One of their more egregious errors, in my view. And it's not just a technicality. The religious tax exemption goes against the spirit of the First. It gives government power over religions and requires that the state authorize certain religions as legitimate, and others as not. There's no Constitutional justification for limiting a religion's right to be involved in politics, but that's effectively what this rule does.
I think one reason so few people see it as a threat is because of the whole "perk" psychology. All tax incentives rely on this, and people mostly fall for them. They see them as harmless bonuses offered for doing "good" things. But, as Justice Roberts highlighted in the ACA decision re: the individual mandate, every tax incentive can also be viewed as a tax penalty (for those who don't comply with whatever the incentive is supposed to promote), and vice versa. Discriminatory taxation radically expands the power of Congress, beyond what the Constitution authorizes. It allows them to compel behavior in ways that we would instantly recognize as an abuse of power if they were formulated as straightforward laws. Robert's didn't have the courage to strike down the mandate on these grounds because it would have undermined every tax incentive on the books (there are thousands) and revoked a large chunk of the power that Congress wields. But it's power they should have never been allowed in the first place.
