There will be appeals of this ruling, which will prove that the clergy are no more willing to see a tax increase on themselves as any other profession. Anti-clericals were be delighted with this unsurprising news. The tax code is riddled through and through with special favors, dispensations, exemptions, credits and deductions for all sorts of groups. But ministers are supposed to be above all that.
A tax advantage for one profession is indefensible, except that "everybody does it."
So let's leave moralizing aside and look at this for what it will do.
The "voluntary association" religious organization is dying out. By "voluntary association" religious organization, I mean a religious organization that is created and sustained primarily by the voluntary contributions of less than a thousand ordinary people. Out of their gathered contributions, the organization has a building and a professional leader, some staff and some programs. Churches and other religious congregations are the prevalent form of voluntary organization in the country, a long-standing fixture.
They are becoming unsustainable in their present form, in almost every aspect. They ran on volunteer labor, but the role of women as necessary workers in most families has dried up that source. Paying staff to do what volunteers used to do is expensive, and underpaying them is unjust. Rising real estate costs have made the building more difficult to sustain, and new buildings often prohibitive in growing areas. The rising cost of higher education has saddled the ministers with large debts, which must be repaid with current salaries.
But the overall cause for the decline of religious institutions: stagnant incomes for all but the wealthiest is making churches and congregations unsustainable. Imposing an additional tax burden on ministers will only make it worse. Either ministers lose income which cannot be made up by the congregation, or congregations are further squeezed.
It's a class issue. For decades, there has been a conflict over the wealth created by this economy. The wealthy have managed to accumulate most of it, and as a result, popular grass root institutions that depend on grass roots financing are withering away.
Yes, there are some churches and congregations doing well. If they have wealthy members, or well-paid professional members they will do well. If they have endowments from previous generations, they can survive. If they can accumulate enough spare capital from wealthy members to market themselves effectively, they can become large enough to succeed, but how many small churches die to make a mega-church thrive? (Remember the total proportion of church goers is dropping, so rapidly growing churches are growing at others' expense.)
One can argue that capitalism's "creative destruction" has come to the religio-industrial complex. This is no different, one could argue, than the destruction of the mom-and-pop stores by the supermarkets. Within the capitalist ideology, whatever happens is probably for the best. (And they say religious people are utopian!)
But within a worldview that says what is for the best will be made by self-directed human beings working in voluntary associations, economic conditions that threaten grass-roots institutions are not "creative destruction" but just "destructive destruction."(read your James Luther Adams, clergy!)
This ruling will bring new attention to the finances of the grass-roots church of all denominations. But let's see it for what it is: part of the destruction of autonomous and self-directed voluntary organizations for the poor, the working class and the middle classes. It's coming close to the clergy, now. We, in the clergy, might want to blame the IRS for this downturn in our personal economies, but the larger picture is growing class divide, and the impoverishment of the majority.