TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Saturday, September 15, 2012

Europe Considers Taxing Catholic Church to Raise Revenue

Catholic ChurchWashington Post, Financially Troubled Parts of Europe Consider Taxing Church Properties:

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. ...

Once an untouchable institution in some parts of Europe, the Catholic Church has come under fire for its government subsidies at a time when the continent’s economies are faltering and the population is subject to painful cuts in jobs, benefits and pensions.

Political groups have seized on the crisis as an opportunity to open up a larger debate about whether it is time to unwind some of the deals struck generations ago between church and state in predominantly Catholic countries in Europe. ...

The issue of church tax payments has been simmering for several years. In 2010, European Union regulators launched an investigation into the Catholic Church and the taxes it pays in various countries. The E.U.’s competition czar, Joaquin Almunia, has said the tax breaks could be considered state aid and illegally distort competition in the market. But the issue wasn’t at the forefront of the debate until earlier this year when Monti, the Italian prime minister, called for assessing taxes on church properties.

(Hat Tip: Bob Kamman.)

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Wake me up when "Financially Troubled Parts of Europe" Consider Taxing Mosque Properties.

Posted by: BuddyPC | Sep 16, 2012 5:15:29 AM

I have enough room on my farm for the Vatican Museum. When's moving day?

Posted by: teapartydoc | Sep 16, 2012 5:58:40 AM

"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. ..."

I suspect they can just confiscate the Catholic Church and their "financial crisis" will see only a short-term dip. That financial crisis is the unstainable model of socialism.

Posted by: Willis | Sep 16, 2012 7:35:35 AM

It's a little more than tradition, because much of those concessions are based on quite old (but very valid) contracts which have to be bought out (and that is not always possible, you cannot hand entire towns' property lien's back to the church coffers) before privileges can be stopped.

It's been considered many times before and always been left alone after 'consideration'.

Posted by: Hexe Froschbein | Sep 16, 2012 7:41:10 AM

Liberals who are always whining about taxing churches are missing a several salient points.

First, when you donate money to a church, you are not buying a product or service for profit, you are giving a gift to them of money you already earned, which has already been taxed. We generally tax revenue in this country and not gifts. Yes, some people take a charitable deduction, but you typically don't receive a dollar-per-dollar benefit when you use a Schedule A.

Second, entities we do tax are taxed on net revenues after expenses. I don't see how you are going to get much revenue given the fact that most non-profits spend what they take in every year.

Finally, if we start taxing churches, we are going to start having to tax charities, schools and other similar institutions that also receive tax exempt status. Does anybody really think that's going to result in anything positive?

Posted by: Danny K. | Sep 16, 2012 9:09:38 AM

Eventually, socialist governments are going to run out of people and things to tax. But, they can always print more money -- just like we're doing again.

Posted by: Woody | Sep 16, 2012 10:46:56 AM


As soon as they look carefully at the books they'll realize how much idiocy this is.

It's idiotic for the reasons articulated by other commenters, but I think a lot of folk are overlooking the biggest reason, which is that there isn't any money to be had from it, relative to the financial need.

These fools think that because XYZ Cathedral sits on valuable city real estate and has gilt on the altar, and because the Vatican's library of ancient documents is irreplaceable and valued at the tens of millions for insurance purposes, the Catholic Church is "wealthy" in a liquid, easily-taxable way.

Sure, it's wealthy, compared to a Kentucky foot-washin' clapboard church with 32 attendees.

Sure, it's wealthy, compared to an individual; even a Fortune 500 CEO doesn't imagine having that many priceless paintings in his own collection.

But compared to a government? Well, the Vatican has about as much money to throw around as the government of New Jersey. And it uses that to tend to the well being of about 20% of the souls on Planet Earth. (Think the Obama Administration could ever do much with so little?)

And all of the Catholic Church's most splendid forms of wealth are either not fungible, not liquid, or consist of funds taken up one week at the parish level and used that week for that parish, or taken up one year at the diocesan level and used over the course of the same year by the diocese.

Sure, you could make the parishes of Europe pay property taxes. Of course, the only reason those particular parishes continue to operate in their ancient buildings is because the tax break makes it affordable to do so. Take that away and the parish will sell, because they've no other way to pay the tax. A Saudi prince will be only too pleased to buy the property at auction and build a Wahabbi mosque on the same spot. That's one way to tax the Church.

Another way is to confiscate all those paintings frescoes and statues and put them up on private auction; they'll wind up in the private collections of the wealthy and the one-time windfall will be sufficient to solve about one seventy-fifth of the European financial crisis.

So: You rip up the historical, artistic, and cultural patrimony of Europe and get a one-week reprieve on the financial difficulties. And then...then what?

You see, the math on this is not difficult because the math has been done before. It's been done every time some idiot says, "Oh, the Catholic Church has gold chalices and patens on the altar, and a gold tabernacle behind it; they must be richety-rich! How evil they are; don't they know that if they sold all that they could feed the poor?"

So then those who know the score are forced to patiently review with said accusers the relevant details. And when the kinds of wealth held by the Catholic Church are finally considered, one realizes that, yes, if all the Church's property were liquidated and sold to businessmen, one could feed the poor of the world for about 1.2 days.

After that, the poor of the world would be forced to go to church in a new building: A warehouse, say, or a vacant store in a strip mall. (I suppose the high and mighty of the world would regard that to be a more appropriate place for poor people to worship.)

And the same is true if you tax it all away. The wealthy bureaucrats who levied the tax would have a small windfall sufficient to delay the inevitable and long-overdue layoffs of those same bureaucrats. The poor Spanish grandmothers fingering Rosaries in their mantillas, after the one place of beauty and peace they knew in their lives was confiscated to make way for a shopping mall, would be as poor as they ever were financially, but without the weekly reprieve into a place of beauty they once knew.

Perhaps they'll pray their Rosaries in the new shopping mall.

A brilliant plan, indeed.

Posted by: R.C. | Sep 16, 2012 12:17:26 PM

Perhaps the Catholic Church should run Europe.
Probably would be an improvement.

Posted by: Flavius Minimus | Sep 16, 2012 2:01:08 PM

Let's see if Benedict is ready to revive the use of interdict to keep the church free from state taxing power.

Posted by: Rhymes With Right | Sep 16, 2012 2:14:57 PM

Buddy PC posted my immediate reaction. I would love to see Mr. Almunia publicly explain why taxation of Islam (that would be both mosques and madrassas, since their political agendas are obvious) is not an insult to the prophet ... as European cities burn.

Posted by: MochaLite | Sep 16, 2012 2:49:05 PM

Fine, as long as they tax all the other religions as well. ALL Christians, Jews, Moslems, Hindus, Baha'i, and so forth.

And yes, I think it would result in something positive -IF everyone describing themselves as 'religious' were taxed. I'm just paranoid enough to believe that is never going to happen.

Charities and schools that can describe themselves as doing good to the needy will be fine. Even churches that could do so should be fine. But, I, for one, am sick and tired of seeing 'tithes' going to building a bigger and more impressive building instead of helping. US Churches need a major kick-in-the-butt.

And if you think all "charities" are charitable, I will happily put you on my household's charity-scam-call list.(Many of whom call after legal hours - enjoy.)

Posted by: Kathy | Sep 16, 2012 5:36:29 PM

Taxing political parties and unions would be a better target.


Posted by: J.M. Heinrichs | Sep 16, 2012 7:31:44 PM

What about taxing the unused trust funds of large private colleges (Harvard, Yale, etc.)? What about taxing large private foundations (Ford, Pew, etc.)that sit on huge piles of cash? Can we end the shady income forecasting accounting of Hollywood and reimpose the Eisenhower excise taxes on films and music?

Do not tax me, tax the other guy behind the tree!

Posted by: DLN | Sep 17, 2012 10:59:39 AM

"Once an untouchable institution in some parts of Europe, the Catholic Church has come under fire for its government subsidies at a time when the continent’s economies are faltering and the population is subject to painful cuts in jobs, benefits and pensions."

How idiotic. On the one hand they subsidize them, and with the other they want to tax them. How about reducing the deficit by ending the subsidies, and then just leave them alone.

Posted by: richard40 | Sep 17, 2012 4:51:08 PM