Berkley Center

It is no secret that Italy has a lot of churches. What one might not realize, however, is the special relationship that the Catholic Church has with the Italian government, and how this relationship has come under scrutiny in the recent months of economic downturn. As Italy’s economy attempts to recover, its leaders must both reexamine many of the benefits that the Church receives and also try not to ruin one of the best things the country has going for it.

Since the reign of Mussolini, the Catholic Church has received special treatment from the Italian government through treaties that have been made with the Holy See. For a long time, Italian clergy were given a salary called a congrua that was paid for with taxpayer money. This is still in practice today, though it is no longer a direct salary for the clergymen.

Today, the practice is called the otto per mille, or the “eight per thousand” tax. This tax allows Italians to choose whether to donate 0.8 percent of their annual income tax to the Italian state or to one of the six religious sects that are recognized by the government. These groups include the Catholic Church and various Jewish communities, but they exclude religions such as Islam and Buddhism. While the tax can be paid to the organization of a taxpayer’s choice, the payment itself is compulsory; so if someone does not indicate a preference, the 0.8 percent is spread out amongst all of the organizations.

For some Italians, allocating their 0.8 percent can be like choosing between the lesser of two evils. Especially under the leadership of Silvio Berlusconi, many Italians believed that the government wasn’t properly representing their interests and therefore opted not to give their money to the state. This meant that by default, they had to give to one of the only six religious sects recognized by the government. Not surprisingly, the Catholic Church receives the vast majority of these donations.

Italian Catholic schools also get an advantage on the tax code, since parents who choose to send their children to private Catholic schools receive a tax break. This special relationship further illustrates the favorable position of the Church in Italian society.

In recent times, however, the economic hardships of the Italian state have caused many to reevaluate the special privileges that the Church has been granted. Previously, the Church had received a tax-exempt status not only for their religious practices, but also for Church-owned business, which include bed and breakfasts, hotels, and movie theaters.

The new prime minister, Mario Monti, is pushing to remove the Church’s tax-exempt status in order to increase revenue; such a measure is estimated to bring in between $650 million to $2.6 billion annually. For the most part, Italians support the policies that Monte has proposed. In December, 130,000 Italians signed an online petition calling on the government to revoke the Church’s privileged status.

Critics of the exemption argue that the Church is receiving an unfair advantage over privately owned business that have to pay the necessary taxes and compete with firms owned by the Church. Italians believe that it is finally time for the Church to pay its fair share and aid in the economic recovery of Italy. The Church, however, plans to protest these measures and argue that these programs will prevent them from implementing programs that help the needy and the poor. The Church wants to be treated as a not-for-profit organization, even in its ventures that generate profits.

I’ve tried to explain the complicated nature of the relationship between the Church and the Italian state in order to frame the difficult questions currently facing the country. Italians like to think that Catholicism is the “First Religion” of Italy. The Church receives many benefits from the state that other religions do not receive.

The Italian people, however, seem to be siding with reason in an effort to tax Church businesses that quite frankly should be taxed. One Italian I spoke with said that these measures are 70 years overdue.

As an outsider and an American, it is hard for me to understand the relationship that the Church shares with the Italian state. However, I will still add this one point of personal commentary. I was in Paris just last week and visited Notre Dame, a cathedral that in my opinion did not seem like a sacred place; instead, it felt like a tourist trap. Only the massive crucifix reminded me of the fact that I was standing in an 850-year-old church.

But the Italians have figured it out. The churches in Italy are the most spectacular in the world. They are able to beautifully express the sacredness of Italy’s medieval and Renaissance history, while also accommodating for the thousands of tourists who visit them each year. Florentine churches like Santa Croce and Santa Maria Novella evoke spiritual affections in their visitors, whether they are religious or not. The economist in me clearly sees the need to tax Catholic organizations that are not directly associated with religious practices; in fact, I fully support the measure. However, I have reservations about the dangers of commercialization that may accompany taxation of the Church. I therefore believe that Italians should rethink the measure, because the country’s churches are truly some of its finest attractions.