Need More Money? Find A Way To Tax Religious Institutions
February 12, 2009
As time goes by, large religious entities (such as the Catholic Church) are being eyed as possible tax resources, just as they have become cash cows for lawyers. The new idea being suggested: when a diocese, for whatever reason, has to close a parish, the building is no longer being used as a religious site, and so should be taxed. Next thing you know, whenever a religious service is not being performed within a building, it will be taxable as well.
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Let’s not get into the bad habit of predicting a new Kulturkampf every time some municipal official suggests some minor change in the tax regulations.
No one is questioning here the fundamental exemption of the Church from taxation, but some economically hard pressed municipalities are letting their creativity get a little ahead of themselves.
I imagine part of the situation here is Catholics who were displeased with the closings of these parishes sticking it back to the diocese.
It is generally accepted that a church owned commercial enterprise is not exempt from taxation while organizations with a religious mission are exempt.
The remaining question is what about church owned property that is neither used for commercial or a religious mission, but not used at all? My call would be to let it remain tax exempt. Yet I understand that from the standpoint of the city, they need not be rabid anti-clericalists to see vacant property as an eyesore and magnet for crime and fire while the Church contributes nothing to pay for crime and fire prevention.
If the diocese has no further use for a piece of real estate, it might be best for them to sell it. If not, they might consider what other non-profits do and offer a PILOT (“payment-in-lieu-of-taxes”) to cover some of the costs incurred by the city. Another option is a museum of ecclesial art, cultural center or senior citizens center, which then produces street traffic to the neighborhood, benefiting small businesses and producing sales tax revenue. If the diocese is holding on to the property for speculation purposes, it is not surprising the city views this the same way as other real estate speculators.
Actually, there are quite a few theologians that welcome the taxation of the church as a step in actively dis-establishing the church from its current constantinian model. By being tax exempt the church is actually yoked to the state in a way no other body is. However, if it were taxed the church would be in a position of freedom, and able to do or say what would like without fear of having the tax-exempt status removed.
Douglas John Hall, one of my favorite theologians, holds this opinion. Read here: http://www.religion-online.org/showchapter.asp?title=415&C=228
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Other than creating endowments for certain necessary activities (education, building maintenance) and an appropriate rainy day fund, the Church should not be amassing significant wealth.
Of course we should have beautiful Churches and works of art, and of course proper care should be taken to maintain them. I’m not suggesting we “sell all the Churches.”
But, I’ve been quite shocked by the staggering cash reserves some dioceses have held, that are clearly above and beyond what is needed for good stewardship. The Vatican is a model for all Catholic Dioceses. It is essentially a break-even organization, funneling tremendous sums of wealth for charitable works every year.
I suggest taxing grace as income, but would it be a capital gain or just regular income?
Politicians have long looked to the Church as a source of revenue. Henry the VIII, anyone?
Jessie and Adam, not only have politicians “long looked to the Church as a source of revenue,” but the Church has often WILLINGLY contributed funds to military and political campaigns by rulers she favoured. To deprive her of the opportunity of doing so seems to me to be a very “Christ-like” act.
I live in the Archdiocese of Cologne, Germany, now–one of the richest in the world. There is really very little excuse for the staggering amount of wealth and real estate this diocese has collected; it is wealthier than the Vatican, which should be, as LCB suggests above, a better model for the managing of wealth.
Why not tax religious institutions?
Doesn’t redistributing money serve the common good?
If it’s good enough for religious people, why not for religious organizations?
Adam – I’m glad you made that point. I agree with it. We saw the effects of the tax exempt status, among other places, when churches were threatened for speaking out against the Iraq War.
Also glad to see Douglas John Hall mentioned on this blog. He’s not as well known in the u.s., but he’s been very influential in Canada. I need to get to know his work better. Thanks for the link.