Churches have always had the kind of influence they do now. They have affiliated themselves with political parties for as long as political parties have existed. Separation of church and state has always been a struggle.

What IS different is that churches used to fully fund and operate many hospitals, homeless shelters, orphanages, etc. In small communities, they were often the only place to turn in times of hardship. Sure, they should get tax exemption for those things. They shouldn't get tax breaks for proselytizing, indoctrinating and overseas conversion "missions."