European Countries Consider Taxing Churches

Given the flagrant role that some churches are playing in politics here in America: think the Roman Catholic Church and a number of far right denominations, I would argue that it is time that tax payers stop indirectly underwriting these political operations and revoke the tax exempt status of politically active churches, starting with the Roman Catholic Church. As the Washington Post is reporting, some countries in Europe see this as both good policy to increase tax revenues and a recognition that churches that are playing politics should be treated no differently that any other group.  Here are some story highlights:

Cash-strapped officials in Europe are looking for a way to ease their financial burden by upending centuries of tradition and seeking to tap one of the last untouched sources of wealth: the Catholic Church. Thousands of public officials who have seen the financial crisis hit their budgets are chipping away at the various tax breaks and privileges the church has enjoyed for centuries.

Rubio, a city council member in Alcala, is leading an effort to impose a tax on all church property used for non-religious purposes. The financial impact on the Catholic Church could be devastating. As one of the largest landowners in Spain — with holdings that include schools, homes, parks, sports fields and restaurants — the church could owe up to 3 billion euros in taxes each year.

Similar efforts that target church coffers or powers are underway in neighboring countries. In Italy, Prime Minister Mario Monti has called for a tax on church properties or on those portions of properties that have a commercial purpose. In Ireland, the minister of education is fighting to end church control of many of the country’s primary schools, and the government has slashed in half the grants it gives poor families for first Communions. More than half the city councils in Britain have eliminated state subsidies for transportation to faith-based schools, leading to a precipitous drop in enrollment.

In response to the controversy, the Vatican and representatives of the church — Cardinal Antonio Maria Rouco in Spain and Cardinal Angelo Bagnasco in Italy, who head the council of bishops in their respective countries — have released statements saying they intend to comply with all laws. But they have declined to comment further except to emphasize that current norms recognize the “social value” of church activities.

The net worth of the Vatican and the Catholic Church dioceses is difficult to estimate, but it is thought to be astronomical, according to Zech. The Vatican’s treasure of gold alone is thought to be worth several billion dollars. The church’s nearly 3,000 dioceses serve individual countries, regions or cities that defer to the Vatican in matters of doctrine but maintain their own finances.

With most of its assets tied up in buildings and artwork, the church has faced a cash-flow problem in recent years. Contributions have fallen dramatically in the wake of the global economic downturn. The clergy abuse scandal cost the church hundreds of millions in settlement costs, further eroding cash reserves.

 The article is lengthy but raises issues that ought to be discussed in the USA - especially as the Catholic Church and other churches flagrantly violate IRS laws that bar political activities.