Idealism and Italian taxes

Plans to end property tax exemptions for the Catholic Church are one of the top stories in the Italian press this morning. On 15 Feb 2012 Italian Prime Minister Mario Monti released a statement saying he will introduce legislation requiring the Catholic Church to pay taxes on all its commercial properties.

Reporting on church – state issues is hard enough for American newspapers, covering overseas disputes is near impossible for most. The amount of information needed to bring a reader up to speed before he can appreciate the issues often serves to prevent a story from every being written.

The only English-language story I’ve seen on this breaking news item comes from Bloomberg BusinessWeek. It does a fair job of summarizing the facts, but is unable to give the story any context. Which will likely mean that this story will be given a pass by U.S. editors. That would be a shame.

Some GetReligion comments have argued that the effort in reporting overseas religion stories is not worth expending. They follow the Neville Chamberlain line.  Speaking of the need to appease Hitler in the face of his demands for the Sudetenland the prime minister told the House of Commons:

How horrible, fantastic, incredible it is that we should be digging trenches and trying on gas masks here because of a quarrel in a far-away country between people of whom we know nothing.

No trenches here, but how much time should the U.S. press devote to a religion story from a far-away country and about a conflict of which we know nothing?

But lets put a stopper in the philosophical bottle and turn to the story … The key points from Bloomberg are:

The church currently pays property tax only on buildings designated as “purely commercial,” based on an Italian law originating 20 years ago and extended in 2006. The wording is ambiguous when it comes to clinics that have a chapel or monasteries that offer bed and breakfast accommodation.

The Catholic Church owns about 100,000 properties in Italy, a third of which are commercial, according to the Italian Radical Party, which historically has challenged the church.

Bloomberg offered this background detail explaining the prime minister’s announcement.

Following a complaint by the Radical Party, European Union regulators opened a probe in 2010 into Italian tax breaks on real estate granted to the Catholic Church, saying they may distort competition.

The outcome of the investigation will be made public by next month and if the decision goes against Italy, the EU could order the country to pay a fine and to demand that the church reimburse the government for unpaid taxes of the last five years, the secretary of the Radical Party, Mario Staderini, said in an interview in Rome on Dec. 21.

Does this tell the full story? Reading the Bloomberg report by itself one would miss some key issues and perhaps draw some false conclusions. The Radical Party’s request for EU intervention arose from its belief that the state’s policy of not taxing church property was anti-competitive. It gave the church an unfair advantage by reducing its costs and allowing it to undercut its commercial competitors — or serves as a form of state subsidy to the church.

The Italian press agrees the church should pay property taxes on commercial real estate — which is somewhat extraordinary. The great fun of the Italian press is that it offers a Rorschach test of the Italian psyche. All of the newspapers are working from the same inkblot, but they see different things emerging from the darkness.

The moderate middle is pleased the Catholic Church is paying its fair share. It also hopes this announcement will silence the perpetually aggrieved anti-Catholic left. A front page article entitled “Ici, svolta sui benne della Chiesa” in La Stampa, (the Turin-based newspaper has the largest circulation in Italy and is center-right in its politics) stated the Church:

is responding cautiously in courtly style .. while the antiecclesiastica (anti-clericalists) are satisfied even though the measure will not be complete as many had hoped.

However La Stampa notes that some of the criticisms and claims from the left are simplistic as there is no one entity known as the church that owns property.

Arriving at a revenue figure from church owned properties is a very complex task. The properties are owned by a galaxy of legal entities different, ranging from dioceses to congregations, religious orders to the Italian property of the Vatican itself.

Writing about this controversy in January before the prime minister’s announcement, the Guardian took a different line, likening the tax exemption to tax avoidance. What do you think of this opening?

It has long been regarded as more of a national sport than a misdemeanour. And it has long benefited from the seemingly boundless indulgence of the Italian Roman Catholic church.

But now the head of the Italian bishops’ conference, Cardinal Angelo Bagnasco, has unambiguously declared that “evading taxes is a sin”. He called for “serious, effective and relentless” action against tax dodgers.

The cardinal’s remarks are a boost to the technocratic government of Mario Monti, which is running a high-profile drive to root out evasion as it struggles to eliminate Italy‘s budget deficit and start paying back the country’s €1.9tn (£1.6tn) public debt.

Among those often accused of avoidance, if not evasion, is the church itself. Its premises are exempt from property tax.

This is comically bad and plays into national stereotypes. Those eye-ties are all crooks at heart, the Guardian tells us.

Avvenire, the newspaper owned by the Italian Catholic Bishops Conference (CEI), notes that many newspapers seem to have missed the point that this new law applies to all non-profits — not just the Catholic Church.

… it should be remembered for the umpteenth time, this category [tax exempt institutions] is not identical with the Catholic Church, it includes properties of faiths who have registered with the the state and extends to all non-profit entities. Without this necessary clarification (that often the media tends to “forget” as happened yesterday), they will want to read the full official statement …

With regard to exemption from local property reserved for all non-commercial entities the Prime Minister and Minister of Economy and Finance, Mario Monti, told the European Commission Vice President, Joaquin Almunia, that it intends to present to Parliament an amendment to further clarify and define the question.

Avvenire argued the “real news” from the prime minister’s announcement was that the government was going to introduce a:

mechanism tied to strict guidelines established by the Minister of Economy and Finance to the identify the proportional relationship between commercial and noncommercial activities performed within the same building.

The official line was offered by Msgr. Domenico Pompili.

We look for the exact wording of the text so that they can express a detailed opinion. … As has been stated several times, and most recently by the President of the CEI, Cardinal Angelo Bagnasco, any intervention aimed to introduce clarifications to the existing formulas will be received with the utmost care and responsibility.

One must also look to the reason for the exemptions, Msgr. Pomili said, adding we “hope the state takes into account the social value of the vast world of nonprofits.

So where is the problem? The Bloomberg story is correct, but the Catholic newspaper would say that it missed the point that not-for-profits in Italy are not the same thing as the Catholic Church — and that they are willing to pay their fair share. The Catholic argument that the church provides social services — and that was one of the reasons the tax exempt law was introduced twenty years ago — is also missing.

But these surface issues don’t speak to the question of the relationship between church and state. The European Union is intervening in Italy (at the request of one Italian political party) to re-order the relationship between the state and the Catholic Church. EU values and EU law trumps Italian values and Italian law.

What does this intervention mean for established churches — like the Church of England, the Church of Greece, the Church of Sweden et al? What does this mean for the individual believer when transnational entities have supremacy over the political aspects of his life in issues ranging from abortion, euthanasia, gay marriage, or immigration. How far can the EU go to press its agenda on individual states?

And then there is the question of idealism in reporting. Should newspapers concern themselves with the happenings of people very far away debating issues of which we know nothing? Is knowledge of the wider world a form of Orientalism — as defined by Edward Said — where we safe at home can view the doings of the other with detached amusement? Or are there universal themes or norms played out in the world which are relevant to us — even if they take place in the back of the beyond? Or, as the Guardian might put it, what more could we expect from Italians and Catholics?

What say you GetReligion readers?

Basilica of St. Peter photo courtesy of Shutterstock.

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  • Martha

    “The wording is ambiguous when it comes to clinics that have a chapel or monasteries that offer bed and breakfast accommodation.”

    That’s interesting – a lot of monasteries and convents support themselves with businesses producing everything from coffee to soap – would they be considered “commercial properties”?

  • Jerry

    I disagree with those who believe that you should ignore what is going on overseas. For one thing, having the EU as a semi-national government intervene in taxation in Italy puts the situation in Greece into a bit more perspective especially considering there were calls for the EU to basically take over the Greek government as far as finances were concerned. So this issue is part of framework of the EU.

    I don’t know enough to comment on the substance of the controversy, but I really appreciate your summary and overview. I found it helpful for me to understand the Italian situation.

  • Jerry

    For what it’s worth, the NY Times is now reporting the story http://www.nytimes.com/2012/02/17/world/europe/italy-sets-tax-on-church-property.html

  • http://n/a Mary De Voe

    For the government to turn around and deny the will of the donor for the non-profit to have his gift, donation or bequest is taxation without representation. No government or government entity constituted through the sovereignty of the person may countermand the will of the person to exercise freedom according to the will of God in the practice of virtue, especially the practice of the virtue of charity, for the God WHO created man cares for man through the love of mankind in the practice of the virtues, especially the practice of the virtue of charity.
    The will of the people must be respected to the last sovereign person. The European Union subsumed all sovereignty of Italy. In the matter of taxation of any and all property held by the Catholic Church, the church properties, all 100,000, are held in joint and common tenancy by each and every person, Catholic and non Catholic, AND ALL FUTURE GENERATIONS, in the same way that all public places are held by each and every citizen in joint and common tenancy.. and all future generations. Informed consent exercised through the free will of the sovereign person and people to patronize Catholic Communities for the intended purpose of supporting the communities for the future generations to come must be acknowledge by the state, in this case, Italy and the EU. For if the free will of a single individual is prohibited and disenfranchised, or impinged upon by taxation after the citizen has paid his fair share of taxes, and the citizen is not allowed to contribute to the charity of his choosing, unencumbered, totalitarianism will ensue. Charity is defined as a virtue of God and generosity, too, is a virtue of God. The atheistic EU ought to, in JUSTICE recuse itself from this case because of its denial of the existence of God and Jesus Christ’s church, for in declaring itself atheist, the EU has prejudiced itself and has a vested interest in promoting atheism. Burdening the Catholic Church with more taxes will further the atheistic agenda. In the final analysis, the property of the church is the property of Divine Providence for Divine Providence, the property of God, Italy’s tithe. Man’s freedom comes from God.
    Atheists need a church to come home to, when they change their mind.
    The Enemy has raised this issue now, to distract from the fact that the totalitarianism of Obamacare is being challenged according to the founding principles inscribed in our Declaration of Independence and Constitution.

  • http://n/a Mary De Voe

    Generosity of spirit and charity of soul will return growth and prosperity to the globe. Competition will strangle growth and prosperity unless it is imbued with fraternal love. Competition to be the most generous, the most charitable is the only acceptable competition in the family of man.

  • http://n/a Mary De Voe

    “Plans to end property TAX EXEMPTIONS (emphasis mine) for the Catholic Church”…presupposes that the state has the authentic authority to tax the Catholic Church, which the state does not. “Render unto Caesar that which is Caesar’s, and unto God that which is God’s. The Catholic Church is Italy’s tithe to God in appreciation for Divine Providence.

  • http://n/a Mary De Voe

    A tax exemption can be made IF THE STATE HAD THE AUTHENTIC AUTHORITY TO TAX HOLY GROUND, but the state does not have authentic authority to tax the freedom and sovereignty of Holy Ground. In this case brought to the European Union, there is no tax exemption with which to go into court. The state cannot tax the sovereignty of God and God’s Holy Catholic Church, therefore, an exemption from the taxes that do not exist, does not exist.

  • http://n/a Mary De Voe

    The atheist ought to be forced to pay two taxes for his exercise of good will.
    Isn’t it irrational, counter-productive and retrograde for the human being who comes into existence at the will of God, our Creator, who constitutes the state from the very first moment of his existence, being endowed by God with sovereign personhood, who comes into citizenship at the will of the state, who pays tithes to the Catholic Church and taxes to the state, to be depreciated to a digit on the tax bill, to be disenfranchised, forced to pay two tithes, one to the Catholic Church and one to the state, or two taxes, one for the Church and one for himself, to carry two burdens and be allowed only one vote? …undue burden on religious liberty, restraint on the exercise of free will? Why can’t the atheist be taxed twice, once for coming into existence at the will of God, our Creator, and once for being a citizen? Since the state has no authentic authority over the Catholic Church, or over the virtue of charity, or over the citizen’s exercise of good will, the idea of, and a law addressing a tax exemption which does not exist for the Catholic Church is non-existent.
    Who is preventing the atheist from donating more tax money to cure the state’s deficit? The money used for this unlawful law suit ought to be donated to reduce the deficit. The atheist’s altruism has a couple of tattered holes in it. The atheist ought to be forced to pay two taxes for his exercise of good will. Oh, but that is religious discrimination.