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.
But the church is facing its own money troubles. Offerings from parishioners have nosedived, and it has been accused of using shady bank accounts and hiding suspect transactions.
Now, along come officials like Ricardo Rubio.
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.
Spain isn’t the only country to drool over the untapped wealth of the church. Efforts are underway to grab resources from other European countries. The WaPo continues:
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.
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 would this work? I can see all the little old ladies siding with the churches. What about families? How religious is most of Europe?
I would think that all churches would have to be taxed the same way if this plan survives. If I were a church, I would start issuing Hell cards or something. I didn’t realize that not taxing churches was more tradition than anything else. Would our country ever consider taxing churches or at least church holdings that weren’t an actual church?
Why do we exempt churches? Would you be comfortable taxing churches? Would it be easier to do if Europe paved the way? is there any way churches could fight having to pay? Is there any part of the Constitution that exempts a church from paying taxes?
Nice
The power to tax is the power to destroy.
The founders did not think that an income tax was Constitutional and so did not conceive that our gov’t would get so powerful.
Personally, I think that the gov’t should lose ALL power to tax churches. As it stands now, they can lose their tax exemption if they “engage in politics.” I say, let them. All of them, from the Westboro’s to the biggest Buddhist temples. More free speech is a good thing.
So..they want to take the wealth of the church. I guess that when the church in Spain stops running those schools and hospitals, etc, Spain will have to take over.
No one would vote to tax the churches? why? why not?
Are they getting rich person protecton from the republicans?
What are you talking about? Rich person protection? Churches are tax exempt.
The Europeans are going to tax the churches. I bet on it. If the “non-church” related activities, as determined by a gov’t, get taxed too much, then the churches can’t afford to run those things.
The Constitution does not provide the exemption; it does have the Government can collect taxes. All the exemption is based on laws for the Internal Revenue Code. And the word “chuch” is not found anywhere in the Code since that term is not used by all faiths or inclusive of integrated auxiliaries within religious groups. Also, there are “religious organizations” that are not “churches” and generally are the interdemomination and ecumenical organizations (to include Colleges/Universities). I’ll just use “churches” here since it is simpler to type and less wordy but can capture the intent 🙂
Churches that meet the Code definition are automatic exemption and most don’t fill out the paperwork to be declared 501(c)(3) although some do for tax benefits since, when it comes down to State and Local level, not all Churches are equal for that level of taxes. Most of the larger Churches in the USA (Catholic, Methodist, etc etc) use a group exemption to simply tax issues.
Now, religious organizations like Knights of Columbus must file for tax exemption since they are not specifically organized for a religious purpose – they are considered like any fraternal organization.
A church also is not required to withold taxes (Income & FICA) to their pastor (whatever title the church uses) unless the pastor asks them too. However, the pastor is responsible for Self-Employment Tax unless the pastor applies to IRS to be exempt from those. All other employees/contractors are subject to witholdings.
RE Taxes on property are another story. A property with exclusive use as church or as religious education facility is considered tax exempt – although the local government CAN put an appraisal value on the property. The touchy point is when a church says, for example, their Thrift Shop or Day Care building is for “religious” purposes. The Day Care maybe if only only only open to the congregation, but if open to the public, it is then a profit generator and taxable.
That’s for the USA churches – Europe is another story. They don’t have the same broad strokes we have when it comes to nonprofit rules. And as you point out, it is more tradition. But even in the USA, local governments are looking around when there is several million dollars in exempt RE. As the article notes, that value is the real issue.
But “wealth” of a church can be subjective. Let me use the Vatican as an example – all the art there has a hard dollar value, but the arguement against selling is the Vatican is the “custodian” of the art. Deduct that out, and the Vatican is one broke little country.
@Ray Beverage
Thanks. That was very informative.
Thanks Ray.