Bob Jones University was a racist institution. Until 1971, the school did not accept black students at all, and for much of the 1970s, the school only permitted African Americans who were married to another African American to attend. After a court decision required many Southern schools to integrate, Bob Jones changed its policy again to allow unmarried black students, while also imposing strict restrictions on interracial romance. “Students who date outside of their own race will be expelled,” read one of Bob Jones’s rules. Another provided that “Students who are members of or affiliated with any group or organization which holds as one of its goals or advocates interracial marriage will be expelled.”
At the beginning of the 1970s, a panel of federal judges and, ultimately, the Internal Revenue Service (IRS) concluded that the federal government could “no longer legally justify allowing tax-exempt status to private schools which practice racial discrimination.” What followed was a foundational conflict that helped build the modern day Christian right. According to a top aide to Moral Majority founder Jerry Falwell, “government interference in Christian schools” quickly became one of religious conservatives’ core causes. Though not all of the culture warriors who signed up in defense of religious education were racist — many were motivated by opposition to evolution, sex education or “hedonistic youth culture” — the bigoted Bob Jones University soon became the battleground where the Christian Right made its stand.
They lost. As the Supreme Court explained in its 1983 decision in Bob Jones University v. United States, “the Government has a fundamental, overriding interest in eradicating racial discrimination in education,” and this interest overcame Bob Jones’s asserted religious interest in being racist. Eight members of the Court joined this decision, only Justice William Rehnquist, then the Court’s most conservative member, dissented.
Flash forward more than three decades, and the Christian right is gearing up to fight this battle all over again, albeit on a slightly different battlefield. This time, the forces of religious discontent are not mustering in support of racism, they’re mustering in favor of anti-gay discrimination.
“The Next Step in Progressive Totalitarianism”
Justice Samuel Alito is the most reliable barometer of Republican Party sentiment on the Supreme Court. He is staunchly conservative, unapologetically partisan, and the best questioner in the Court’s conservative bloc. In politically charged cases, he hunts for flaws in liberal legal arguments at the molecular level, and then spends oral arguments pounding these flaws until they yield holes big enough to drive a knife through. When Citizens United was before the Court, Alito single-handedly transformed the oral argument into what Jeffrey Toobin described as an “epic disaster” for the Justice Department. More recently, when a case seeking to strip health insurance from millions of Americans was before the Court, Alito proved a better advocate for the plaintiffs’ case than the lawyer arguing the case on their behalf.
Last month, when marriage equality was before the Court, Alito similarly became the Court’s chief advocate for discrimination. Reviving an issue that’s largely remained dormant since the Bob Jones decision, Alito warned that a decision favoring marriage equality could lead to a future when anti-gay schools would no longer receive tax subsidies. “Well, in the Bob Jones case,” Alito asked Solicitor General Donald Verrilli, “the Court held that a college was not entitled to tax-exempt status if it opposed interracial marriage or interracial dating. So would the same apply to a university or a college if it opposed same-sex marriage?”
This question was largely unnoticed by mainline Court reporters, but it set off an earthquake in the conservative press. The Weekly Standard’s Terry Eastland labeled this exchange between Alito and Verrilli as “[t]he most notable exchange during the argument last month in the same-sex marriage case before the Supreme Court.” Though Verrilli’s answer to Alito’s question was non-committal — Verrilli told the justice that he can’t “answer that question without knowing more specifics” while acknowledging that the question of anti-gay schools’ non-profit status is “certainly going to be an issue” — the National Review’s Ed Whelan wrote that the possibility that government may no longer provide tax-preferred status to colleges that discriminate may be “the next step in progressive totalitarianism.” Michael Farris, the chairman of the Home School Legal Defense Association claimed in a USA Today op-ed that “Colleges and universities that receive federal funding will be coerced into immediate compliance,” while “[a]ccreditation agencies will ratchet up their bullying of Christian institutions.”
Then on Tuesday, Louisiana Gov. Bobby Jindal (R) issued an executive order forbidding state agencies from denying or revoking a group’s tax-exempt status because the group “is acting in accordance with [its] religious belief.” In case there was any doubt what Jindal sought to accomplish with this order, which largely maps legislation that failed in the state legislature, the executive order specifically names persons who act “in accordance with his religious belief that marriage is or should be recognized as the union of one man and one woman” as entitled to special rights.
The Weakest Link
Alito’s question to Verrilli is misleading in two ways. The Bob Jones case was not, as Alito says, merely about a college that “opposed interracial marriage or interracial dating,” it was about a college that actively engaged in race discrimination — first by excluding black students altogether and then by placing racist limits on dating and marriage. So the anti-gay analogy to Bob Jones isn’t a college that simply opposes same-sex marriage. It is a school that actively engages in discrimination.
Similarly, to the extent that Alito was implying that a decision supporting marriage equality would necessarily lead to anti-gay schools losing their special tax status, this is also inaccurate. Racist schools are denied tax-exempt status because the tax code only permits tax deductions for certain “charitable contributions.” Thus, as the Court explained in Bob Jones, “entitlement to tax exemption depends on meeting certain common-law standards of charity — namely, that an institution seeking tax-exempt status must serve a public purpose and not be contrary to established public policy.” A school that engages in race discrimination, the Court continued, violates a public policy against race discrimination that can be found within the web of Supreme Court decisions, federal laws and executive actions targeting such discrimination.
The web protecting LGBT Americans, by contrast, is riddled with incomplete segments and torn threads. Though the Court is likely to end anti-gay marriage discrimination next month, there is no guarantee that the decision will provide explicit protections against other forms of sexual orientation-based discrimination. Similarly, as Verrilli explained to Chief Justice John Roberts shortly before his exchange with Alito, “there is no Federal law now generally banning discrimination based on sexual orientation.” So, while the word “charitable” is probably ambiguous enough, especially when read in light of Bob Jones, to allow the IRS to require tax-exempt charities to refrain from anti-gay discrimination, the legal argument that IRS would be required to do so immediately after a marriage equality decision is much weaker.
It’s possible that the IRS could conclude that certain anti-gay schools contribute enough to society that these contributions justify giving them tax breaks regardless of whether they engage in discrimination. Nevertheless, as Jindal’s executive order indicates, anti-gay advocates aren’t exactly sitting on their hands waiting to see whether the IRS and the courts will continue to allow special tax status for colleges that discriminate. Jindal’s order, it should also be noted, sweeps much wider than simply protecting anti-gay non-profits’ preferred tax status. Among other things, it also forbids the state government from denying state grants and loans because the recipient of the grant or loan acts according to their religious objections to marriage equality. This broad protection for anti-gay groups is instructive, as it highlights why the legal case for these protections are especially weak at the federal level.
Government grants and loans are, quite obviously, two ways that the government can subsidize activities that it wishes to encourage. Another method the government can use to provide a subsidy is a tax expenditure. Imagine, for example, that the government wants to encourage people to buy electric cars. One way the government could do this is by taxing everyone normally and then writing a $1,000 check to everyone who buys an electric car. Another way the government could accomplish the same goal is by taxing most people normally while giving a $1,000 tax break to everyone who buys an electric car. In either circumstance, the result is identical — the government is $1,000 poorer every time someone buys an electric car, and the person who buys the car is $1,000 richer.
Tax-exempt status for charities functions similarly. Rather than tax charities normally and then pay them direct subsidies, the government exempts them from taxation. Similarly, rather than pay off people who donate to charity, the government gives a tax deduction to people who make such donations. In either event, however, the result is the same. The government has made a decision that charitable activity and charitable donations should both be given a financial incentive, so it subsidizes them through the tax code.
So when anti-gay groups argue that they have a right to preferential tax treatment, even if they engage in discrimination, they are doing more than simply claiming that the government should not sanction they for their anti-gay beliefs, they are claiming that they have an affirmative right to have the government subsidize their activities despite the fact that they engage in discrimination. Alito’s question, moreover, arose in a constitutional case about the scope of same-sex couples’ rights under our founding document. For the question of anti-gay groups’ tax-exempt status to even be relevant to such a case, Alito would have to believe that denying a government subsidy to anti-gay groups could violate the Constitution, as a mere belief that doing so would make for bad statutory or regulatory law is not relevant to constitutional analysis.
This is not the first time this question has arisen, nor is it the first time Alito has revealed his belief that anti-gay groups have a right to government subsidies. In Christian Legal Society v. Martinez, the Court considered whether a student group that banned anyone engaged in “unrepentant homosexual conduct” from being members was entitled to valuable benefits from a public law school, despite the school’s anti-discrimination policy. Writing for a majority of the Court, Justice Ruth Bader Ginsburg explained that “our decisions have distinguished between policies that require action and those that withhold benefits,” and thus the facts of this case did not permit the student group to demand a government subsidy.
Alito, however, wrote an angry dissent where he accused the majority of cutting off free speech “that offends prevailing standards of political correctness in our country’s institutions of higher learning.”
Christian Legal Society and an LGBT version of Bob Jones are not identical cases. The first, for starters, asserted a free speech claim while the latter involved a religious liberty claim. Nevertheless, they are two shades of the same culture war, and they point to the same desire on the part of the Christian right — the desire to engage in religiously motivated discrimination at taxpayers’ expense.
Moreover, if Christian Legal Society is any indicator, the question whether the Court will give the Christian right what it desires rests on a knife’s edge. That case was a 5–4 decision.