Taxation and religious organisations

Amhran Nua

It may seem incongruous to some in these recessionary times that among the largest and most wealthy organisations in the country are paying no or very little in the way of taxes. These of course are the religious groups, including the Catholic church. As far as I'm aware, the Catholic church in Ireland neither has to pay tax on its non-charitable profits and nor does it have to report its charitable or non-charitable activities to the government. The legislative background is in the constitution:

5° Every religious denomination shall have the right to manage its own affairs, own, acquire and administer property, movable and immovable, and maintain institutions for religious or charitable purposes.

And in the charities act, revised last year:

3.—(1) For the purposes of this Act each of the following shall,
subject to subsection (2), be a charitable purpose:
(a) the prevention or relief of poverty or economic hardship;
(b) the advancement of education;
(c) the advancement of religion;
(d) any other purpose that is of benefit to the community.
(2) A purpose shall not be a charitable purpose unless it is of
public benefit.

...

(4) It shall be presumed, unless the contrary is proved, that a gift
for the advancement of religion is of public benefit.

The possibility has been raised in some quarters of a generational "inheritance tax" on property owned by the church, in that its members are making gainful use of large amounts of property over the course of many generations, and so should pay a sum every thirty years or so in lieu of inheritance tax, to prevent the accumulation of wealth in institutional hands. This could then be offset by taxes paid of any sort over that thirty year period.

Without weighing in on one side of the issue or the other, would it be desireable or doable to apply taxes to religious organisations? Just throwing the question out there...

markphillips

I think there should be some level of taxation for religious organisations. Maybe my view of religion is tainted, being a non-believer, but I think if everyone has to chip in, why not religions? I mean, the Catholic Church has a massive amount of property and wealth built up here. There are also other growing churches here, like Scientology and the evangelical churches, that place a lot of emphasis on taking in money but pay nothing on it.

Also, interesting that the law you mention seems to say the "advancement of religion" is of "public benefit". I'm pretty sure alot of people would have a different view on that!

dan_d

This may be true, but bear in mind that a lot of these religious orders - particularly the Catholic - have falling numbers. Their clergy are severely reduced in numbers with very little by way of fresh blood coming in. In many cases they can barely make enough money to keep property in order, such as churches/schools. I don't think taxing them on property would achieve anything at all, other than bankrupting them further. And given that in several cases they actually run schools our kids are in, and the churches that we all (well, a lot of people) use, we'd only end up hurting ourselves by it, really. Plus they've already had to sell a lot of what they own, and no doubt more will come. I don't think it would be worth it.

CorkFenian

dan_d wrote: »

This may be true, but bear in mind that a lot of these religious orders - particularly the Catholic - have falling numbers. Their clergy are severely reduced in numbers with very little by way of fresh blood coming in. In many cases they can barely make enough money to keep property in order, such as churches/schools. I don't think taxing them on property would achieve anything at all, other than bankrupting them further. And given that in several cases they actually run schools our kids are in, and the churches that we all (well, a lot of people) use, we'd only end up hurting ourselves by it, really. Plus they've already had to sell a lot of what they own, and no doubt more will come. I don't think it would be worth it.

Good post, in my opinion though they are so far away from "barely make enough money to keep property in order" its not funny...They are absolutely loaded and it annoys me that they can continously tap the older pensioners for refurbishment schemes of churches etc, people who can't afford it.When they have so much wealth, in lieu of lands, and buildings in this country...

deise blue

The current Government are terrified of upsetting OAP's and you expect them to tax God !

Zamboni

These concessions are based on the assumption that it is the will of the people.
It's the Irish populations fault on this one.
Grow a set and stop ticking the Catholic box in the census.

Here is a hint, if you have had pre marital sex and don't believe in zombies, the chances are you are not a Catholic. Or at least a very good one.

Amhran Nua

It might be worth noting that countries like Germany have the state collect revenue for the church directly from income taxes, around 25 million Germans pay between 8% and 9% of their income to the church, so the organisation has no shortage of funding.

The ramifications of an institutional inheritance tax are interesting - it wouldn't affect corporations that have been here for more than 30 years, since their taxes already paid would cover their assets. However, the church in this case would need to pay some 10% to 20% or so of the value of their properties in Ireland, which would be in the tens of billions, easily.

What would happen then? Refusal to pay and have the properties forfeited to the state? Could Ireland become the first state to be excommunicated wholesale? Would we see the mass closure of churches and the sacraments being delivered by mendicant priests, and would that be such a bad thing? It goes beyond a simple question of taxation I think.

5live

Correct me if im wrong on this but didnt we contribute over 1 billion to the churchs funds when we agreed to cover their liabilities on sex abuse compensation over E128 million? And they still havent passed on all the agreed properties to the state? Good luck taxing them as at least 2 of the senior ministers of our glorious government are of the catholic fundamentalist persuasion and will stop or stymie any attempt to take money from rome:(

dan_d

No, what I'm really trying to say is (and this is probably in awful taste)...you'd be flogging a dead horse. There's no point coming into this argument and saying tax them all, every last penny, they're all ba%*&ds, didn't they abuse us for years and religion is the dumbest thing ever. Objectively, they're a dying breed. And the population feeding into them is growing smaller and smaller by the year. So what you'd have is our parents and grandparents funding this tax. You might get something out of it for a couple of cycles of the tax period, and then after that it would be kind of dead in the water. Parents would be appealed to in schools, on top of what they already pay. Hence the shooting ourselves in the foot thing.

I just think that for the amount of effort involved, there'd be very little gain.

Amhran Nua

dan_d wrote: »

No, what I'm really trying to say is (and this is probably in awful taste)...you'd be flogging a dead horse. There's no point coming into this argument and saying tax them all, every last penny, they're all ba%*&ds, didn't they abuse us for years and religion is the dumbest thing ever. Objectively, they're a dying breed. And the population feeding into them is growing smaller and smaller by the year. So what you'd have is our parents and grandparents funding this tax. You might get something out of it for a couple of cycles of the tax period, and then after that it would be kind of dead in the water. Parents would be appealed to in schools, on top of what they already pay. Hence the shooting ourselves in the foot thing.

Well first of all I'd say we need to move away from religious organisations in schools entirely, so assume that as a given. Likewise we'd be moving away from the current government so we can assume that won't be a barrier either.

The fact of the matter is the church makes tens of billions annually from countries like Germany alone, to say nothing of massive investment portfolios and other sources of income, that they can afford to pay such a tax is not in question. And while the church may be dying out, I have every faith in their ability to hold on to their assets ad infinitum. In an increasingly secular country, is that really equitable?

I just think that for the amount of effort involved, there'd be very little gain.

Tens of billions is quite a handy bit of gain.

Zamboni

dan_d wrote: »

No, what I'm really trying to say is (and this is probably in awful taste)...you'd be flogging a dead horse. There's no point coming into this argument and saying tax them all, every last penny, they're all ba%*&ds, didn't they abuse us for years and religion is the dumbest thing ever. Objectively, they're a dying breed. And the population feeding into them is growing smaller and smaller by the year.

There has certainly been a decline in the last couple of decades but you have to remember that religion tends to do very well during bad times.
The point is that they should be treated like the commercial organisations that they are, irrelevant of the size of their client base.

rumour

Amhran Nua wrote: »

Well first of all I'd say we need to move away from religious organisations in schools entirely, so assume that as a given. Likewise we'd be moving away from the current government so we can assume that won't be a barrier either.

The fact of the matter is the church makes tens of billions annually from countries like Germany alone, to say nothing of massive investment portfolios and other sources of income, that they can afford to pay such a tax is not in question. And while the church may be dying out, I have every faith in their ability to hold on to their assets ad infinitum. In an increasingly secular country, is that really equitable?


Tens of billions is quite a handy bit of gain.

The catholic church may not be flavor of the month and this would probably sell as an idea. However and I think I agree with dan_d here. The minute you set about doing this it all becomes value less.(a bit like diesel jeeps after the green tax) So your perception of the billions available is nothing more than that unless there is a viable church/congregation contributing. On the other hand you can re-appropriate the property, have a church, have a cathedral but Ireland at the minute is full of empty buildings why do you want more? And I think there are some fundamental questions to be answered if even part of the idea sets out to re-appropriate property.

I think this one won't really work in solving an economic problem, on the other hand if your a secularist you could manipulate the economic agenda to suit the secular agenda. I mean its not far off saying hey secularists have loads of money lets tax them, when it becomes flavor of the month.

Then there is this enormous issue of church (religion) and state. Its a complex problem in nearly every country throughout history. If you want to target one belief system I think it ultimately causes problems. But thats just my opinion.

Amhran Nua

rumour wrote: »

The minute you set about doing this it all becomes value less.

I really don't think so - I am aware of the rumours of similar organisations moving their properties into trusts due to the court cases over sexual depredation by their members, but thats easy to sort out with a habitual use clause, rounded off with a net tax paid clause to prevent some misguided individual taxing them with one hand and giving it back as an agricultural grant with the other.

rumour wrote: »

So your perception of the billions available is nothing more than that unless there is a viable church/congregation contributing.

Again, I'm a bit confused. The Catholic church is a multinational organisation, and there are very large, very wealthy countries like Germany where the church tithe is taken off you with your taxes. 25 million Germans pay it, although technically thats probably only half in taxpayers, which should still add up to the high tens of billions every single year from one country alone. Pleading poverty or organisational segregation in such an environment is an exercise in futility, I'm afraid.

rumour wrote: »

On the other hand you can re-appropriate the property, have a church, have a cathedral but Ireland at the minute is full of empty buildings why do you want more?

Most of those empty buildings are outside of major city centres and urban areas, unlike Church holdings. And you might be surprised how little of the Church holdings contain any actual churches.

rumour wrote: »

I think this one won't really work in solving an economic problem, on the other hand if your a secularist you could manipulate the economic agenda to suit the secular agenda. I mean its not far off saying hey secularists have loads of money lets tax them, when it becomes flavor of the month.

Ah but you misunderstand - this isn't a "Church tax". It's a tax on any group making gainful use of large amounts of property over the course of generations, which includes corporations and crown holdings in Ireland.

It is not an equitable situation that these major assets should be held by institutions over the course of generations without some compensation to the public. If they have been paying taxes, well and good, they have already made that contribution. If they have not, well its clear that some contribution must be made. Marginal tax is higher for similar reasons.

rumour wrote: »

Then there is this enormous issue of church (religion) and state. Its a complex problem in nearly every country throughout history.

On the contrary, its quite simple. They should have nothing to do with one another.

rumour

Amhran Nua wrote: »

I really don't think so - I am aware of the rumours of similar organisations moving their properties into trusts due to the court cases over sexual depredation by their members, but thats easy to sort out with a habitual use clause, rounded off with a net tax paid clause to prevent some misguided individual taxing them with one hand and giving it back as an agricultural grant with the other..

I don't think I'm following your primary intent. Therefore excuse me if I appear to drift somewhat. If the idea is to tax legal entities who have 'x' amount of property and do not pay any form of inheritance tax over a generation this appears reasonable enough. However as a long term strategic plan this would have consequences. Ultimately the only piece of property worth developing with a lifespan over a generation would be those owned by the 'state' as everyone else is subject to a property inheritance tax at some notional 'generational' interim. Should Intel and Dell now be forced to cough up? Similarly Lansdowne Rd (opps Aviva) and Croke Park and every other golf club etc across the land. All can be accused of sitting on lucrative property in pretty sought after areas. This is true of the Catholic Church but lets just suppose for now they are a no more than another 'legal entity'. The consequence then becomes everything else is transitory other than the institutions of the state, the incentive to invest in property is stripped. Again to this point so far so good if we believe the state is capable of this level of property management. If you assume the state is benovolent and will always do the tight thing this is fine. However this is based on a belief system, to me this is just replacing catholic faith (or any other religious faith) with some sort of faith in the state. That is a valid choice but I am wary of faith in the state currently.

Amhran Nua wrote: »

Again, I'm a bit confused. The Catholic church is a multinational organisation, and there are very large, very wealthy countries like Germany where the church tithe is taken off you with your taxes. 25 million Germans pay it, although technically thats probably only half in taxpayers, which should still add up to the high tens of billions every single year from one country alone. Pleading poverty or organisational segregation in such an environment is an exercise in futility, I'm afraid...

Is this is a re introduction of the old tithe tax? If they do this in germany fine. Are you suggesting we tax people according to their beliefs? I think you'll find this most unpopular and difficult to administer. Granted the CC when I was young were issuing envelopes to households and expecting 'donations' every week. To that extent this was a cash cow and should have been taxed, essentially its income. But these days how much cash do you really think they pull in every week. I'm guessing (no more than that) that what they get is largely from OAP's who somewhat perversley want the state to provide everything for free. Again in the longer term perhaps less than a generation this will have died out, so no income. But the precedent will have been set and the source of income once established will create legitimacy. Who next becomes the question?

Amhran Nua wrote: »

Most of those empty buildings are outside of major city centres and urban areas, unlike Church holdings. And you might be surprised how little of the Church holdings contain any actual churches....

I agree with this and think I have under estimated the extent of church holdings. However we are in the realms of the intent to re-appropriate property from an identifiable target with rather no more substantive justification than who cares about them. Whilst I may be of that mentality currently, responsibly we must question what we define as property. Do we ultimately believe in state communes? Controlled by whom, who of course will live in council houses.

Amhran Nua wrote: »

Ah but you misunderstand - this isn't a "Church tax". It's a tax on any group making gainful use of large amounts of property over the course of generations, which includes corporations and crown holdings in Ireland.

I think I've wandered into the implications of this above.

Amhran Nua wrote: »

It is not an equitable situation that these major assets should be held by institutions over the course of generations without some compensation to the public. If they have been paying taxes, well and good, they have already made that contribution. If they have not, well its clear that some contribution must be made. Marginal tax is higher for similar reasons.

Equity must be examined in a reasoned and rational manner, while I don't disagree with you on many points there are enormous implications to this proposal. Should the EU equitably be entitled to impose an inheritance tax on the state of Ireland in a generation. Regardless of their economic circumstances?

Amhran Nua wrote: »

On the contrary, its quite simple. They should have nothing to do with one another.

A minor point, I have found the word 'should' to be among the most useless words in the english language( I know I use it myself). Your opinion here is a fundamentalist statement in essence and for every 'should' you proffer they will be hundreds if not thousands of others. That does not mean your ideologly does not have merits.

Amhran Nua

rumour wrote: »

Should Intel and Dell now be forced to cough up? Similarly Lansdowne Rd (opps Aviva) and Croke Park and every other golf club etc across the land.

If you look again at the original proposal, it says that such a tax should be offset by other taxes paid in ther intervening thirty years. Intel would have been paying corporation tax and the employer's contribution at a minimum.

rumour wrote: »

Is this is a re introduction of the old tithe tax?

Eh? Where did that idea come from, the German tithe was used as an example of the relative ability of the church to pay Irish taxes. Nobody wants a tithe tax introduced here.

rumour wrote: »

However we are in the realms of the intent to re-appropriate property from an identifiable target with rather no more substantive justification than who cares about them.

Not at all, if these organisations want to just pay the tax, they can hold on to their property and welcome to it. I don't think that social justice is an insubstantial justification. I do agree the implications of such a tax would be far reaching, but I don't see much wrong with the implementation of it. Social issues like the church vacating Ireland wholesale in protest at such a tax might be a concern. On the other hand, if the church values gross mammon over the spiritual well being of its adherents in Ireland, perhaps we'd be better off without it.

rumour wrote: »

Should the EU equitably be entitled to impose an inheritance tax on the state of Ireland in a generation. Regardless of their economic circumstances?

The EU isn't responsible for the state of Ireland or its citizens. The state of Ireland is an organisation whose purpose is to look after the welfare of the citizens of Ireland.

rumour wrote: »

Your opinion here is a fundamentalist statement in essence and for every 'should' you proffer they will be hundreds if not thousands of others.

It may be a fundamental statement, as in fundamental to most modern western democracies, but I wouldn't describe it as fundamentalist.

Ghost Estate

ah, great to see the anti-religious crowd are at it again.

rumour

Amhran Nua wrote: »

The EU isn't responsible for the state of Ireland or its citizens. The state of Ireland is an organisation whose purpose is to look after the welfare of the citizens of Ireland..

But as can be seen by all manner of current events Ireland has an obligation to the EU, just as you are implying these 'charitable' organisations have an obligation to the state. perhaps equity is not the argument to pin this on.

One of the maxims of equity:

One who seeks equity must do equity

http://en.wikipedia.org/wiki/Maxims_of_equity

Manach

I'd disagree with just about all of Amhran Nua's suggestions. The Church has contributed greatly to the welfare of less well off in Irish society over the generations, as I've experience of this. Historically the confiscation of religious lands (for example Henry-8ths dissolution of the monarchy's has a significantly adverse effect on the economy (source Duffy, Stripping of the Altars))
As well (this is a supposition on my part), to single out one organisation for this type of tax raid at a future stage could easily be then expanded to include other organisations such as multinationals' properties.

Amhran Nua

rumour wrote: »

But as can be seen by all manner of current events Ireland has an obligation to the EU, just as you are implying these 'charitable' organisations have an obligation to the state. perhaps equity is not the argument to pin this on.

So, what you're saying here is that the organisation, the European Union, has a territorial claim on the Republic of Ireland? Because the Republic of Ireland most certainly has a territorial claim on organisational holdings within its borders. Attempting to conflate economic debt with national boundaries shows a worrying lack of understanding of either concept.

Manach wrote: »

The Church has contributed greatly to the welfare of less well off in Irish society over the generations, as I've experience of this.

The Church has benefited enormously from Ireland as well, although we could go down the road of balances of benefit, the question at hand is quite clear.

If you die, and you have wealth, whether artwork, a property, or money, your heir or heirs will probably need to pay an inheritance tax on it, depending on the amount. This is intended to prevent the accumulation of wealth in too few hands, which is also why we have the marginal tax rate (which also works according to relative value but how and ever). This is one of the reasons why we aren't a developing country.

And yet here we have vast amounts of land, wealth, artwork and other capital sinks passing from generation to generation within a few organisations, with no checks to prevent the same accumulation of wealth, which goes against the spirit of our society, laws, and culture, not to mention being a complete waste of resources.

The issue is long overdue to be addressed to be honest.

Manach wrote: »

Historically the confiscation of religious lands (for example Henry-8ths dissolution of the monarchy's has a significantly adverse effect on the economy (source Duffy, Stripping of the Altars))

Of course, that Henry was a spendthrift buffoon had nothing to do with his country's economic woes... Also the integration of the church with modern economies is considerably less than it was back then; it wouldn't be an exaggeration to say "non existent".

Manach wrote: »

As well (this is a supposition on my part), to single out one organisation for this type of tax raid at a future stage could easily be then expanded to include other organisations such as multinationals' properties.

No need to suppose, just read the thread, already covered.

faceman

Amhran Nua wrote: »

It may seem incongruous to some in these recessionary times that among the largest and most wealthy organisations in the country are paying no or very little in the way of taxes. These of course are the religious groups, including the Catholic church.

Have you seen financial data for the Catholic church in Ireland that supports this claim?

Amhran Nua

faceman wrote: »

Have you seen financial data for the Catholic church in Ireland that supports this claim?

Have a read of the OP - advancement of religion serves as a charitable purpose, and charitable organisations are tax exempt. I am not aware of any reporting of assets either, which is why the church was asked to do so in 2009.

Have you evidence to the contrary?

Rabble Rabble

Two problems. The wealth of the Catholic Church isn't handed down to recipients permanently, the priests have no title on Church property and cant sell it. So there can be no inheritance tax.

Secondly any cost here would be deferred to the Catholic community - who are the descendants of the people who built the churches and school buildings in the first place, often doing what the State was reluctant to do - i.e. educate the lower orders, or any Catholic during the penal laws. In effect the State is saying - we didn't build the schools initially and we are going to tax you for owning them now.

In fact , if there is to be a secular schooling system ( and if so lets not model the UK's failed comprehensive system) - the State will owe the Catholic Church for the buildings.

EDIT: That said income should be taxed at 12,5 %

Amhran Nua

Rabble Rabble wrote: »

The wealth of the Catholic Church isn't handed down to recipients permanently, the priests have no title on Church property and cant sell it. So there can be no inheritance tax.

Correct. It would be a Persistent Institutional Assets tax.

Rabble Rabble wrote: »

Secondly any cost here would be deferred to the Catholic community

The Catholic church has no ability to levy taxes in modern Ireland. They can try to defer the costs to the community, but it would be entirely up to the community as to whether or not they wanted to pay. Which is as it should be, no?

Rabble Rabble wrote: »

we didn't build the schools initially and we are going to tax you for owning them now.

And all the church got in return was the ability to influence every new Irish generation. I'd like to know as well, what percentage of Irish schools have their deeds owned by religious organisations, if any. The ones outside of portacabins, naturally.

Rabble Rabble wrote: »

the State will owe the Catholic Church for the buildings.

Sounds like something that would be covered by the PIA tax to be honest. Its a nice bit of joined-up thinking all round.

faceman

Amhran Nua wrote: »

Have a read of the OP - advancement of religion serves as a charitable purpose, and charitable organisations are tax exempt. I am not aware of any reporting of assets either, which is why the church was asked to do so in 2009.

Have you evidence to the contrary?

I dont need evidence to the contrary. The church does a large amount of community work and aid work abroad. I dont see the benefit of taxation

Amhran Nua

faceman wrote: »

I dont need evidence to the contrary. The church does a large amount of community work and aid work abroad.

The Irish state contributed €696 million in foreign aid in 2009, and did so without needing to send missionaries to further its influence in developing countries with desperate living conditions. Perhaps the church would be well advised to follow suit? Of course a simpler solution would be just to institute the PIA tax and call it even.

faceman wrote: »

I dont see the benefit of taxation

Surely reducing the accumulation of wealth in institutional hands as well as contributing its fair share is a benefit to society as a whole, and is more in keeping with the humane and socially aware way our society is run economically, though.

Zamboni

faceman wrote: »

I dont need evidence to the contrary. The church does a large amount of community work and aid work abroad. I dont see the benefit of taxation

Plenty of commercial organsations engage in philanthropy and charitable works in communities and abroad and pay taxes.
Why should the church not be treated the same?