Last week the Italian government released its latest data on the distribution of annual income tax proceeds, covering the year 2012. The results show that the Catholic Church netted a little over $1.3 billion from what’s known as the otto per mille (“eight per thousand”) system.
Under Italian law, 0.8 percent of everyone’s income tax is devoted either to support of one of the organized religions recognized by the state or to a government-run social assistance program. In a country where distrust of government is pervasive, roughly 80 percent of taxpayers who express a preference each year choose a religion, and the lion’s share goes to the Catholic Church.
Moreover, the law says that for those taxpayers who fail to designate a choice, their 0.8 percent will be allocated on the basis of the shares created by those who did, meaning that the Church gets the bulk of that money too. That’s hugely significant, given that in 2012 almost 55 percent of taxpayers didn’t express an option.
The total yearly haul for the Church for some time now has been north of $1 billion. It’s often erroneously reported that the money goes to “the Vatican,” but that’s not the case – it goes to the Italian bishops. They put out a breakdown each year of where it goes, with the largest line items being clergy salaries and pastoral operations.
Italy is not the only country to have some version of a “church tax.” Denmark, Finland, Iceland, Sweden, Austria and Germany all have such a national system, and some cantons in Switzerland also have a local version.
In Germany, the Kirchensteuer is especially consequential, each year bringing in a staggering sum in excess of $6 billion for the Catholic Church. That money allows the German bishops, despite flagging vocations and Mass attendance, to fund a sprawling range of ministries and programs. In fact, the Catholic Church is the country’s largest private employer.
Each year when countries that have a church tax release their data, a fresh round of grumbling and complaint always follows.
Many secularists don’t like the whole idea of public funding going to support religion. Even those who don’t object in principle nevertheless often argue that in practice the system is undemocratic, since, to take Italy as an example, more than half of all taxpayers didn’t actually choose to give their share to the Church, but it ended up there anyway.
On the Catholic side, there’s long been an undercurrent of doubt in some quarters about the wisdom of dependence on states that have become increasingly secular, and whose agendas aren’t always in sync with the Church’s.
Other Catholic critics believe it’s unhealthy for a local church to be artificially propped up by tax revenue, because it reduces the incentives for pastoral hustle and – in language that is, admittedly, more commercial than spiritual – “customer service.”
Politically, Catholics who don’t appreciate what they see as the liberal drift of German Catholicism also tend to gnash their teeth at the fact its bishops seem to be swimming in more money than faithful.
For Americans, this is one church/state battle we don’t have to worry about fighting, since there’s no equivalent of the church tax in the States. (Granted, estimates are that various Catholic entities in the US receive roughly a half-billion each year in public funding for programs ranging from school lunches to contracts to care for the poor, but that’s another kettle of fish.)
There is, however, an American angle on the church tax worth a footnote.
The income may not flow directly to the Vatican, but it has an indirect impact because it allows bishops in countries that impose the tax to boost the amount they can offer each year to support Vatican operations.
Canon 1271 of the Code of Canon Law obligates bishops to provide funds to support the Holy See, just as parishes support their diocese: “By reason of their bond of unity and charity, and according to the resources of their dioceses, bishops are to join together to produce those means which the Apostolic See may from time to time need to exercise properly its service of the universal Church.”
In terms of its annual budget, the Vatican gets its money each year from three principal sources: investments and financial activity; earnings from real estate holdings; and contributions from dioceses, as well as other groups and individuals. Each year, the biggest contributors in the third category are generally the Americans and the Germans.
Here’s the difference: To a large extent, the largesse flowing in from Germany is the result of compulsory tax collections. The money that comes in from the States, on the other hand, reflects what millions of rank-and-file Catholics across the country freely choose to plunk into the collection plate.
(The situation is slightly more complex, because if American bishops had to try to fund all those charities without relying on government support, they’d probably have significantly less to send to the Vatican. Still, the point is that the American church does not get a share of anyone’s income tax.)
When the Vatican ponders its income, accountants and overseers naturally evaluate it in strictly financial terms – what’s the dollar value of German contributions, American, etc.?
On the premise, however, that voluntary contributions are more impressive than compulsory ones, it may be a small boost to American Catholic pride to know that from the point of view of what we might call “moral accounting,” American dollars that end up in the Vatican arguably are worth more.