Following up on an item we covered in December, a law clarifying the Catholic Church’s responsibility for property taxes is making its way through the Italian Parliament. Although media reports describe the law as controversial, it actually breaks little new ground, Time Magazine reports. Since 2005, the Church has had to pay tax on property it uses for commercial purposes; the Church does not object to that. Property used for non-commercial (religious and non-profit) purposes remains exempt; no one, except perhaps the Radical Party, seems to object to that. The only controversy is what to do with mixed-use property: property that is used for religious and commercial purposes, like a convent that contains a chapel as well as a few rooms for tourists. Under the new law, only those parts of mixed-use property that are used for commercial purposes would be subject to tax. Religious entities would be required to account for which parts of their property are in fact used for commercial purposes. The law’s opponents argue that this arrangement is susceptible to abuse; in a country where tax enforcement is so lax, they argue, no one is likely to check the accounting.
That’s the headline of an AP story over the weekend, here. Italian law has traditionally granted a tax exemption on real property owned by non-profits, including the Catholic Church. The exemption extends not only to property used for religious reasons, but more broadly to any property that is not “exclusively commercial” in nature — for example, guest houses for pilgrims and medical clinics. Critics argue that the exemption allows the Church (and other non-profits, presumably) to conduct commercial activities without paying tax. Given Italy’s fiscal crisis, the new government is signaling that it will reconsider the breadth of the exemption, and the Church is signaling that it may go along:
One of Monti’s Cabinet ministers, Andrea Riccardi, is one of the most prominent lay Catholics in Italy, the founder of the Sant’Egidio Community with close ties to the Vatican.
He said this week that the church should pay the property tax if commercial activity is being carried out on the property. “I think that all the all the religious and cultural activities of the church are a richness for the country and the tax shouldn’t be paid,” he told RAI state television.
But if individual cases are discovered where commercial activity is being carried out, “necessary measures should be taken.”
Sociologist Grace Davie has famously described churches in Europe as “public utilities,” state-supported institutions that people assume will be there for them when the occasion demands — weddings and funerals, for example. She contrasts this with the American idea of churches as “firms,” that is, private associations that members support through voluntary contributions. From La Stampa this week, a fascinating piece addressing attempts by the Catholic Church in Europe to move to the American model, so far without success. State budgetary shortfalls and church scandals have made public funding much less certain, and the Church is encouraging European Catholics to see themselves as “stewards” who must support their local parishes financially. The long tradition of state funding makes Europeans reluctant to accept this new responsibility, however.
I cannot quite decide whether this report is in jest or not, but it appears to be real. But if it is real, I am having a difficult time understanding the aims of the tax. Why is it necessary to improve and expand the Christmas tree market? What secular government purpose is at stake, other than improving the lot of people who sell Christmas trees? And if that’s all that is at stake, why did the government choose Christmas tree sellers as opposed to a different group; say, clothes retailers or winter sled manufacturers? At least on one currently popular understanding of the Establishment Clause, why is collecting revenue for the explicit purpose of promoting the image and marketability of a “sectarian symbol” like this not problematic? — MOD
UPDATE: Thanks to my alert colleague, Mark, I see that the US Department of Agriculture has decided to delay imposition of the tax. The Administration spokesman does not want to call it a tax, but prefers to call it a “fee” which the “industry group [is] deciding to impose . . . on itself.” If that is the case, then why is the US Department of Agriculture involved in imposing the fee? On the other hand, it appears from at least some accounts that none of the money is going to the federal government itself.