allege no injury distinct from that of the Church which, as a corporate body, can sue in its own name.
C. Bethel's Failure to Elect Out of the Social Security System Does Not Bar This Suit.
Defendant claims that Bethel could have avoided the adverse consequences of contributing to the social security system by simply electing under 26 U.S.C. § 3121(w) not to join. Having failed to make the election, Bethel cannot seek redress in this action. Defendant cites numerous cases in which the courts have refused to relieve a taxpayer from the adverse consequences of an election made under a taxing statute. Moreover, defendant points out that courts have avoided constitutional questions whenever a case can be disposed of on other grounds. Accordingly, we should rely upon Bethel's conduct here to dismiss this suit without reaching the constitutionality of the social security amendments. Plaintiffs, citing Sherbert v. Verner, 374 U.S. 398, 83 S. Ct. 1790, 10 L. Ed. 2d 965 (1963), contend that no real choice was offered by the amendments. Plaintiffs' first amendment rights would have been infringed regardless of what choice Bethel made under the amendments. We agree with plaintiffs.
Defendant's cases dealing with elections under the taxing statutes are inapposite here. None of these cases dealt with the constitutionality of the taxing statute at issue in them; only with the taxpayer's attempt to avoid the adverse tax consequences of what was later perceived as an unwise election. See, e.g. J. E. Riley Investment Co. v. Commissioner, 311 U.S. 55, 61 S. Ct. 95, 85 L. Ed. 36 (1940).
The situation here is entirely different. The choice offered to Bethel by the amendments implicated religious beliefs regardless of the alternative taken by the Church. If it elected out of the system, the Church would have avoided secular interference with its beliefs on Christian self-support but its employees would have paid social security taxes at the self-employment rate. The Church would then have been required to raise its workers' salaries out of justice to them and less funds would have been available for Church ministries.
Of course, the Church decided to contribute and its belief concerning Christian self-support has been directly implicated. Additionally, because the Church increased its workers' salaries to cover the money lost to the tax, the second harm previously mentioned has also resulted -- a decrease of resources the church can allocate to its ministries.
In any event, defendant's argument does not address the employees' concerns at all. They are subject to the social security tax regardless of any decision made by the Church. Their religious beliefs on self-support are allegedly infringed and the harm could not have been avoided by Bethel's election. We reject defendant's election argument and proceed to the merits of the complaint.
D. The Legislation Does Not Violate the Free Exercise Clause.
As noted previously, the Church and its members believe that Christians must provide for their own financial security but if they cannot do so, the Church must provide for them by means chosen by the Church. Additionally, its employees are exercising a religious vocation by working for the Church. The Church and its members allege that the 1983 and 1984 social security amendments prevent them from exercising religious autonomy in these areas. A system of retirement benefits has now been imposed upon them. Employees are pressured into leaving their vocations and pursuing occupations in secular society to make up for income lost to the tax. An increase in salaries would not solve the problem. It would only divert funds from other areas. In that regard, the tax will diminish the Church's ability to operate its ministries. Payments into the system have already forced the Church to raise tuition for its school and to borrow money at commercial rates. Plaintiffs assert other adverse consequences of the legislation which we need not detail for the purposes of defendant's motion.
In Bob Jones University v. United States, 461 U.S. 574, 103 S. Ct. 2017, 76 L. Ed. 2d 157 (1983), the United States Supreme Court summarized the standard to be applied to free exercise claims as follows:
This Court has long held the Free Exercise Clause of the First Amendment to be an absolute prohibition against governmental regulation of religious beliefs, Wisconsin v. Yoder, 406 U.S. 205, 219 [32 L. Ed. 2d 15, 92 S. Ct. 1526] (1972); Sherbert v. Verner, 374 U.S. 398, 402 [10 L. Ed. 2d 965, 83 S. Ct. 1790] (1963); Cantwell v. Connecticut, 310 U.S. 296, 303 [84 L. Ed. 1213, 60 S. Ct. 900] (1940). As interpreted by this Court, moreover, the Free Exercise Clause provides substantial protection for lawful conduct grounded in religious belief, see Wisconsin v. Yoder, supra at 220; Thomas v. Review Board of Indiana Employment Security Div., 450 U.S. 707 [67 L. Ed. 2d 624, 101 S. Ct. 1425] (1981); Sherbert v. Verner, supra at 402-403. However, "not all burdens on religion are unconstitutional. . . . The state may justify a limitation on religious liberty by showing that it is essential to accomplish an overriding governmental interest." United States v. Lee, 455 U.S. 252, 257-58 [71 L. Ed. 2d 127, 102 S. Ct. 1051] (1982). See, e.g., McDaniel v. Paty, 435 U.S. 618, 628, and n.8 [55 L. Ed. 2d 593, 98 S. Ct. 1322] (1978); Wisconsin v. Yoder, supra at 215; Gillette v. United States, 401 U.S. 437 [28 L. Ed. 2d 168, 91 S. Ct. 828] (1971).
Id. at 603, 103 S. Ct. at 2034-35, 76 L. Ed. 2d at 180-81.
The limitation upon religious liberty may be justified only when there is no less restrictive means to accomplish the governmental interest. Id., (citing Thomas v. Review Board of the Indiana Employment Security Division, 450 U.S. 707, 101 S Ct. 1425, 67 L. Ed. 2d 624 (1981)).
Plaintiffs' free exercise claim is two pronged. One prong, based solely upon religious belief and independent of any claimed financial hardship which would impede the Church's ministries, is based upon the religious obligation of Bethel and its members to care for their own when they cannot do so themselves and not to participate in, or accept benefits from, a secular system with similar goals. The second prong is based upon diversion of funds from protected religious activity.
Defendant relies solely upon United States v. Lee, 455 U.S. 252, 102 S. Ct. 1051, 71 L. Ed. 2d 127 (1982) to defeat plaintiffs' entire free exercise claim. Indeed, defendant contends that Lee is indistinguishable from the instant case, controls the outcome here, and requires us to find against plaintiffs.
In Lee, the Supreme Court held that the free exercise clause was not violated by requiring an Amishman, an employer of other Amish on his farm and in his carpentry shop, to contribute to the social security system. The Amish believe that they are religiously obligated to care for their own elderly and needy and can not pay into the social security system or accept benefits from it. Accepting the sincerity of these beliefs, the Supreme Court noted that the government's interest in mandatory and continuous participation in the system is very high. The program is nationwide, the largest domestic governmental program, and requires mandatory contributions from covered employers and employees. The Court then determined the governmental interest could not accommodate the Amish belief.
Defendant equates Bethel with the Amish employer in Lee. By choosing to employ a school administrator, secretary, maintenance men, etc., Bethel "entered into commercial activity." Id. at 261, 102 S. Ct. at 1057, 71 L. Ed. 2d at 134 (brackets added). Since the religious objection to the social security tax is similar to the one raised in Lee, the claim here must be rejected.
Plaintiffs argue that Lee is inapposite. Bethel is not engaged in a commercial activity despite defendant's attempt to characterize it as doing so by narrowly focusing upon the jobs performed by the employee plaintiffs. Second, the Court's discussion in Lee of the government's overriding interest took place before the social security amendments at issue here imposed the tax upon church employees. The Supreme Court has never passed upon the validity of imposing the social security tax directly upon a church or its employees. Plaintiffs contend that they will build a record to show that here, unlike in Lee, the government's interest must yield to their own. Specifically, they will show that the social security program would not suffer financially if Bethel, or a church like it, was permitted out of the system but if it is required to continue in it, grave consequences would befall it. Plaintiffs also point to interference with the administration of the Church and the use of the Church as part of the machinery of a governmental social program. None of these factors were present in Lee.
Plaintiffs are correct in distinguishing Lee on the basis of its commercial setting. Certainly, the Supreme Court was concerned there about the effect of permitting a taxpayer to bring his religious beliefs into the marketplace. It concluded its opinion in Lee by stating:
When followers of a particular sect enter into commercial activity as a matter of choice, the limits they accept on their own conduct as a matter of conscience and faith are not to be superimposed on the statutory schemes which are binding on others in that activity. . . . The tax imposed on employers to support the social security system must be uniformly applicable to all, except as Congress provides explicitly otherwise.
Id. at 261, 102 S. Ct. at 1057, 71 L. Ed. 2d at 134-35 (footnote omitted).
Thus, we reject defendant's attempt to bring this case within the purview of Lee by focusing solely on the employees. Certainly, viewed in isolation, a secretary's duties would appear to be no different whether performed for a church or a business. Yet when performed for a church, they may be in furtherance of the church's goals and therefore serve a religious purpose. See Murdock v. Pennsylvania, 319 U.S. 105, 63 S. Ct. 870, 87 L. Ed. 1292 (1943) (the distribution of handbills may be for a commercial purpose but when done to promote religious belief, it is protected by the first amendment).
But we also reject plaintiffs' characterization of the claim in Lee as a bare attempt to escape taxes on a secular business by resort to a religious belief. That belief was just as sincerely held as in the instant case and qualitatively no different. It is immaterial that the claim was made by a lay person rather than a minister or a church. See Ballinger v. Commissioner, 728 F.2d 1287 (10th Cir. 1984).
Because of the similarity of religious claims, we believe that Lee does control this prong of Bethel's free exercise claim but for a reason only touched upon by defendant at oral argument. As noted by the defendant, the Court in Lee specifically held that the government had an overriding interest in maintaining mandatory participation by covered employers and employees. The Court then broadly stated its concerns in this area of the law, however, as follows:
The difficulty in attempting to accommodate religious beliefs in the area of taxation is that "we are a cosmopolitan nation made up of people of almost every conceivable religious preference." Braunfeld, supra, at 606. The Court has long recognized that balance must be struck between the values of the comprehensive social security system, which rests on a complex of actuarial factors, and the consequences of allowing religiously based exemptions. To maintain an organized society that guarantees religious freedom to a great variety of faiths requires that some religious practices yield to the common good. Religious beliefs can be accommodated, see e.g., Thomas, supra; Sherbert, supra, but there is a point at which accommodation would "radically restrict the operating latitude of the legislature." Braunfeld, supra, at 606.
Unlike the situation presented in Wisconsin v. Yoder, supra, it would be difficult to accommodate the comprehensive social security system with myriad exceptions flowing from a wide variety of religious beliefs. The obligation to pay the social security tax initially is not fundamentally different from the obligation to pay income taxes; the difference -- in theory at least -- is that the social security tax revenues are segregated for use only in furtherance of the statutory program. There is no principled way, however, for purposes of this case, to distinguish between general taxes and those imposed under the Social Security Act. If, for example, a religious adherent believes war is a sin, and if a certain percentage of the federal budget can be identified as devoted to war-related activities, such individuals would have a similarly valid claim to be exempt from paying that percentage of the income tax. The tax system could not function if denominations were allowed to challenge the tax system because tax payments were spent in a manner that violates their religious belief. See, e.g., Lull v. Commissioner, 602 F.2d 1166 (CA4 1979), cert. denied, 444 US 1014 [62 L. Ed. 2d 643, 100 S. Ct. 664] (1980); Autenrieth v. Cullen, 418 F.2d 586 (CA9 1969), cert. denied, 397 US 1036 [25 L. Ed. 2d 647, 90 S. Ct. 1353] (1970). Because the broad public interest in maintaining a sound tax system is of such a high order, religious belief in conflict with the payment of taxes affords no basis for resisting the tax.