Wednesday, July 27

I dont see the sense of exempting religions from taxes

This idea that religions or even charities should be exempt from taxes is not very clear in my mind. Tax exemptions are basically subsidies. In which somebody foregoes benefits and/or pays more in tax so that the recipient of these subsidies can presumably do something that the government thinks would not be possible without.

So when we give tax exemptions to temples or charities or churches, we are basically saying that their work is beneficial to society. But if that is indeed the case, how do we judge that benefit? Transparently? there is great difficulty in doing so but I tend to disagree, take these benefits away. They benefit from all the other bits that the taxes bring like security, water, electricity, etc.

See this story from Greece. I quote:

The Greek Orthodox Church owns more land than anyone except the state, employs thousands on the public payroll, has a stake in the nation's biggest bank, but campaigners say its tax payments are derisory.

The Greek Orthodox Church has long enjoyed a privileged, some would say cosy, status when it comes to taxes in a country where it is responsible for the sole official religion, with one critic calling its complex finances at best opaque.

But the sovereign debt crisis that has rocked the Greek state, thrown hundreds of thousands of people out of work, and forced painful cuts in salaries, pensions and benefits, has raised fresh questions about the Church's tax position.

More than 100,000 people have joined a Greek Facebook page "Tax The Church", and 29,000 have so far signed an online petition urging the state to harness "the huge fortune of churches" to reduce Greece's crushing budget deficit.

More importantly:

The government is now under intense pressure from the IMF and the EU to sell off public assets, including real estate.

Part of the problem is no one knows how much property the Church has. Greece has no central land registry and the Church's decentralised structure means it does not know what it owns.

"The Greek Church is paying almost nothing in taxes to the Greek state for the total assets that it controls", one senior tax expert, who declined to be named, told Reuters.

From the smallest village in northern Greece, where farmers pay rent to the Church, to the smart suburbs of Athens, where the Church owns prime real estate in the seafront millionaires' neighbourhood of Vouliagmeni, the land holdings are enormous.

Ridiculous.

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