Separation of church and state is good for both, as well as the third group consisting of the state and church's citizenry. People obviously benefit from the separation because the religious majority, having the power to vote its members into the state, cannot then influence a religious minority's religious freedom. Likewise, the taxes of a person in the religious minority certainly shouldn't be paid from the state into a religious majority's pot so that discrimation can occur against the religious minority. Such a system forces the religious minority to fund discrimination against itself. It is interesting to note that the religious majority doesn't necessarily pay any direct price as a result of church/state integration however, and that is exactly why it is so popular with many people. The state benefits because there is no inherant benefit of mixing church into state in the first place. State is a political matter. Religious beliefs have little relevance to political matters except as a method of influencing policy and such policy is almost always prejudiced against the religious minority. If prejudice could be guaranteed to be avoided, perhaps such a system would work, but it is practically inconceivable. The church also benefits from separation because as long as there isn't a connection, the state can't tell the religion how to run itself, especially when it comes to financial matters. As soon as the state is funneling money into religion, the state has a stake in religion, just like and individual investing stock in a company, and like any shareholder, the state will want to influence how the religion is using that money.
Not completed yet
I would really like to hear what people think of this. Feedback is not only welcome, but desired and appreciated. Keith Wiley, kwiley@cs.unm.edu