Should Churches Be Taxed?

While looking into this issue a bit I can across an interesting idea at Blogcritics Magazine on the subject from back in 2004:

Excerpt:

I believe that the tax-exempt status of a religious institution should be proportional to its nondenominational charitable activities.

For example, a church that spends money on fancy cars for its preacher should be taxed on those expenses. A church that runs a soup kitchen but requires its beneficiaries to pray for their supper should have to pay tax on the portion of its income used to run that soup kitchen. A church that owns its building and uses the facility for both worship services and charitable deeds should be taxed according to a formula, the same way a person can deduct home office expenses from his income taxes. Better financial minds than mine could come up with the formula.

I like this idea as it does not punish purely non-profit activities, but requires that the profitable ones take up their fair share of the tax burden that the rest of us share. Like the writer I don't profess to be a great financial mind, but I don't think I'd be taxing any soup kitichens just because they charged money. After all they could charge money in these cases and still not be making any profits, and in many cases actually losing money. I would have no problem, however, in taxing them on profits made on such activities after a certain profit margin was reached.