Do the Amish Pay Taxes?
The Amish are one of the most insulated and secretive groups in the United States. Their choice to stand apart from modern American culture makes them a small wonder in the country, and there are a lot of unanswered questions about them.
One of these questions is: Do the Amish pay taxes?
The short answer to this is yes, the Amish pay taxes.
The long answer is more complicated.
While state and municipal law will always differ somewhat, this is a general list of the taxes that the Amish do and don't pay.
Taxes that the Amish pay include:
- Income taxes (federal & state)
- Property taxes
- Public school taxes
- Private school funding
- Sales taxes
Taxes that the Amish don't pay include:
- Social security (unless an Amish-owned business)
- Worker's Compensation (sometimes)
In this blog, we'll take a deeper look at these taxes and their relationship to the Amish.
We'll start with taxes that the Amish pay.
Taxes That the Amish Pay
When it comes to the taxes that the Amish pay, there are no surprises. Though the may be exempt from certain taxes, nothing can make them exempt from standard taxation that applies to non-Amish.
This is because the theory of taxation is based on your assets as a person — the property you own, the cash you earn, etc.
With that in mind, the Amish pay the exact taxes you would expect.
Income Taxes (Federal & State)
Federal and state income taxes are based on the amount of money you earn in a year. The method of earning can vary depending on what it is (a job, freelancing, capital gains, etc.), but it all has to be claimed on annual tax returns.
In this way, the Amish pay state and federal taxes just like everyone else. They earn an income through various means, the most common of which tend to be farming, construction, or some other form of manual labor.
Farming is important to note as well. In the places where Amish farms are common, the Amish are faced with another common tax.
Property tax is the amount of money you pay the government because you own a small part of the country.
For the Amish, this "small part" tends to be more than the average amount of land.
The Amish can own acres upon acres of land, whether it's purchased as a first-generation farm or inherited through the family.
The ownership of this land comes with property taxes, just like a standard residence. The nature of these property taxes can vary by state and municipality though, meaning that an Amish farm may pay far less in property tax because it produces food, as opposed to being used explicitly for residential purposes.
In some locations (like Lancaster), property taxes may be synonymous with another common form of taxation.
Public school taxes.
Public School Taxes
Again, depending on the state in which an Amish family resides, the school taxes they pay may vary wildly.
However, if a state doesn't run its public schools off of property tax, then they often have a separate tax set up for that purpose.
In that event, the Amish are still required to pay these school taxes, even though their children don't attend conventional public schooling.
So if Amish children don't attend public schooling, where do they go?
Technically, they attend private school.
Private School Funding
Amish schools are one-room schoolhouses that educate students to the level of eighth grade.
These schoolhouses tend to be small with only a few Amish families sending children to each one. One of these families (or one nearby) also includes someone who steps up to become a teacher.
The school is typically located on or close to property that is owned by one of the families. It's common to see an Amish schoolhouse in rural Lancaster that is just off the side of the road, very close to farmland.
This is because many municipalities have laws about how close to the road a farm may plant crops, in the name of safe driving. Because this long strip of land would go unused, it's the perfect location for a schoolhouse.
From the property to construction to the teacher's payment (if applicable), all of this comes down to the Amish families who send children to a school.
So while funding a private school isn't a tax, it's very similar.
Finally, there's another tax that the Amish pay that doesn't quite fit the mold of what we've discussed already.
Sales tax is the amount of money that the government takes whenever money changes hands.
There's no two ways about this one. Regardless of whether someone is Amish or "English" (the Amish word for non-Amish), there's a tax to be paid whenever something is purchased.
Still, there are some taxes that the Amish truly don't pay.
Taxes That the Amish Don't Pay
In general, the taxes that the Amish are exempt from paying aren't incredibly surprising. In fact, some countries and states allow you to opt out of taxes similar to these on the condition that you can never benefit from the program.
In the United States however, these are the two forms of taxes that the Amish don't pay.
We'll start with social security.
Social Security (unless an Amish-Owned Business)
Social security is the name for financial government benefits that start paying to you when you reach the age of 67.
Based on the idea that everyone should be able to retire someday, social security is a mainstay of many older Americans' lives.
However, the Amish don't use social security, and they're allowed not to pay into it.
This is because Amish culture is highly concerned with caring for a family's progenitors. As the Amish age in their family, they receive care as they would from a family at any other point in their lives.
At times, there may be Amish who are sent to assisted living facilities to receive care for extreme needs.
But if someone is in good health, it's typical to see an Amish individual enjoying his or her golden years in the company of the many generations of their family.
Worker's Compensation (Sometimes)
Worker's compensation is another government benefit program that helps you financially if you're ever injured on the job and unable to work.
The Amish don't pay into worker's compensation — if they're allowed to opt out of it — because they don't believe in insurance.
Instead of standard health insurance, Amish communities pool their medical funding together. Then, when someone needs to pay for medical expenses, they use the community pool.
Essentially, this is a small, community-based form of socialized healthcare.
It's also why the Amish don't have to pay for worker's compensation. They won't ever use it because their medical needs are already funded.
With all of this said, let's answer one final question that ties into our questions so far.
Why do people think the Amish don't pay taxes?
Why Do People Think the Amish Don't Pay Taxes?
The Amish are hardcore believers in separating their lives from the modern world. This practice is typically summed up in the feeling that they are called "to be in the world, but not of the world."
They don't drive cars, use electricity (although this practice is changing), or engage in many modern activities.
As a result, it's a short logical leap to imagine that they don't pay taxes either.
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