some odd hangup over taxes. No doubt there are other nonprofits that are not churches, that also get tax exemptions and yet will get a loan to keep their people in a job.

You seem to be saying if an entity doesn’t pay income tax then all its employees deserve to be fired and not get help. Never mind that the individuals all pay their own taxes; they do not get to skip filing a return because they work for the church. Your viewpoint makes no sense to me and seeme uncharitable to the employees who need a paycheck to pay their rent and bills.
 
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Tis_Bearself said:
This has NOTHING to do with taxes. The “loan” is meant to keep people employed during the pandemic and thus keep the economy afloat.
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If the loan comes from the pile of paid taxes I can’t see the separation between paying taxes and getting access to paid taxes.
I don’t think the church staff all deserves to be out of a job and on the street just because you have some odd hangup over taxes.
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And when did I say anything remotely resembling that the employees of the church are deserving of that? The employees are not the same as the legal entity of the employer.
No doubt there are other nonprofits that are not churches, that also get tax exemptions and yet will get a loan to keep their people in a job.
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Possibly. I have no idea how your system works, as I thought I made clear from start. But I guess “To me as an outsider” and “But hey I’m just an observer” was to vague… 😄
 
Too bad the focus is on money at this time.
It is still Easter season and time to get Holy Communion to the Faithful.
 
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The reason why churches don’t pay taxes in USA is the same reason as why nonprofits don’t pay taxes. These entities do not go out and engage in work for profit. They aren’t “growing the pie” profit-wise to make an extra layer of fiscal growth for the US to grab another cut from. They rely on donations. The people who donate have already been taxed on their income (unless they’re somehow tax-exempt which usually means they’re so poor they wouldnt be making much donation). Making the church pay taxes on donations is basically taxing the same money twice.

Again, the point of this loan is to keep the people who are employed in a job. The people who are employed are paying taxes on the money they earn. They now stand to lose their jobs unless their employer pays them. Their employers have been affected by the COVID shutdown and cannot pay them. Either the US pays these people something now so they can continue to be employed, or they all get put out of a job and the US supports them through some kind of social safety net benefit. Either way, taxpayers are going to be paying to help these people. Best to help them stay in their jobs as that will do the least damage to the economy. This is just common sense if you read the article and see what the “loan” is for - it’s not really a “loan” as it’s forgiven if the employer uses it to pay his employees.
 
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Tis_Bearself said:
The reason why churches don’t pay taxes in USA is the same reason as why nonprofits don’t pay taxes. These entities do not go out and engage in work for profit. They aren’t “growing the pie” profit-wise to make an extra layer of fiscal growth for the US to grab another cut from. They rely on donations. The people who donate have already been taxed on their income (unless they’re somehow tax-exempt which usually means they’re so poor they wouldnt be making much donation). Making the church pay taxes on donations is basically taxing the same money twice.
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I would argue that the donated pile of money the dioceses have been forced to pay, for various reasons, haven’t been resting in some mattress. Instead it has been invested in various ways to make more money. Such increase is profit in my book. But I have no idea if taxes are paid on such profit. It may very well be so.
Again, the point of this loan is to keep the people who are employed in a job. The people who are employed are paying taxes on the money they earn. They now stand to lose their jobs unless their employer pays them. Their employers have been affected by the COVID shutdown and cannot pay them. Either the US pays these people something now so they can continue to be employed, or they all get put out of a job and the US supports them through some kind of social safety net benefit. Either way, taxpayers are going to be paying to help these people. Best to help them stay in their jobs as that will do the least damage to the economy. This is just common sense if you read the article and see what the “loan” is for - it’s not really a “loan” as it’s forgiven if the employer uses it to pay his employees.
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It just would make more sense if it was the actual taxpayer who asked to get this loan. Not the entity not paying the tax in the first place.

Aaanyway! Not being a member of the church or a citizen of your country. It is not my business. So I make it to the exit.
 
Those people furloughed from their diocese can collect unemployment like everyone else. You might not like to hear this but there are people who are willing to volunteer to get things done within the church. I have been asking to bring back volunteers for years now. I take that back. I’ve been praying to God that we have volunteers come back …the unpaid worker.
 
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Most unpaid volunteers have income coming from somewhere - a job, pension, or retirement funds. Take those away due to a pandemic and suddenly they aren’t spending their free time volunteering, because they need income.
 
Beyond that, dioceses have jobs that cannot be adequately done by volunteers. For example, the bishop needs to administer a diocese; he needs administrative staff to assist him with that, and they can’t all be clergy, because every priest he assigns to work in his office is taken away from serving the needs of a parish somewhere else, and we have a priest shortage. Volunteers aren’t going to cut it for some of these positions.

Also, in my experience the Catholic Church (and probably other churches) use some of their paid position to assist people who need a job and for some reason have limited job opportunities or difficulty getting other jobs, due to family situations or disabilities or whatever. If those people are put out of work they might not be able to find any other work.

I can’t speak to the Buffalo and Rochester cases because that’s a matter for the admin lawyers and bankruptcy lawyers to handle, but I see nothing wrong with the other dioceses not in bankrupcy who’ve already applied for and received this money to keep people working, and I’m happy that the Church and its employees are generally not excluded from this benefit. My taxes go to a lot of things I don’t support but I certainly do support the Church and I don’t mind having my taxes go to keep their employees in a job.
 
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